20240604 DRAFT Chapter 6 - Economic Development CLEANChapter 6: Economic Development
Chapter 6. Economic Development
6.1 Introduction
The purpose of the Economic Development Element is to outline the City's goals and policies for
types, intensity, and location of employment, commercial services for residents, and industrial
businesses. This chapter also outlines goals for balancing environmental protection and economic
growth, creating connections with the business community, and improving the overall economic state
of Port Orchard. In addition, this chapter will briefly discuss employment goals in Port Orchard and
the potential benefits of the City as an employment center.
Economic Development Vision
Plan for a vital, sustainable economy
with a diversity of jobs and businesses
that create a healthy local employment
and economic base, supported by an
appropriate range of land uses.
The economic vision for the future of
Port Orchard as a whole can be
summarized by the following guiding
principles:
• Unify the business community.
• Establish investment priorities.
• Plan for a vital sustainable economy.
• Work in concert with current plans and
processes.
• Promote, attract, and maintain
a diversity of jobs and businesses to create a
dynamic, diverse, and vigorous employment
and economic base.
• Honor and value Port Orchard's unique maritime past.
• Create opportunities for small businesses, women -owned businesses, and minority -owned
businesses to locate in the City.
• Continue to identify and support centers within the City where job growth opportunities and
infrastructure investments can be prioritized.
• Maintain a balanced mix of residential and commercial land uses and adjust the future land use map
as economic conditions change over time.
This Element provides goals and policies to guide development, identify key goals and opportunities,
and designate appropriately zoned land for development of primary employment. The
Comprehensive Plan promotes economic development by designating a diverse mix and appropriate
range of commercial, office, and residential land uses that, in turn, will provide opportunities for
businesses to locate within close proximity to residents and create living wage jobs that contribute
to a healthy local economy.
Local economic policy also plays a strong role in balancing the needs of growth and protection of our
environment. Areas designated for economic development must have easy access to necessary public
facilities such as utilities and highways yet have a limited impact on environmentally sensitive areas
such as the Puget Sound, streams, and wetlands.
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Chapter 6: Economic Development
6.2 Economic Conditions
6.2.1 Geographic Setting
Port Orchard is well located. It is only a 10-minute ferry ride or 20-minute drive from the county's
largest city, Bremerton, and the Naval Base Kitsap. From Bremerton, a one -hour ferry provides a
connection to downtown Seattle, the economic and cultural center of the Pacific Northwest.
Additional passenger -only ferry services (fast ferries) are available from both Bremerton and
Southworth, with each providing an approximate 30-minute travel time to downtown Seattle. Among
cities in Kitsap County, Port Orchard is the closest to international export terminals at the Port of
Tacoma. The City is a one -hour drive (without traffic) from the region's main international airport in
SeaTac and is also near Bremerton National Airport and the surrounding industrial center.
Port Orchard has taken advantage of its many miles of waterfront. Water -dependent businesses
include boat maintenance, sales, and moorage in several public and private marinas.
6.2.2 Population
The City has steadily grown since its incorporation in 1890. As of 2020, Port Orchard's population was
15,587 according to the U.S. Census, and the Washington Office of Financial Management (OFM)
estimates the 2023 population at 17,480. The Kitsap Regional Coordinating Council's Countywide
Planning Policies have allocated the City a share of the Puget Sound Region's expected 20-year
growth, amounting to an increase of 10,500 people between the 2023 and 2044 planning horizon.
This is not a population growth projection, but rather informs the City how many new residents it
must plan for by way of zoning regulations and infrastructure capacity. The County's total allocation
is established in Vision 2050 using population estimates derived from the U.S. census.
20,000 6%
_j Population
—Average Annual Growth Rate 5%
15,000'
o
4%
10,000 3%
Q
o
a 2%
c
5,000
Q
1%
0 0 /o
1960 1970 1980 1990 2000 2010 2020 2023
Source: Washington Office of Financial Management, U.S. Census Bureau, LCG
Figure 1— Port Orchard population
Kitsap County Buildable Lands Report estimates that the City has an additional population capacity of
16,250 residents as of 2020. This is greater than the City's planning target (10,500 additional
residents) as found in the Countywide Planning Policies and means that the City has surplus capacity
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Chapter 6: Economic Development
for an additional 5,750 residents. Technically, this surplus means the City is not bound to implement
any significant changes to its land use and zoning regulations to accommodate its allocated growth.
However, it is prudent to begin planning now so that the City grows responsibly and uses its
developable land efficiently.
