>> All right.
We are going to get started
if folks can take a seat.
Uh, we got a lot of important, busy people here,
so I want to make sure we get things going
and and get to the business of the committee.
We have a number of our of our members here,
and the others are planning to show up.
So they'll be trickling in.
All right, uh, we are going to start this hearing.
Uh, good morning, everyone,
and welcome to the first ever
legislative hearing on California's
downtown recovery.
Uh, this select committee was created so that
the legislature can develop and support policies
that will directly help our struggling downtowns
and the recovery post Covid 19 pandemic.
I want to thank everyone who is here with us today.
I know that the California Downtown
associations are here.
We timed that, uh, very well.
So we have representation from,
uh, across our entire state.
Uh, I also, and I'll be introducing them shortly,
really want to give a huge thank
you to our mayors who
are here and the partnership of the big city mayors,
which has been absolutely critical
not only to this hearing,
but to the work that we are going to do together.
I also want to thank the members
of this select committee.
It is Monday morning.
Usually they are in transit up here
for a session later today.
Uh, and so they all chose to come here early
because of the importance of this, uh,
work that we're going to do as a committee and
the leadership that they are going to put forward,
not only in the legislature, but in their
respective communities around the state.
Uh, this committee, as I said,
was created to help, uh,
it is created to be in partnership
with our local communities,
with our cities, and to develop policies that can
truly support the recovery of our downtowns.
Everyday life may be back to normal
for most Californians, but sadly,
as we know, our downtowns have struggled
to recover and return to normalcy.
While most of the cities throughout
the country and across
the globe are functioning at pre-pandemic levels,
California is facing unique
and significant challenges.
As the San Francisco representative
and I want to recognize my mayor,
Mayor Breed, who is here.
Uh, we know these challenges are impacting,
uh, our downtown.
Many downtowns, including San Francisco,
were built with far too little housing,
forcing the local economy to depend on
daily commuters and local businesses.
But we all know that the pandemic
changed the nature of work,
with many of California's workers transitioning
to working remotely full time,
causing previously bustling downtowns
to empty out seemingly overnight.
The crisis has been further compounded
by skyrocketing rent,
growing homelessness and the opioid crisis.
Many small businesses have struggled
to regain their footing,
and vacant storefronts have become
common as restaurants,
stores and other small businesses have
closed their doors to decline
to due to the decline in commuters,
residents and visitors.
However, this is not a solely a San
Francisco or Bay area issue,
although sometimes we become
the target of much of this.
Um, this is a California issue.
It's a California challenge, and it's one that
requires all of us from Southern California,
Northern California, coastal cities
and inland cities to work together.
We all have to be part of the solution,
and we all must have a central
forum to discuss this issue,
so that our cities are better
for both our constituents
and for visitors to this great state.
What better way to than to start this conversation
by bringing local government
representatives to Sacramento to
discuss these issues with us?
I do want to be clear that, uh,
though we all have a responsibility,
uh, whether local elected officials or, uh, mayors,
city council members,
the state has a responsibility to,
uh, the state must lead in partnership
with our cities.
Uh, California will struggle
if our downtowns are struggling.
And I want to say that we're here not
only to learn from the challenges
that our mayors are experiencing in
our downtowns are experiencing,
but also the solutions that
you all are leading on, uh,
the innovation that you're bringing forward to
these challenges and the ways in which our,
uh, state legislature, uh,
and our state government can support
that work and uplift that work to ensure that our,
uh, downtowns recover strongly and hopefully even
better than they were before the pandemic.
I want to introduce our first panel,
but before that,
um, I wanted a little bit of housekeeping.
Um, witnesses of each panel will come up together
and provide their testimony
by order of introduction.
After each witness has testified,
the members of the committee may
ask that panel questions.
Uh, the panel questions or take the opportunity
to make any remarks at the end of the hearing.
There will be an opportunity for public
comment for individuals in the room.
Public comment will be limited to to 30s per person.
And we are not accepting public
comment over the phone today.
But you can submit written
testimony to the committee
at Assemblymember Haney at Assembly Ca.gov.
And the email, uh, is also on our website.
With that, I want to welcome up our first panel, uh,
the big city mayors that I mentioned
from from throughout the state.
And I want to thank them for their
partnership and their leadership.
As I said, we have representation
from inland and coastal cities
as well as Northern California
and Southern California cities.
