Economic & Community Development March 1, 2021

ISSUE: Consider and/or act on approval of the Economic Development Strategic Plan for the City of Murphy. STAFF RESOURCE/DEPARTMENT: Jared Mayfield, AICP, Director of Community & Economic Development SUMMARY: The MMDD and MCDC have held two joint work sessions to facilitate the creation of a Strategic Plan for Economic Development. At our first joint work session with the boards on November 9, 2020, we completed a visioning exercise and SWOT analysis. From that visioning exercise, guiding principles were drafted along with goals and objectives. These goals and objectives were further refined through a second joint work session on December 7th. On January 19, 2021, staff provided City Council with an overview of the board's work to ensure we were headed in the right direction. No changes were made by City Council. Upon receiving the go ahead from City Council, staff generated tasks forimplementation and completed the draft plan. Attached for your review is the "draft" Strategic Plan. At the meeting, discussion will focus on the implementation tasks, particularly the priority tasks to be undertaken within the first 12 months. ACTION REQUIRED: Consider and/or act to recommend approval of the Strategic Plan. ATTACHMENTS: Draft Strategic Plan

A Strategic Plan for

Economic Development

City of Murphy, Texas February 2021

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Acknowledgments

City Council

Scott Bradley, Mayor

Elizabeth Abraham, Place 1

Jennifer Berthiaume, Mayor Pro Tem, Place 2 Andrew Chase, Place 3

Ken Oltmann, Place 4

Sarah Fincanon, Deputy Mayor Pro Tem, Place 5

Jene Butler, Place 6

Murphy Municipal Development District (MMDD)

Angelia Pinaga, President Abbas Abidi

Tricia Culberth

Hema Multhanchetty

Nancy Schwartz

Murphy Community Development Corporation (MCDC)

Sharon Kindall, President

Bernine Khan

Nadeem Khan

LeKevin Lias Margaret Malone

Susy Ninan

Joy Tresp

City Staff

Mike Castro, PhD, City Manager

Jared Mayfield, AICP, Director of Community & Economic Development Reagan Rothenberger, MPA, Planner

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Table of Contents

Introduction 4

Community Profile 5

Diversity, Education & Income 6

Employment 6

Fiscal Analysis 7

Retail Trade Area 8

Retail Leakage 9

Existing Commercial Development Conditions 9

Recent Developments 10

Development Opportunities 10

What is Economic Development? 12

Guiding Principles 12

Goals & Objectives 13

Implementation 15

Funding Sources 15

Incentive Policy 15

Action Matrix 16

Priority Initiatives 18

Appendix A – Visioning Exercise Results

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Introduction Located on the northeast edge of the Dallas-Fort Worth Metroplex in Collin County, Murphy has evolved from a small, rural area to a bustling suburban community. The city’s dedication to quality development, sound fiscal policies and effective management have made it a premier community. Murphy is consistently ranked as one of the best suburbs by D Magazine and one of the safest Texas cities by Safewise.

Proximity to downtown Dallas and the major employment centers in Plano and Richardson, Murphy attracts families seeking good schools, vibrant residential neighborhoods and a safe suburban lifestyle. This once fast-growing bedroom community is now nearing build-out. The challenge with all suburban cities in this position is how to support and maintain the infrastructure you have while ensuring the community can adapt for the future. Murphy’s newfound maturity brings with it both challenges and opportunities.

While Murphy’s retail corridor is the envy of the region, the city is now facing the loss of first-generation tenancy in several retail centers. Limited land is available for new development. In addition, the year 2020 brought with it the challenge of the COVID-19 pandemic and highlighted the importance of serving the needs of existing business to enhance their success.

The city’s last economic development visioning effort was part of the 2008 Comprehensive Plan, and as noted above, much has changed since then. However, one thing that has not changed is the city’s desire to sustain a strong and healthy economy. The development of this strategic plan and implementation of recommendations will allow the city to take a fresh look at its economic development strategies. The local economy is constantly changing and as a result, economic development is a never-ending task.