Another consideration is the population of the South Kitsap Urban Growth Area (UGA), the land
around the City that has been designated for eventual annexation into Port Orchard. The 2021 Kitsap
County Buildable Lands Report shows the UGA population in 2012 was 14,505, and the County has
allocated it an increase of 3,552 people by 2044. The Buildable Lands Report shows the UGA has a
capacity of 3,552 people through the planning period, which identifies adequate housing capacity
within the UGA to meet the UGA's population allocation.
Based on the 2021 Kitsap County Buildable Lands Report, the total population capacity for the City of
Port Orchard and the UGA would amount to a total population of 41,173. This has significant
implications for the City's economic development policies and its provision of public services. Even if
the City doesn't annex these areas, many of the residents living in the UGA work, shop, recreate,
and travel in Port Orchard. As such, the City must consider the proximity of these areas and impacts
to the City from this population when making decisions.
6.2.3 Employment
As of 2022, the Puget Sound Regional Council reports that Port Orchard hosts 7,722 jobs. This data is
derived from the Washington State Employment Security Department. Like recent Comprehensive
Plan Updates, the largest employment share continues to be service jobs, a broad category that
includes jobs in technical and scientific services, health care and social assistance, arts and
entertainment, and accommodations and food services. Retail jobs makes up the second largest share
with government jobs ranking third, which is attributable to Port Orchard being the county seat.
Overall, job growth has been primarily confined to the service and retail sectors, with some growth
in construction jobs over the past decade, likely reflecting the large amount of homebuilding
occurring in the community. Port Orchard has a notably smaller share of technology and information
jobs compared to Seattle and other parts of the Puget Sound region. The Washington State
Employment Security Department estimates that as of summer 2023 up to 25 percent of workdays
nationally are worked from home, and this trend has potential implications for the City, particularly
if technology and other knowledge industry workers in the region choose to live in Port Orchard due
to lower costs of living. The sector breakdown is shown below in Figure 2.
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3,500
Services
3,000
2,500
2,000
1,500
1,000
500
0
Retail --;
Government
Warehousing,Transport. Education
p Finance, Real Estate �
n
Ma
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Source: Puget Sound Regional Council (PSRQ Covered Employment
Figure 2 - Port Orchard employment sectors.
Port Orchard has also been allocated a set amount of employment growth by the Kitsap Countywide
Planning Policies. As required by the Kitsap Countywide Planning Policies, Appendix B- 2, between
2020-2044 the City must plan for an additional 5,400 jobs, with 2,571 of those being commercial jobs
and 560 being industrial jobs.
Almost two-thirds of the allocated employment growth is based on increased jobs in finance,
insurance, real estate, and services. The City must also plan for manufacturing jobs to nearly
quadruple, though the actual number is relatively small. Residents have voiced support for enabling
light industrial activities in established commercial areas, while there is less support for locating new
heavy industrial businesses in Port Orchard. The City should strike a balance between being open to
new industries and encouraging them to locate in the Puget Sound Industrial Center- Bremerton, a
nearby industrial park within the City of Bremerton.
The 2021 Kitsap County Buildable Lands Report found that Port Orchard currently has the capacity
for 5,243 additional jobs, which is slightly less than the allocation. This indicates Port Orchard needs
to add 153 jobs worth of employment capacity to support future employment growth targets, which
can be resolved by identifying additional commercial zoning in appropriate areas of the City. Jobs
capacity is determined by calculating the amount of additional commercial and industrial square
footage that can be accommodated within the City.
Additionally, the Washington Employment Security Department (ESD) publishes medium- and long-
term forecasts of employment growth by region. The chart below shows forecast new jobs by sector
in Kitsap, Clallam, and Jefferson Counties through 2030. Many of Port Orchard's prominent sectors,
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Chapter 6: Economic Development
including government, leisure and hospitality, and retail trade, are expected to see significant regional
growth in the coming decades, some of which should be captured by Port Orchard. On the other
hand, there are also expected to be a significant number of new professional, business, and health
care jobs in the region as well, which Port Orchard may wish to consider strategies for attracting.
GOVERNMENT ` -
OTHER SERVICES _ ■ 2020-2025 ■ 2025-2030
LEISURE and HOSPITALITY
EDUCATION and HEALTH SERVICES
PROFESSIONAL and BUSINESS SERVICES
FINANCIAL ACTIVITIES
.
INFORMATION
.
TRANSPORTATION, WAREHOUSING AND UTILITIES
■
RETAIL TRADE
WHOLESALE TRADE
.