Uh, so if you'll please join me in welcoming
Mayor Darrell Steinberg of Sacramento,
Mayor London Breed from San Francisco,
Mayor Rex Richardson of Long Beach,
and Mayor Patricia Lock Dawson from Riverside.
Uh, also, I want to say I'm very happy
that we can have the mayor,
mayors of Sacramento and San Francisco here,
my two homes and also, uh,
proceeding, uh, a potentially another
playoff battle coming up between
the Kings and Warriors that we can
have some some peacemaking here.
Uh, two great cities and four amazing
cities with great leaders.
Thank you so much for coming to Sacramento today
to participate in this important dialogue.
I am going to turn it over first to our host mayor,
uh, no stranger to this topic and to this building.
Uh, welcome, Mayor Steinberg.
>> I used to work in the old building, you know.
Mr.
Chairman and members,
wonderful to be with you and wonderful to be
with three of my leading colleagues
on addressing the challenges,
but also the great opportunities we
have for California's downtown.
I'm also really happy to be joined by.
My partners here in Sacramento, uh,
from the business community,
the Downtown Partnership,
the Metro Chamber, and, uh,
the people who are working day and night to
make sure that our downtown recovers and,
and transitions to a a whole new way.
And I think that's what maybe the theme
of today's hearing might be about.
I don't know if Sacramento is unique, but.
Let's just say that we have been disproportionately
impacted by the impact of Covid.
In one significant sense,
our downtown has largely been centered
on as an employment base and mostly state workers.
As you know, we have many state owned
and leased buildings throughout our downtown.
And while even prior to Covid,
we were beginning to reimagine what
our downtown could be about,
um, certainly we relied on that state worker,
uh, inflow for our restaurants, for our lunches,
for our daytime activities,
and even our nighttime activities
for many years and decades.
And then, of course, the world changed.
The world changed because of Covid.
And and maybe it would have changed anyway,
because remote work, I think,
has becoming, um, a trend.
And even though I've had some complaints
about the pendulum swinging
as far as it swung from five days
a week to zero days a week,
the truth of the matter is,
remote work is happening for good reason.
It's better for workers.
It's more convenient.
It's less expensive when you consider
the cost of transportation and child
care and long commutes from suburbs,
uh, to come to work downtown.
And yet it has had a dramatic impact on our downtown
in a negative way in the short terme.
Because while downtown Sacramento is booming
with endless weekend festivals,
with the Golden One Center
and all of its events with
a brand new convention center and beautiful,
iconic new theater, um,
and a food scene that is really becoming
well known throughout the state and the country.
During the daytime especially,
we have seen the impact of not having
as much foot traffic as we would
as we have had before.
And of course, when you combine
that with the social condition,
the increase in homelessness,
which we're living with not only in Sacramento
but throughout our state,
the visual impact has been, uh,
palpable to the people of Sacramento.
And so we have several choices.
We can either complain about it.
Or we can use the fact that state
workers are not coming back.
I mean, they're coming back now two days a week,
which is somewhat of a pendulum now swinging,
I guess, to the middle.
But I don't think it's going to be more than that.
And so with our downtown partnership
and our private sector partners,
we have decided that there's only one way forward,
and that is with positivity and with
actually implementing a different
and new and maybe more exciting vision
for what downtown can be.
And it's centered on three principles
or three main foci.
One.
Housing downtown.
30 years ago, when I was a young council member,
we had a big debate about our street.
I hope all of you have been to our street,
one of our, uh, new, uh,
real emerging and exciting commercial
corridors in Sacramento.
30 years ago, we had a big debate about whether
we should do mixed use on our street.
And some of the development committee said, no way,
you'll never build housing downtown.
We decided 30 years ago, when I was much younger,
elected official,
that we were going to do mixed use.
And it was a wise decision because we are increasing
our housing starts like never before in
the downtown with a significant
focus on affordability,
although we need more affordability.
Second is food.
Restaurants.
I mean, the number of legislative staffers who are
now young staffers who are living in the Midtown.
And in the downtown area.
It's exciting because they're
choosing to live close to
where they work and where they can have a good time,
and the food scene is a big part of it.
And the third prong.
Is entertainment, sports
and entertainment of all kinds.
You know, we're proud of our kings.
Go, kings!
Mayor breed, um, we're proud of our kings.
We've got, um, a top notch USL soccer franchise.
I know it's a hard one, but the A's are coming
for three years to West Sacramento,
just across the bridge.
But it's more than that.
