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Big Strides for a Small City:
How Needles is Moving the Needle on Housing, Transportation and Economic Development

Case Story

The City of Needles is a small rural town of under 5,000 residents located in San Bernadino County on the eastern edge of the Mohave Desert, where California meets Arizona and Nevada. On any given day in the summer, there’s a good chance that Needles is the hottest place in the entire United States, with temperatures rivaling those in Death Valley. The Colorado River offers a quick escape from the heat, and an abundance of recreation opportunities that the city counts on to lure visitors from neighboring areas. Leaders envision the city to be a family-orientated prosperous desert paradise with diverse economic opportunities. A decade ago, the road to get there seemed as dismal as the fate of its famed Route-66, but now, because of an influx of state funding and a booming cannabis industry, the future is looking bright for Needles and offering this dust bowl city renewed hope.

The 2008 financial downturn hit the City of Needles hard. “More houses were burning down than being built and more businesses were closing rather than opening.” That was what a councilmember told City Manager Rick Daniels when he was hired in 2013. At that time Daniels inherited a city where the revenues were declining, leading to furloughs, pay reductions and layoffs. In 2013, the city sold its hospital, right-sized its expenses and began investigating the likelihood and feasibility to host the cannabis industry.

Three years of hard work and hard choices followed. In 2016, the city passed an ordinance that regulated the cannabis industry. Low electricity rates and a streamlined permitting process attracted new industry leaders to the city. While things were beginning to look up for the city, they still found themselves with aging infrastructure, a lack of staff capacity and outdated plans.

The city’s general plan was last updated in 1986, and the housing element hadn’t been updated since 2005, making it out of compliance for several cycles. Patrick Martinez, now the assistant city manager, was hired in November of 2017. One of his first tasks was to get the city into compliance. He developed an RFP for a full update of the city’s general plan and received responses with a million-dollar price tag. “That was one-fifth of the overall budget for the city. There was no way we could pay for something like that,” says Martinez.

At the same time, the state began cracking down on cities who were out of compliance. The council set the goal of compliance and empowered the staff to do what needed to be done to get there. Martinez worked with representatives from the State Department of Housing and Community Development (HCD), letting them know that the city wanted to do the proper planning, but just didn’t have the funding to do it. “I turned my pockets inside out and let them know that we were motivated to be compliant, but we just didn’t have the money to do it.”

The state had just launched its SB2 Planning Grant and Technical Assistance Program to make funding available to all local governments for the preparation, adoption and implementation of plans that streamline housing approvals and accelerate housing production. Unfortunately, the City of Needles didn’t qualify for the first round of funding because they did not have a compliant housing element. The city worked diligently with HCD and its technical assistance team headed by Placeworks, to cobble together funding and planning support to get the work done. The city gained compliance for its 4th cycle in October of 2019, and its fifth cycle the next month. “We just kept biting off pieces of the apple as we received more money,” said Martinez. A few months later, the city received LEAP funding to update its land use element, then another $200,000 from the CalTrans Sustainable Planning Grant Program to update its transportation element. However, just as the city finished all its work, it was time to start the 6th cycle housing element process. The regional agency SBCTA came through with funding to support that and the city’s development code, and then COVID hit.

While 2020 proved hard for many cities, it was a key turning point for the City of Needles. The revenue from the cannabis tax reached $1.2 million, allowing the city to reinvest in reliability system upgrades for its electric system, street improvements and other community beautification projects. 

Success breeds success. In the years to follow, the city’s revenues, community investments and grants have continued to grow. In 2022 the city proposed revenues of $11.1 million, which is almost double that of just three years prior. Also in 2022, the city joined the BOOST Program, which offered it technical assistance and capacity building support. In the early months of the BOOST Program, ILG helped the City of Needles write a successful $2,179,702 Clean California Grant Proposal for the Marina Park First Beach Project, which aims to transform an underutilized area along the Colorado River into a shaded park with seating, native trees and plants, a walking path and a play area for children. The site will also have a public restroom, drinking water fountains, trash bag stations and safe access to the riverfront which will help rehabilitate an unusable public space to one with that demonstrates its cultural significance and fosters local pride.

The BOOST Team has also helped write grants to support composting, active transportation projects and planning efforts, assistant city manager Patrick Martinez says it is not the biggest value of the program. “The BOOST Program gives communities like ours a voice in Sacramento. To have someone in Sacramento who has your back is huge.” The BOOST Team was able to help the City of Needles receive additional technical assistance to support its housing goals from both SCAG and the Placeworks Team. Now that the city has officially received it compliance letter for its 6th cycle Housing Element from HCD, its going after its “Prohousing Designation,” which could help the city be even more competitive for state funding.

With the holidays coming up, Martinez says there is just one thing on his wish list, “Housing! In order to keep our economic model working, we are going to need more housing.” So now, ILG’s BOOST Program partners at California Coalition for Rural Housing are working to help make that wish come true.

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