MANUFACTURING
■
CONSTRUCTION
NATURAL RESOURCES and Mining
0 1,000 2,000 3,000 4,000 5,000
Forecast New Jobs
Source: Washington Employment Security Department
6.2.4 Wages
Wage data for Port Orchard is not directly available, but the U.S. Bureau of Labor Statistics does
collect data for all of Kitsap County. While this can be generally applied to Port Orchard, it should be
noted that these numbers may not account for local differences and that wage and employment
conditions change over time. However, many Port Orchard residents work outside of the city in
Bremerton and other job centers in the county, including numerous military installations.
The county has higher than average concentrations of those working in: architecture and engineering;
life, physical, and social sciences; community and social service; healthcare support; food service;
construction and extraction; and installation, maintenance, and repair.
The median household income (MHI) in Port Orchard in 2020 was $71,719, while the MHI for Kitsap
County was $78,969 and the MHI for Washington State as a whole was $77,006. Port Orchard's MHI
in 2020 represents a 21 percent increase since 2010 when adjusted for inflation, which is significantly
higher than the 12 percent increase in Kitsap County and 14 percent increase in Washington State
during the same timeframe.
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6.2.5 Businesses
Port Orchard has a variety of businesses that serve residents from throughout the greater South
Kitsap region. Most shopping and service areas are characterized by large and recognized chains. Key
commercial areas include the Bethel corridor, Mile Hill, and the Sedgwick/SR-16 corridor, where
national retailers and grocery stores make up a large part of the City's tax base.
Port Orchard is also home to several business clusters. There are a number of healthcare facilities
along the Tremont corridor that include medical centers and assisted living facilities. Located in the
industrial park are manufacturers of building furnishings, electronics, and aerospace parts. The Kitsap
County campus south of downtown has a large concentration of government jobs, which attracts
private firms specializing in engineering, land development and law.
There are also a variety of small businesses throughout the City. Many residents take pride in that
fact nearly all of the businesses on the core stretch of Bay Street are small and locally based. They
include restaurants and eateries, a movie theatre, antique shops, bail bondsmen and a number of
boutiques. Creating an economic environment that encourages small, local businesses has been
identified as an important consideration by the community. Port Orchard also has many self-
employed residents in home businesses.
6.2.6 Tax Structure
The City operates on an annual budget of approximately $128 million in 2024, with operating funds
representing approximately $47.6 million of the budget. The budget is divided into multiple accounts
that have dedicated funding sources, and each must have balanced revenues and expenditures each
year. Much of the budget pays for Port Orchard's streets, water system, sewer system, and
stormwater system, which are vitally important to maintaining quality of life and the local economy.
The "Current Expense" fund is perhaps the most visible to the public, as this fund is supported by
property and sales taxes and primarily pays for the operations of each City department.
The sales tax rate in Port Orchard is 9.3% and breaks down as follows:
State: 6.5%
City of Port Orchard:.94%
Criminal Justice:.10%
Kitsap County: .35%
Kitsap Transit: 1.10%
Emergency Communications .20%
KC Mental Health Treatment Services .10%
State Administration Fee .01%
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Chapter 6: Economic Development
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$900,000,000
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Taxable Retail Sales in Port Orchard
2012 2013 2014 2015 2016 2017 2019 2019 2020 2021 2022
As of 2024 the City's annual property tax is 1.072 cents per $1,000 of assessed value. Other property
taxes levied by a number of other local governments combine for a total rate of 8.42 cents per
$1,000 of assessed value. For a residential property assessed at the area's median value of
$469,750, the rate is equivalent to $3,044 per year.
6.3 Challenges
VISION 2050 calls on local governments to address the obstacles and special needs related to
economically disadvantaged populations, particularly through a housing lens. The City is committed
to improving the economic conditions of its residents by providing opportunities for living -wage
businesses to locate and grow within Port Orchard, by supporting educational and vocational training
opportunities, by promoting efficient land use with housing, jobs and mass transit in proximity to
each other, and by encouraging development and maintenance of affordable, adequate housing
options to serve a variety of household types. Emphasis is placed on providing these services within
designated local centers where a need for revitalization, infill development, and/or improvements to
transportation facilities have been identified.
6.4 Goals and Policies
This Plan addresses Economic Development in several categories, each with associated goals and
policies which provide the primary foundation for this Economic Development Element, supporting
both the overall vision of the Comprehensive Plan and the needs and desires of the community.
Goal 1. Support a diversified economy that provides primary living wage
jobs for residents, supported by adequate land for a range of
employment uses, and which encourages accomplishment of
local economic development goals.