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Community Profile Murphy is a primarily residential community located just 25 minutes from downtown Dallas and only minutes away from major employment centers in Plano and Richardson. Incorporated in 1958, Murphy served as a rural outpost with a railroad depot, post office and the schoolhouse serving as anchoring points for the surrounding agricultural community. By the 1970s farmers began to sell their large farms for housing developments. Murphy’s population was only 261 people in 1970.

Marked by rapid population growth since 2000, the city experienced a 471% increase between 2000 and 2010. Additionally, between 2010 and 2020, the city population is estimated to have increased by another 18% to over 21,000 residents. Murphy encompasses approximately 5.7 square miles.

Murphy Population from 1980 to 2020

Source: US Census Bureau (1980-2010); City of Murphy Community Development (2020 Estimate)

1,150 1,5473,099

17,708

21,000

0

5,000

10,000

15,000

20,000

25,000

1980 1990 2000 2010 2020 (est)

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Diversity, Education & Income

Murphy is a diverse and highly educated community. The population is comprised of 46% White, 36% Asian, 13% Black, and 5% other, 6% of whom are of Hispanic/Latino origin. Nearly 55% have a bachelor’s degree or higher. The city has a high proportion of family households with children compared to the State of Texas. 59% of occupied households have children under the age of 18 years. As a result, the average household size in Murphy is larger at 3.78 persons per household, compared with 2.84 for Texas. The median household income of Murphy is $139,989, which is more than double the median household income of Texas. The poverty rate is also extremely low at just 4.8% of the population.

Employment

The majority of employed residents, 60.5%, work in management, business, science, and arts occupations. Another 31.3% work in sales and office, or some form of service occupation. The top industries that Murphy residents work in are education, health care, finance, professional and business management services.

A relatively high percentage of employed residents worked from home prior to the COVID-19 pandemic. Almost one in ten employed residents in Murphy work from home, which is twice the rate of the State of Texas, overall. The COVID-19 pandemic and its associated lockdown is expected to permanently alter work patterns after recovery. Many professional workers will no longer need to commute into the office daily. A greater number of residents are expected to work remotely at least a few days a week, which will alter shopping and spending patterns.

The State of Texas experienced enormous job loss during the COVID-19 pandemic, with an unemployment rate of 8.3% in September 2020, up from 3.5% in September 2019, according to the Texas Workforce Commission. That same unemployment information is available at the County level. Collin County’s unemployment rate was 5.5 % in September 2020, up from 3.3% in September 2019. The Texas Workforce Commission also released an interactive mapping tool that breaks down the unemployment insurance claims by zip code. For the most recent data, the 75094 zip code area saw nearly 400 jobless claims between August -September 2020. Murphy was generally spared from the wave of wide-spread unemployment seen in Texas and other parts of the DFW area.

QUICK FACTS

MEDIAN AGE

36

MEDIAN INCOME

$139,989

MEDIAN HOME VALUE

$392,000

BACHELOR’S DEGREE OR HIGHER

54.7%

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Fiscal Analysis

The top two revenue sources for the City of Murphy are property tax and sales tax. Property tax receipts account for 55% of the General Fund revenues with sales tax receipts at 14% of total revenue. By comparison, our peer cities sales tax receipts on average account for a larger share of General Fund revenue at 19%.

Murphy’s sales tax revenues have increased considerably over recent years as more commercial activity located within the community. Prior to 2016, the City of Murphy was accustomed to experiencing a 10% annual growth rate in sales tax collections. From FY2016 through FY2019, sales tax receipts began to plateau averaging around a 4% annual growth rate. FY2020 receipts were 9.7% higher than FY 2019. Murphy generally benefitted from the COVID-19 pandemic in terms of sales tax collections as more residents stayed close to home for their shopping and dining needs. Another positive impact on sales tax collection for FY 2020 was the point of sale rule changes in Texas. In October of 2019, all online retailers, whether or not they held a presence within the state of Texas, were required to begin remitting sales tax to municipalities based on the origin of the sale. Since this law was put into place, the sales tax revenue generated via online sales has increased exponentially. Murphy saw an increase of 150% year over year.