We're developing out our rail yards,
which is one of the largest
undeveloped infill projects in the entire country.
Um, with more entertainment, more sport hospital,
a a state funded, uh, $500 million courthouse.
We're going to begin now.
We now have the money to redevelop our waterfront.
And so entertainment and sport of all kinds,
it's that combination that is going
to vault us into the future.
And finally, and I'll turn it over to my colleagues.
What role can the state play?
Because I know that's the question here today.
Well, certainly.
Um, Sacramento has often been frustrated by
the fact that with all the state assets here,
there's no tax or tax base in some ways is reduced
because there's no taxation of the state assets.
I don't think it would be reasonable
or right to say begin.
Taxing government property,
that's not going to happen.
But where the state,
especially when your budget and economy improves,
can find ways to invest capital
dollars in some iconic
destination amenities for our waterfront
or for our rail yards,
whether it be new, um, new music venues or new, uh,
destination and tourism venues, uh,
or or a museum row we've talked about
along the west end of Capital Mall,
where you can invest one time capital
money in helping us, uh,
deal with the loss of,
of revenue from the loss of state workers.
That would be hugely impactful one time funding.
And in addition.
If we could ever get to a point where we're
never bringing back redevelopment,
but where we could bring back
some form of tax increment
or other financing for housing, for housing.
Um, that combination of one time capital
investment in destination amenities,
plus ongoing funding for housing,
plus regulatory relief for all the above that would.
Help you the state.
Be a partner with the city and region of
Sacramento to reimagine our downtown.
Thank you.
Thank you, Mayor Steinberg.
Mayor breed.
>> Thank you, Assembly Member Haynie and the committee.
It's great to be here with all the big city
mayors to really talk about something
that we consistently are really having
discussions in our big city,
mayor conversations about the future of our cities
and in particular our downtowns
as a result of Covid.
Um, just San Francisco, from,
from from my perspective over the years
and looking at the history, um,
San Francisco has a bit of
a situation where it does ebb
and flow after earthquakes and fires
and other real challenges.
Our city has not just gone back to what
it was before those various situations,
but it has always become something better.
Uh, San Francisco has definitely
had significant struggle
as it relates to the challenges,
uh, after the pandemic,
mostly because when you look
at our city and our economy,
it's centered around industries that had
the ability to mostly work from home.
And that's the tech industry.
Uh, in the past, San Francisco really
didn't have to work hard,
uh, to attract visitors to attract
downtown businesses.
But clearly, things have changed.
San Francisco is California's, um, uh,
California's the fifth largest economy in the world,
and we are home to the best educated workforce
and the largest venture capitalist market.
However, as I said, the same tech
and innovation economy makes, uh,
that makes San Francisco a driver
of California's economic success
has left us extremely vulnerable
to the impacts of remote work.
Office attendance is at 40% 46% of
pre-pandemic levels as of March.
Uh, that's really an improvement from January,
when attendance was at 43%.
Uh, but we can no longer rely on five
days a week and 9 to 5 employment.
Remote work has led to a historic office vacancy
rate of over 36% in our downtown,
which is led to a major drop in foot traffic.
And the loss of foot traffic has really hurt our
downtown restaurants and small businesses.
Uh, there are so many real challenges
with Union Square.
We're seeing about a 25% vacancy rate in
our Union Square businesses as well.
Although we are seeing luxury retailers sign new
and larger leases in the Union Square area,
including, uh, Chanel and Yves Saint Laurent
and a lot of those luxury brands.
Uh, the city isn't what it used to be,
but I am in the same boat as, uh,
Mayor Steinberg and pushing for more of
a positive reinforcement of not just
what we need to be based on the past,
but what we can be for the future.
The vision I laid out in my state
of the city address includes
something very similar to what
Mayor Steinberg talked about,
just really a vibrant, mixed use,
24 over seven downtown and neighborhood,
no longer 9 to 5 financial district,
but 24 over seven.
And my 30 by 30 plan is to bring 30,000
residents to the downtown neighborhood by 2030,
by making buildings that exist,
converting them into,
uh, housing, and making it a lot easier.
The voters this past March passed
a proposition that also ways
the waives the transfer tax in order
to help provide some support.
In order to do that, you know,
we've heard a lot of concerns around public
safety and the need to improve public
safety as a way to spark,
um, new and improved development and opportunities
in our downtown in San Francisco.
I want to put out the facts,
because there's a lot of perception
about what San Francisco is
and what's happening there.