Policy ED-1 The City should maintain an adequate inventory of land to accommodate targeted
employment growth.
Policy ED-2 The City should enable the establishment of new businesses and the expansion of
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existing businesses through fair, consistent, and timely permitting processes.
Policy ED-3 Encourage new economic development opportunities that utilize regional infrastructure,
including highway, rail, aviation, and marine links between Port Orchard, the Puget
Sound Industrial Center -Bremerton, the Port of Tacoma, Naval Base Kitsap, and the
greater region.
Policy ED-4 Promote business opportunities that utilize and attract the availability of a highly skilled
workforce and within geographic proximity to military facilities.
Policy ED-5 Promote business opportunities
opportunities, and other means
achieve living -wage employment.
that provide on-the-job training, educational
of assistance for disadvantaged populations to
Goal 2. Encourage new commercial development to occur within
designated centers near housing, multi -modal transportation
connections, and urban services.
Policy ED-6 The City should encourage residential and commercial growth in centers where job
opportunities and a diverse mix of retail and professional/technical office activities
are concentrated.
Policy ED-7 The City shall prioritize economic development and redevelopment in local centers.
Policy ED-9 The City shall encourage the continuation and marketing efforts of downtown
events and holiday festivals.
Policy ED-10 The City shall continue to implement a citywide wayfinding system that directs residents
and visitors to civic and commercial centers of local importance.
Goal 3. Encourage growth and diversification that maximizes
employment and improves the opportunity for residents to
both work and live in Port Orchard.
Policy ED-11 The City shall implement long-term economic policies that support the needs of
employers while meeting diversification and employment objectives and improving
the City's tax base.
Policy ED-12 The City should improve economic competitiveness by developing incentives for
business growth, expansion, and relocation, and by utilizing tools such as tax
incentives and modernization and streamlining of development regulations.
Policy ED-13 The City shall strive to ensure its future employment allocation is met with primary
jobs, which produce goods or services principally sold to clients outside of the City, to
support the creation of secondary jobs, which produce goods or services principally
sold to clients within the City.
Policy ED-14 Attract a variety of retailers, services, and light industry to provide diverse shopping
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and service opportunities.
Policy ED-15 Identify and eliminate disparities in access to economic opportunities by gathering and
incorporating community feedback in future land use planning activities.
Policy ED-16 Establish relationships with community stakeholder groups to better understand how
local and regional policies affect City residents, particularly as they relate to people of
color and people with low incomes.
Goal 4. Promote and support a healthy, diverse economy that provides
for a strong and diverse tax base, maintains an industrial base,
and encourages the retention, attraction, and expansion of
business in Port Orchard.
Policy ED-15 Recognize the arts as a contribution to the economic diversity of Port Orchard.
Prefer local, qualified artists for public art commissions.
Policy ED-16 Recognize and encourage tourism as a growing contribution to the economic
diversity of Port Orchard.
Policy ED-17 Encourage small business enterprises and cottage industries.
Policy ED-18 The City shall allow traditional home occupations as permitted by local regulations,
including live -work units.
Policy ED-19 Maintain Port Orchard as a unique and significant waterfront destination with
recreation and retail opportunities for tourists and residents.
Policy ED-21 The City shall support the full utilization and build out of industrially zoned
properties in the Port Orchard Industrial Park. Explore streamlined permitting
processes for future development.
Goal S. Increase residents' ability to enjoy a high quality of life and
access to healthy living opportunities, such as locally
produced food, nearby grocery stores, parks and open space,
and safe streets for all users.
Policy ED-22 The City shall ensure its land use code permits urban agriculture and community
gardens within compatible zoning districts.
Policy ED-23 Encourage the continuation and expansion of the Port Orchard Farmer's Market into
a year-round event and identify other sites around the City that could be used for
additional farmer's markets.
Policy ED-24 Support the local food economy and its capacity to grow, process, and distribute
food within Port Orchard and through the South Kitsap area and encourage local
restaurants and food retailers to buy and sell local products.
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Policy ED-25 The City shall ensure that centers allow for neighborhood scale grocery stores and
restaurants to ensure that the City's residents have access to healthy food options.
Policy ED-26 The City shall prioritize pedestrian, bicycle, and transit facility improvements that
connect grocery stores, healthcare facilities, and general commercial centers to
surrounding residential areas.
Goal 6. Provide a diverse mix and appropriate range of commercial,
industrial, and business park uses within Port Orchard and
South Kitsap area that will provide living wage jobs.