Murphy Sales Tax Collection, Fiscal Years 2015-2020

* FY 2020 receipts are unaudited.

The city’s sales tax collections can be broken down into several categories for further analysis: Retail, Services, Dining and Other. “Retail” includes any general retail store. “Services” include professional services, such as sales in salons, as well as general services for taxable sales in unskilled labor, i.e. Citi Turf. “Dining” includes both fast-food and sit-down dining restaurants. “Other” includes sales from manufacturing companies and other non-standard retailers, including home-based businesses. Online sales tax revenue is included within each respective category. The following charts show the breakdown of Murphy’s sales tax collection for FY2019 and FY2020.

$3,491,775$3,871,699 $3,983,512 $3,905,540

$4,147,818$4,550,918

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

2015 2016 2017 2018 2019 2020*

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Retail Trade Area

The retail trade area is defined as the geographic region from which 80-85% of your customers travel from to spend money in your community. Murphy’s retail trade area serves a population of over 186,000, including residents from Lucas, Parker, Sachse and Wylie and portions of Plano, Richardson and Garland. Geographically, the trade area stretches from

Source: The Retail Coach

50%

23%21%

6%

SALES TAX BREAKDOWN BY CATEGORY

Retail Services Dining Other

45%

25%

21%

7%FY2019 FY2020

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the President George Bush Turnpike (PGBT) on the south, Jupiter Road to the west, FM 3286 (Lucas Rd) on the north and Lake Lavon on the east. This area was determined by economic development consultant, The Retail Coach, using cell phone data. As surrounding cities such as Lucas, Sachse and Wylie continue to grow their retail districts, Murphy’s trade area share may diminish over time.

Retail Leakage

Retail leakage means that residents are spending more for products than local businesses capture. The most recent data for Murphy is from 2018 in which sales exceeded $259 million with a potential of $3.4 billion in the overall retail trade area. This leaves a retail leakage of approximately $3.2 billion. Retail sales leakage normally suggests that there is unmet demand in the trade area and that the community can support additional store space for that type of business. However, leakage does not necessarily translate into opportunity. For example, there are strong competitors in neighboring cities that dominate the market, such as Kroger, Kohls and Target. Clothing, Furniture and Sporting Goods are obvious loss categories for Murphy with little room for improvement as these types of retailers are just outside the trade area in Garland and Plano, and too close to Murphy to justify additional locations. Another category loss shown in the 2018 data was pet services and pet supplies. Fortunately, a part of this demand is now being addressed with the recent opening of Hollywood Feed and Pet Suites. While there is a sizable amount of retail leakage from Murphy, a careful review of the data shows improvement is possible within select opportunity categories such as Food & Drinking places, Gift and Novelty stores, and Specialty Food stores.

Existing Commercial Development Conditions

Retail centers across the U.S. are diversifying their tenant mix to include medical and other office type uses. Murphy has experienced this trend with multiple franchised and independent medical tenants, from dental to chiropractic offices occupying retail space across the city. In most cases, Murphy zoning regulations allow office uses in retail centers.

In a November 2020 survey, Murphy had 1,824,839 square feet of constructed retail and office space with an overall occupancy rate of 87.2%. Retail uses had a slightly higher vacancy rate at 11.2% (205,004 sq.ft) compared with 1.6% (28,867 sq.ft) for office

87%

11%

2%

VACANCY RATE

Occupied Vacant - Retail Vacant - Office

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uses. At the same time period, an additional 36,167 square feet of retail space was permitted or under construction.

