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9.A. - Page 3 of 14 Weaknesses Challenges • Redwood City currently lacks diversity in the types of tech businesses located in its office and industrial parks. New technologies such as biomedical, biotechnology, fin tech and clean tech present opportunities to the diversity of tech businesses in Redwood City.' • The General Fund relies heavily on sales tax revenue from limited sources that are not growing. • Redwood City's location near three large regional malls (Stanford, Hillsdale and Valley Fair) affects its competitiveness for the location of higher profile brand retailers. • There is a lack of hotels serving the Downtown and Redwood City. • Redwood City's demographic and economic indicators are changing but still less robust than other Peninsula cities. • Downtown Redwood City lacks vacant, affordable space for retail stores. • Redwood City is "built out" which limits new residential, commercial and industrial development. • The auto industry is changing with respect to the types of vehicles produced (electric and other alternative fuels and factory automation) and the way they are serviced and sold. • Sales/use tax revenues for the City's General Fund continue to decline as a result of the ways goods are sold and changes in shopper preferences. • Retail brick and mortar stores continue to close leaving large vacant stores that are difficult to re -tenant. • Continual shifts in business operations at the national and global level result in economic and market fluctuations at the national and local level. • The cost of doing business and the high cost of living in the Bay Area forces business to expand or relocate outside of the Bay Area. Business operating costs are not sustainable for many local businesses. • The high cost of housing and living is increasingly unaffordable for residents and workers. • Funding for infrastructure (housing, transportation, utilities) and capital improvements and services to support continued job growth cannot meet demand. • There is continued pressure to rezone industrially zoned land and buildings for higher value residential and office space development. • The cost of living affects the ability of businesses to fill service and entry-level jobs. • Redwood City continues to lose family entertainment venues due to the high cost of land, rent and labor. ' Fin tech is new technology and innovation that aims to compete with traditional financial methods in the delivery of financial services. Clean tech is a general term used to describe products, processes or services that reduce waste and require as few non-renewable resources as possible. City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org 376