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near term. Current and Projected Economic Conditions The mix of businesses in Pleasanton has evolved over the past two decades to include a diverse range of business types and sizes. In the 1990s, Pleasanton's local economy was characterized by several large employers, along with a growing number of smaller firms. During this time, strengthening business sectors included software, communications, miscellaneous materials and devices, and the service industry, specifically hotel, health and business services. Retail also continues to be a strong sector in the Pleasanton economy. While Pleasanton remains a desired location for corporate headquarters and large employers, the region is gaining a reputation for entrepreneurship. Over the past few years, Pleasanton and the Tri- Valley have developed as an innovation-driven economy with a specialization in information technology, scientific and biomedical products and services, innovation services, and business operations. As such, "homegrown" firms are now an important source of job growth and economic revenue. Despite the economic stagnation in the San Francisco Bay Area in the past few years, the recovery has been stronger in the East Bay. As a result, Pleasanton and the neighboring Tri-Valley cities have seen an increase in business expansion. In fact, as noted in a recent report prepared for the Tri- Valley Business Council (TVBC) the number of firms created between 1999-2002 outpaces the number of firms that closed by 34%. Additionally, during the same period, the number of firms that relocated into the Tri-Valley region was 45% greater than the number of firms that moved out of the region. Another indicator of economic stability is the vacancy rate for commercial office space, which is once again declining, although absorption levels comparable to the mid-1990s are not anticipated in the near-term. The outlook for historic Downtown Pleasanton is very good. Since the reconstruction of Main Street in 1993, a distinct market niche has developed, and the tenant mix has broadened to over 500 businesses offering a variety of commercial and professional services along with numerous restaurants and retail shops. A Downtown Specific Plan was completed in 2002 and includes programs to support both the visual and historic character of downtown, as well as the district's success as a commercial area. Over XI-2