Recent Developments

Over the past five years Murphy has added over 185,000 square feet of additional retail and office space consuming 21.66 acres. This activity has quickly filled in much of the city’s available commercially zoned land. Some of the major developments include: Glen Ridge Professional Building, Full Spectrum, Shops at North Murphy Road, Evans Crossing, Heritage Plaza, Jason’s Deli, Timber Ridge Center, and three office buildings on Brand Road.

Development Opportunities

Murphy’s land use/zoning is dominated by residential uses. In fact, 74% of land area in the city is zoned residential. Murphy’s commercial activity is primarily concentrated along the FM 544 corridor. A few other business and office uses are scattered along N. Murphy Road from FM544, north to Betsy Lane. The intersection of Betsy Lane and N. Murphy Road serves as another small node of neighborhood-based retail and office uses.

The city currently contains approximately 127 acres of undeveloped land available. The majority of this undeveloped land is primarily located along the FM 544 and North Murphy Road corridors. Zoning designations for these properties vary from agriculture to commercial properties regulated by various Planned Development Ordinances. Below are aerial maps illustrating remaining, undeveloped property:

West side of FM 544

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East side of FM 544

North Murphy Road/ Betsy Lane

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What is Economic Development? There is no single definition that incorporates all of the different strands of economic development. It can focus on a range of topics – from supporting startups to attracting large corporations. The typical economic development model of focusing on industrial and base employment does not fit the City of Murphy. However, it is critical that a dynamic commercial sector is maintained in order to ensure healthy property values and sales tax revenue.

In order to define what economic development means for Murphy, that question was asked at a joint visioning work session conducted with the MCDC and MMDD board members on November 9, 2020. The full results of that visioning exercise are documented in Appendix A of this plan. For Murphy, economic development is defined as providing a diverse mix of goods and services to the community with modern infrastructure that improves our quality of life.

Guiding Principles

Guiding principles reflect the vision and values of a community. In the context of an economic development strategy, they are a set of statements reflecting how the community defines economic development. Each statement defines a desired future state. This strategic plan is built upon a framework of four aspirational guiding principles:

• Core Resiliency – protect Murphy’s core economic base by retaining business and providing them with the support necessary to continue doing business in Murphy.

• Quality of Life – position Murphy to define and maintain its distinctive character.

• Future Focused – understand trends and adopt a proactive approach to economic development.

• Quality City Services – maintain a diversified revenue base that supports quality infrastructure and capital assets.

DEFINITION:

Economic development is providing a diverse mix of goods and services to the community with modern infrastructure

that improves our quality of life.

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Goals & Objectives This strategic plan is designed to be a roadmap for the next three to five years of economic development activities. The following goals and objectives support the city’s guiding principles.

Goal 1: Increase emphasis on retaining existing businesses.

Objectives 1.1 Develop a toolbox of resources to support existing businesses 1.2 Continue a shop local program, such as Murphy Unites or similar 1.3 Seek opportunities to incentivize building and site renovations in strategic areas to

enhance development standards 1.4 Involve the business community with our Community Events

Goal 2: Selectively recruit new businesses to Murphy.

Objectives 2.1 Design and implement a marketing and attraction plan focused on the assets of the

city 2.2 Thoroughly communicate Murphy’s advantageous market and economic position 2.3 Create an incentive policy to utilize on targeted businesses 2.4 Maintain an inventory of available sites and properties 2.5 Attend key trade shows and events to make connections with industry players

Goal 3: Preserve and enhance Murphy’s quality of place through transformative projects.

Objectives 3.1 Develop a master plan for the beautification and enhancement of the commercial

district 3.2 Aggressively pursue redevelopment of the former Wachovia bank building 3.3 Explore use of city-owned property at Hawthorne Drive to enhance our community

branding message 3.4 Review zoning along the entire FM 544 corridor to ensure appropriate land uses

Goal 4: Target investment in modern infrastructure that enhances economic development.

