06 - 20241113 Chapter 6 - Economic DevelopmentChapter 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.
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.
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
hub within Kitsap County.
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.- decreasing barriers to entry where possible.
• 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 overtime.
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, industrial, and residential land uses that, in turn, will provide opportunities for
businesses to locate within proximity to residents and create living wage jobs that contribute to a
healthy local economy.
The City of Port Orchard's economic development policies prioritize working with the private sector and
area employers to grow and improve our community and its economy. The intended outcome of this
collaboration is increasing quality of life and opportunity for our citizens. 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.
Port Orchard Comprehensive Plan DRAFT: November 2024
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 Shipyard (part of Naval Base Kitsap). From Bremerton, a one -hour
WSDOT ferry provides a connection to downtown Seattle, the economic and cultural center of the
Pacific Northwest. Additional Kitsap Transit operated 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. Port Orchard 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
Port Orchard 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 2024 population at 18,300. 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.
Kitsap County Buildable Lands Report estimates that Port Orchard 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 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
Port Orchard Comprehensive Plan DRAFT: November 2024
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 make 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 6-1.
Figure 6-1. Port Orchard Employment Sectors
3,500
Services
3,000
2,500
2,000
1,500
1,000
500
Retail --�
Government
Warehousing,Transport. Education
p Finance, Real Estate �
Manufacturi
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
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.
Port Orchard Comprehensive Plan DRAFT: November 2024
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 its own industrial park within the City, or 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 is resolved
by making minor adjustments to the zoning maps and by adding capacity within the Bethel Lund and
Bethel Sedgwick subareas. 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. Figure 6-2 shows forecast new jobs by sector in Kitsap,
Clallam, and Jefferson Counties through 2030. Many of Port Orchard's prominent sectors, 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.
Figure 6-2. Forecasted Jobs by Employment Sector
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
1,000 2,000 3,000 4,000 5,000
Forecast New Jobs
Source, Washington Fmployment 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
Port Orchard Comprehensive Plan DRAFT: November 2024
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
• 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.
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 several 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 Port Orchard. Many residents take pride in that
fact nearly all the businesses on the core stretch of Bay Street are small and locally based. They include
restaurants and eateries, a theatre, antique shops, bail bondsmen and several boutiques. Creating an
economic environment that encourages small, local businesses has been identified as an important
consideration by the community, as well as the importance placed on redeveloping and improving the
Downtown core. 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.S%
Port Orchard Comprehensive Plan DRAFT: November 2024
City of Port Orchard: 0.94%
Criminal Justice: 0.10%
Kitsap County: 0 .35%
Kitsap Transit: 1.10%
Emergency Communications: 0.20%
KC Mental Health Treatment Services: 0.10%
State Administration Fee: 0.01%
Figure 6-3. Taxable Retail Sales in Port Orchard 2012-2022
$1,000,000,0W
$900,000,0W
$800,0w,ow
$700,0W,0W
$500,00a,0W
$400,0o0,0W
$800,0w,ow
$200,00o,0W
$100,W0,0W
$0
Taxable Retail Sales in Part Orchard
2012 2013 2014 2-015 2016 2017 2019 2019 2CrM 211121 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
Port Orchard Comprehensive Plan DRAFT: November 2024
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
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 that provide on-the-job training, educational
opportunities, and other means of assistance for disadvantaged populations to achieve
living -wage employment.
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-8 The City shall undertake efforts to redevelop downtown in the interest of vibrancy,
community, and small business.
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.
MPort Orchard Comprehensive Plan DRAFT: November 2024
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 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.
Port Orchard Comprehensive Plan DRAFT: November 2024
Policy ED-24 Support the local food economy and its capacity to grow, process, and distribute food
within Port Orchard and throughout the South Kitsap area and encourage local
restaurants and food retailers to buy and sell local products.
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 its own industrial park
within the City, or 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.
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.
Port Orchard Comprehensive Plan DRAFT: November 2024
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), Po, ;South Kitsap
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 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.
Port Orchard Comprehensive Plan DRAFT: November 2024
Goal 1 1. Ensure adequate land use capacity for job growth needs in
commercial, retail, and industrial employment sectors.
Policy ED-47 Encourage commercial land uses on the ground floor of mixed -use buildings within zoning
districts in areas designated as centers for growth.
Policy ED-48 In association with future Comprehensive Plan updates and zoning 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.
Goal 12. Economic development strategies should address with
environmental concerns, promote equity and access to
opportunity, minimize displacement impacts to existing
businesses, recognize the importance of existing and
emerging technologies, and protect the quality of life.
Policy ED-51 Coordinate with regional jurisdictions and agencies to develop coordinated strategies
and interiurisdictional processes to mitigate the impacts of displacement.
Policy ED-52 Utilize PSRC's Displacement Risk Mapping Tool to identify areas within the City that
have higher risk of displacement based on neighborhood conditions, and establish
mitigation programs for these areas to promote equitable outcomes.
Port Orchard Comprehensive Plan DRAFT: November 2024