But when you look at the data,
it tells a completely different story,
as well as the experience of those who are
visiting and live in San Francisco now.
In fact, 2023, we saw one of the lowest crime
rates we've seen in the past ten years,
not including 2020,
when we shut down for a global pandemic.
We see those trends continuing because of the work
that we are doing to address retail theft,
open air drug dealing and using car break ins
and a number of other challenges that persist.
Overall, we are still seeing in 2024 those
numbers continue to play themselves out.
Property crime is down another 32%
and violent crime is down 14%.
We had no homicides during the month of February.
To attract a diverse range of industries,
I created a new tax credit for
office based businesses.
Downtown initiated.
Comprehensive.
Of business tax reform and passed zoning reforms
to allow for more flexibility downtown
to invite new activities and attractions,
especially in art and culture industries.
We've allocated $12 million over
two years for new events,
activities, outdoor concerts,
holiday festivities and I know
Marissa Rodriguez from
the Union Square Alliance is joining us here today,
who's been doing a great job and been
an extraordinary partner in those efforts.
We launched Vacant to Vibrant,
where we provide opportunities
for our property owners to provide
space for those who want to do pop ups in
the downtown area and have made it easy to do so.
We've paused tax increases.
We've given out $220 million in grants
to over 2600 small businesses.
We've made changes in our transportation networks.
We've pushed time and time again
to provide the opportunity
to make it easier to do business in our city,
and we are seeing some initial positive results.
We have over 700 new businesses registered per
month at the end of the 2023 city cycle,
international airline travel at SFO exceeded 2019
levels for the first time since Covid 19.
Hotel occupancy rate was up over 80% pre-pandemic
levels at the end of 2023,
and we've had a stronger year for conventions,
bringing in over 400,000 visitors,
resulting in $725 million in economic impact.
San Francisco is the AI capital of the world.
Of the top 20 artificial intelligence
companies in the world,
eight are right in San Francisco, including open AI.
And so far last year, they leased a million
square footage of space, and by 2030,
they expect to lease over 12,000,000
square foot of space in San Francisco.
Overall, demand for office tenants
in the market grew to 6,000,000ft²
in the first quarter of this year,
up from 4.2 million at the end
of 2023 and approaching
pre pandemic levels in office demand.
So we know that the excitement
is starting to happen.
We're starting to see change.
We are trying to make it from a local
level a lot more easier to do more.
Um, prior to the pandemic,
everything in San Francisco
was about how much money we want to charge everyone,
how do we get as much as we can from
the city versus incentivize?
And now we're at a different place where we
need to do more to incentivize opportunity
and incentivize the ability for people
to do business in San Francisco.
And so today, I know there's a discussion around
a number of pieces of legislation that could help
open up the doors for the possibility
of incentivizing
new opportunities in our downtowns.
I'm really grateful to our various legislators,
including Senator Wiener, Chair Haynie
and Assembly Member Ting,
who all are carrying really important pieces of
legislation to help revitalize our downtown.
And I hope you all will explore those, uh,
pieces of legislation and seriously
consider a supporting them.
Um, as Mayor Steinberg said, I want to just quickly
touch upon the three things that I also think
that the state can help with in
order to help move us forward,
to revitalize our downtown.
Number one, supporting the various pieces
of legislation that are going to
have significant impacts on our ability
to do business in our downtown.
Number two, retail theft has been
a real challenge in our city
and has had a tremendous impact
on our retail establishments.
And there are potentially proposed
by Senator Wiener,
a bill to help us combat some of
the challenges around retail theft.
And I hope you will seriously
consider making considerable
changes that will help us on a localized level.
The last thing I want to mention specifically is
the need for us to focus on making sure that
we are doing all we can to publicize the very
best of our major cities in San Francisco,
to bring attention to our state as a destination,
a state that provides opportunity.
I know there were some commercials and a whole
other strategy around marketing, uh,
that happened right after the pandemic,
but we definitely need more of that.
We want to make sure that the realities
of what's happening in our cities,
uh, is marketed to places all
over the United States,
as well as the world, to ensure that California
remains a destination for business and tourism.
Uh, others are consistently trying to define who
we are in the media in a very negative way.
And it is important that we talk
about the facts and the truth of
who we are through how we advertise,
through how we communicate,
and throughout how we tell our own story
and and create our own narrative of excitement,
prosperity, and a move towards the future.
Thank you.
Thank you, Mayor Breed.