Objectives 4.1 Establish a special district (PID or TIRZ) along FM 544 to finance, enhance and

maintain public improvements along the corridor 4.2 Complete sidewalk gaps along FM 544 to improve connectivity and walkability 4.3 Improve traffic flow and capacity at the FM 544 and Maxwell Creek Road

intersection 4.4 Implement initiatives to improve operational efficiency, i.e. traffic safety

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Goal 5: Improve brand awareness of Murphy and its shopping district.

Objectives 5.1 Develop a unified brand and marketing for Murphy’s commercial district 5.2 Rename FM 544 within Murphy to coordinate with community branding efforts 5.3 Develop a design theme that is used throughout the community to create a sense

of unity, and identity for both residents and visitors 5.4 Refresh the city’s economic development web site 5.5 Partner with the Chamber of Commerce to enhance marketing efforts 5.6 Expand the city’s presence on LinkedIn to reach site selector professionals 5.7 Provide an annual report to City Council to inform the public of economic

development efforts

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Implementation Implementation is one of the most important aspects of the planning process. A plan is only as good as the methods by which it is used as a tool for the ultimate goal, implementation. This section comprises the “action” items intended to guide economic development in Murphy for the next three to five years. It details a prioritized step-by-step implementation strategy in a user-friendly matrix format.

The MCDC and MMDD boards served jointly as the committee which reviewed every recommendation proposed in this plan. This plan should be reviewed annually through a joint meeting to monitor and evaluate the city’s progress on implementation. Furthermore, this plan shall be accessible on the city’s web site to aid in collaboration with the community.

Funding Sources and Tools

There are several funding mechanisms available to finance initiatives in this plan. City Council will determine the appropriate method, whether that be debt, cash or any combination thereof, as part of the annual budget process. The two primary sources of funding for economic development purposes are the Murphy Community Development Corporation (MCDC) and the Murphy Municipal Development District (MMDD). Both entities can generally fund similar types of projects and programs.

• The MCDC was created by voter approval in 2003 and is funded with a half (1/2) cent sales tax. A seven-member board of directors, appointed by the City Council, oversees the organization. The board plans and initiates projects on the city’s behalf that promote community enhancements such as parks, related open space improvements, and economic development. FY2020 revenue was $1,160,898 (unaudited figure).

• The MMDD was created by voter approval in 2011 and is funded with a one quarter (1/4) cent sales tax. A five-member board of directors, appointed by City Council, oversees the organization. The board plans and initiates programs that strengthen the economic base and promotes and retains businesses that generate sales tax revenue. FY2020 revenue was $490,425 (unaudited figure).

There are other potential tools that could be considered to enhance Murphy’s economic development program. These include the creation of special districts such as public improvement districts and tax increment reinvestment zones for the commercial district. Public Improvement Districts (PID) are authorized by the Texas Local Government Code, Chapter 372. Tax Increment Reinvestment Zones (TIRZ) are authorized by the Texas Tax Code, Chapter 311.

Incentive Policy

Murphy’s retail base occupies an enviable position within the region but is bordered by well-funded and successful economic development programs. Specifically, Murphy competes for new retail and restaurant opportunities with the neighboring city of Wylie. Wylie has been more aggressive in offering generous financial incentives to lure retailers. As such, this plan

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has a recommendation to establish a clear incentive policy and be more aggressive in using incentives to attract and retain high quality businesses to Murphy.

Recent approved incentive agreements have been performance-based, rebating back a portion of sales tax through the use of Chapter 380 Agreements. Due to circumstances beyond the city’s control, very little activity has materialized out of these incentive agreements to date. The city must continue to seek opportunities for private investment through incentives and other recruitment tools. A defined policy for evaluating investments is necessary for both retaining existing businesses and attracting new business.

Action Matrix

The following matrix is intended to provide the city with specific tasks to work toward implementation of the goals of this strategic plan. The table is organized with a section for each goal with each action item assigned a recommended time frame by Fiscal Year (FY).