Policy ED-27 The City shall encourage mixed use developments within centers and other areas
designated for mixed -use development that will enhance the visual, economic, and
environmental quality of these areas and improve the transition between commercial
and residential districts.
Policy ED-28 The City shall require pedestrian orientation for non-residential uses and office or
residential uses above ground floor retail uses within centers.
Policy ED-29 The City should encourage the redevelopment of strip commercial areas through
changes to the land use code, landscaping code, and signage code.
Goal 7. Balance business and industrial development with environmental
protection and continue to maintain and enhance the quality
of life in Port Orchard as growth occurs.
Policy ED-30 The City should encourage new heavy industrial uses to locate in the Puget Sound
Industrial Center -Bremerton.
Policy ED-31 The City should encourage the use of "green" materials and techniques in all types of
construction by adopting the US Green Building Council Leadership in Energy and
Environmental Design (LEED) standard for public projects.
Policy ED-32 The City should remove barriers that prevent innovative low -impact development
strategies consistent with the adopted stormwater manual. Allow for multiple uses of
landscaping and reduction in impervious surface areas, such as bioswales, porous
paving, and vegetated roofs.
Policy ED-33 The City should encourage solid waste reduction by residents and businesses.
Policy ED-34 The City should ensure that development standards and regulations are permissive of
modern technologies that mitigate potential environmental impacts and provide
environmental benefits, with regular review and updating as new technologies emerge.
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Policy ED-35 The City should pursue ongoing actions and policies that are consistent with the Puget
Sound Clean Air Agency's targets for local emission reductions in an effort to address
and reduce greenhouse gas emissions.
Goal 8. Coordinate economic expansion so that it is concurrent with
capital facilities, multi -modal transportation networks, and
urban services, especially within centers.
Policy ED-36 Encourage the full utilization and development of designated commercial and industrial
areas. Promote revitalization and redevelopment within existing developed areas
to take advantage of investments in existing buildings and infrastructure.
Policy ED-37 Further explore ways to reduce long-term and commuter parking on the City's
downtown waterfront, such as the addition of a parking garage.
Policy ED-38 Support increased Kitsap Transit bus and foot ferry service during evenings and
weekends year-round.
Policy ED-39 Encourage the provision of high-speed Internet service citywide, including
implementation of fiber optic infrastructure and wireless internet, and require that
new development and redevelopment allow fiber optic cable to locate in utility
corridors and easements where feasible.
Policy ED-40 Encourage and incentivize the undergrounding of utilities where feasible.
Goal 9. Foster and facilitate partnerships and cooperation among
government, private corporations, and nonprofit entities to
promote the economic development goals and policies of
Port Orchard.
Policy ED-41 As appropriate, work with other jurisdictions, state and federal agencies, tribes, Port of
Bremerton, Kitsap Economic Development Alliance (KEDA), Port Orchard Chamber of
Commerce, Port Orchard Bay Street Association, and the Kitsap County Public Utilities
Districts, in marketing and developing the City of Port Orchard.
Policy ED-42 Work in association with community business groups, economic development
groups/agencies, and residents to create branding opportunities that identify and
promote economic development opportunities throughout the City.
Policy ED-43 Work with local community business groups to support growth and participation in the
organization, including supporting efforts to receive certification/accreditation with
other local, regional, state, and national economic development organizations.
Goal 10. Attract and encourage expansion of educational and medical
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institutions to assure a highly skilled work force.
Policy ED-44 Encourage the maintenance and expansion of public and private schools -within Port
Orchard to serve a growing population.
Policy ED-45 Encourage the development of higher education institutions within Port Orchard to
provide vocational, technical, and postsecondary programs.
Policy ED-46 Encourage the development and expansion of medical institutions that serve a growing
local and regional population while utilizing and attracting a highly skilled workforce.
Goal 11. Ensure adequate land use capacity for job growth needs in
commercial, retail, and industrial employment sectors.
Policy ED-47 Require commercial land uses within zoning districts in areas designated as centers for
growth.
Policy ED-48 In association with future Comprehensive Plan updates and amendments related to
commercial, retail, and/or industrial uses, review the City's land use capacity needs
and projections to ensure consistency with growth targets.
Goal 12. Support and recognize the contributions of the region's
culturally and ethnically diverse communities, institutions,
and Native Tribes.
Policy ED-49 Coordinate with Tribes in local and regional planning and economic development
efforts, recognizing the mutual benefits of coordinated growth.
Policy ED-50 Recognize Tribes' contributions to local and regional economic prosperity, land and
resource management, placemaking, and cultural enrichment.
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