I appreciate you both acknowledging
and recognizing some of the challenges,
but also correcting the record a bit about our city.
There's definitely a lot to be proud of
as well and a lot to be hopeful about.
Uh, Mayor Richardson,
welcome from the city of Long Beach.
>> All right.
Well, thank you.
Certainly.
Thank you, Chair Haney and your committee,
uh, for welcoming the big city mayors.
I'm Rex Richardson, the mayor
of the city of Long Beach.
So we're the seventh largest city in California.
Uh, we have a big downtown on the waterfront.
We're only coastal downtown on
the waterfront between San
Diego and San Francisco of any
big city in California.
Uh, a little bit about our city.
Uh, we're home to Long Beach State.
We're home to one of the fastest growing
space clusters in America.
Uh, space Beach, where we're up to
almost 5000 space tech jobs there.
Really proud of.
Uh, we're here with, uh,
with our downtown Long Beach associates.
So they're here with us today.
Uh, we're also home to the port of Long Beach,
which is right adjacent to our downtown,
second largest port in the United States,
where Long Beach and Los Angeles combined.
43% of everything that's important to our country
comes through our combined seaport.
So we're working community that places
a big emphasis on downtown and tourism.
Uh, just first, I want to just echo
what I heard from our mayors.
I'm actually optimistic about our future.
We've seen some very difficult challenges over
the past few years, a global pandemic.
We've seen, uh, economic challenges.
And in Long Beach, we're facing a reality
of a climate transition where Long Beach
is sitting on the largest oil
field in North America,
the Wilmington Oil Field.
We generate about $60 million in
revenue to our city a year.
Much of that revenue is locked
into the coastal area,
which helps with the maintenance
of our coastline,
our tourism area.
And based on SB 1137, we're going to see
a reduction where we're going to have to
lay off every single lifeguard on our coast
by 2029 if we don't find solutions.
But we're turning those opportunities,
those challenges,
into big opportunities to grow our economy
and new and more sustainable directions,
betting on things like like
the port space beach, uh,
doubling down on tourism,
bringing more music back to our communities.
But we're going to need the state's help to make
sure that this climate transition doesn't lose
thousands of jobs and makes sure that we are being
smart and responsible through the process.
Uh, our downtown is a vibrant
community of businesses
and residents and families, cultural institutions.
We're proud to be one of the most culturally
diverse cities in America.
Uh, and we're home to the the nationally
recognized aquarium of the Pacific,
uh, our beautiful, iconic waterfront,
uh, the Queen Mary, which is back.
The Queen Mary is open and in the black for
the first time in more than a decade.
Uh, we're placing a big focus on the future, uh,
where we'll be developing a downtown waterfront, um,
uh, amphitheater with 12,000
seats to open the public
and welcome people back to our downtown.
Uh, we are opening up a thousand more
hotel rooms between now and 2028,
when we'll be hosting at least seven
events for LA 28 Olympics.
And we're also.
And including in that is a hard Rock hotel,
which also helps with, uh,
going with the going back to our music
roots as a city, uh, culture.
Uh, we have certainly experienced challenges
with respect to our recovery.
Uh, but we, you know, we're working hard on it.
We have a plan, our downtown roadmap, uh,
plan that we're working to revitalize
much of the small businesses
and bring more public safety into our downtown.
I will tell you, one of the big
challenges is the mental health
and substance use challenges
that we see in our downtown.
We have a light rail.
The metro line ends in our downtown,
and we have a regional end of the line policy.
So no matter where you start in the county,
at the end of the line,
you get off the bus in Long Beach.
And so every day we have to worry about how figuring
out how to get how to serve people,
get them in the housing,
get them the support they need.
And the reality is we're a public
health jurisdiction.
We have resources to help.
But the problem has grown to a place where
where we need to boost our capacity
significantly in order to to meet
the moment and meet this crisis.
Uh, I'll also say that while our
city is seeing reductions
in gun violence and reduction in homicides, uh,
aggravated assault has increased is direct
correlation to some of the substance
use challenges and mental health challenges
we've seen in our communities.
And so in our downtown, we need to place
we need a more robust infrastructure for
mental health support in our communities
to be able to provide those services.
Uh, next.
Enhancing community safety.
Safety is incredibly important to us.
Uh, we've seen vandalism, graffiti.
>> While we know if someone's speaking.
Um, while.
We certainly seen, uh, instances,
instances of vandalism and graffiti,
we we certainly want to, uh.