Goal 1: Retain Existing Business

No Description FY21 FY22 FY23 FY24-25

1.A Provide funding for continuation of Murphy Unites program and expand reach. X X X X

1.B Establish metrics for impact of Murphy Unites on sales tax collection. X

1.C Survey residents on the impact of Murphy Unites program. X

1.D Host bi-annual focus group meetings to give local businesses the opportunity to meet face to face with staff and one another.

X X X

1.E Educate entrepreneurs and business owners about resources available from the Collin Small Business Development Center and SCORE.

X X X

1.F Establish a business expansion & stabilization grant program. X

1.G Establish a site & facade improvement grant program. X

1.H Provide Community Events that engage our local businesses. X X X

Goal 2: Recruit New Business

2.A Develop a competitive incentive policy for broad business categories. X

2.B Offer incentives to desired new businesses. X X X X

2.C Establish a presence with brokers and developers through social media, i.e., LinkedIn. X

2.D Communicate regularly with brokers of local shopping centers. X X X X

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2.E Annually attend trade shows (ICSC and Retail Live!) to recruit new businesses. X X X

2.F Assist property owners and/or brokers with marketing vacancies. X X X X

Goal 3: Transformative Projects

3.A Improve city-owned Hawthorne property:

• Remove chain link fence by Jason’s Deli. X

3.B • Engage Keep Murphy Beautiful for semi-annual clean ups.

X

3.C • Engage Parks Board once “Brand Theme” is in place to design improvements. X

3.D • Construct property Improvements. X

3.E

Engage a landscape architect with TxDOT experience to design median and entrance improvements on FM 544.

• Budget for median and entrance improvements

X

X

3.F Target incentives for former Walgreens site redevelopment. X

3.G Target incentives for former Wachovia Bank property redevelopment. X

3.H Review impact of existing Light Commercial zoning along FM 544 with emphasis on retail. X

Goal 4: Invest in Modern Infrastructure

4.A Survey sidewalk connectivity in commercial district. • Budget to fill prioritized sidewalk gaps.

X

X X

4.B Work with TxDOT to install crosswalks and pedestrian signals at the Heritage Parkway and FM 544 intersection.

X

4.C Hire a civil engineer to evaluate safety and capacity of Maxwell Creek Rd & FM 544 Intersection. X

4.D Budget for improvements to Maxwell Creek Rd & FM 544. X

4.E Implement a special district that is best suited for Murphy, i.e., PID, TIRZ. X

4.F Perform bi-annual traffic counts on major roadways. X X

4.G Budget for safety improvements at Walmart/Lowes median crossing at N. Murphy Rd. X

Goal 5: Brand Awareness

5.A Develop a new economic development web site using www.murphyedc.org. X

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5.B

Hire a marketing firm to create “Brand Theme" for Murphy’s Commercial District:

• Determine promotable strengths. • Determine how to set us apart from

region.

X

5.C Rename FM 544 after “Brand Theme” is established. X

5.D Present an annual economic development report to City Council in August of each year. X X X X

5.E Coordinate marketing efforts with Chamber of Commerce. X X X X

5.F Define roles and responsibilities between City and Chamber of Commerce. X

Priority Initiatives

The following initiatives were identified as of top priorities and city staff will endeavor to accomplish each of these within the first 12 months of this strategic plan.

1.A Provide funding for continuation of Murphy Unites program and expand reach.

1.C Survey residents on the impact of Murphy Unites program.

1.F Establish a business expansion & stabilization grant program.

2.A Develop a competitive incentive policy for broad business categories.

3.A Remove chain link fence between Jason’s Deli and city-owned Hawthorne property.

3.F Target incentives for former Walgreens site redevelopment.

5.A Development a new economic development website using www.murphyedc.org.

5.B Hire a marketing firm to create a “Brand Theme” for Murphy’s Commercial District.