Sorry.
I keep hearing a voice.
Okay, thanks.
Uh, we, you know, we certainly support some
of the efforts we're seeing coming out
of Sacramento to place a greater emphasis
on accountability and consequences.
And we know that they need to be balanced
with opportunities for young people.
So we support those things.
But we certainly want to open up,
open up tools for our cities to be able
to meet some of the challenges with,
with retail theft and some of those challenges.
Uh, so what are we doing to meet our challenges?
Last year, we declared a state of local emergency,
an emergency proclamation by our city council.
It allowed us to really plus up our capacity,
expand more outreach,
expand shelter capacity, you know,
speed up housing production.
We're getting housing approved in 60 to 90 days now,
uh, 100% affordable housing.
And we're exploring every housing type where
the Adu per capita leader in California.
And so we're doing the things we need to do.
Uh, we are a California pro housing jurisdiction.
We're proud of that.
And we just we're proud that the state
has awarded us for a second time
the encampment resolution funding that's
been significantly helpful to us.
This round is targeted at our downtown, $5.3
million to go and resolve encampments
within our downtown.
I will also say that we're a public health city.
We're one of three cities in California
with its own public health department.
So we've done homeless outreach and shelter
for many years in Long Beach,
but we've needed to expand our capacity quickly.
And so while we're out doing more capacity,
more outreach on homelessness,
uh, the work on mental health
is actually responsible.
The county is responsible for that.
And so you'll have folks doing outreach,
representing two different jurisdictions
with no required,
no requirement to coordinate.
If you're a public health jurisdiction,
we need to make sure that the state
is funding cities who already have
the capacity to do homelessness
to make it comprehensive,
so we can do that same outreach on mental health.
It just makes sense to be able
to solve those challenges.
Uh, we're taking big steps to address some of
the commercial vacancies in our downtown.
The reality is, I concur with Mayor Breed
and Mayor Steinberg that we don't
anticipate that we're going to return
to the same levels of office space.
And no, no city has really solved
the conversion problem of how do
you convert commercial space to
to an office space to housing.
But we want to do so.
Uh, folks want a window that opens.
And a lot of these buildings, the windows are open,
it's expensive, it's costly.
So we're exploring things like partnerships
with our educational
institutions and updating our downtown
plan and our standards,
uh, so that we can bring 10,000
more units in our downtown and create
more of an urban core with our
educational institutions.
How can we partner with our educational institutions
to allow some of these, you know,
some some of these office buildings
may not look like great apartments,
but they can make great dorms.
They can make great student housing.
So how can we incentivize some of those things?
Uh, and finally, uh, we want to reposition
our entertainment district,
uh, to bring more sports, more music.
We mentioned the live entertainment venue,
the amphitheater.
But our arena arena used to host LED Zeppelin,
Grateful Dead.
All these folks recorded live
albums in our downtown,
and we've got to invest in the resources
and to bring more people into our downtown,
because businesses aren't going to make their money
on the on the lunchtime crowd like they used to.
So we need more activations throughout
the week to help support our restaurants.
And so we're taking those steps.
Uh, what are some things that the state can do?
I think it's important we can
we can establish the vision.
We can set the big goals.
But in order to achieve that vision,
we need the state to step up, be a partner for us.
I know it's difficult budget time,
but we the hat funding has
been significantly has been
really significant for us.
We've been able to place a real focus
on ending youth homelessness.
We want to make sure we prioritize,
have funding in our budget.
Uh, the encampment resolution.
I can't say enough how important that that
those resources have been for us.
Also, we're really proud of big city
mayor supported proposition one,
the mental health reform and the bond.
We want to make sure that some of those resources
come locally to cities who are you know,
this is where the rubber meets the road.
We can build the infrastructure
for residential mental health,
housing and do the things we need
to do in our communities.
Um, for cities with their own health departments,
fund local is our message.
Uh, and then lastly, uh, I don't know
if other mayors are dealing with this,
but there's a real pressure on local media
and we're seeing our big newspapers going down.
Right?
You know, going from big newsrooms to one person or
two people covering the city the size of Atlanta.
And and that creates a challenge with
helping to bring our economy back,
because the regional media will only
show up if there's a shooting,
if there's a homicide.
Uh, but we need to get our local stories out.
There are a number of bills right now that
help strengthen local journalism.
We encourage you to support
them because we're seeing
a local storytelling emergency in our communities,
and we need to get these stories
out about the incredible.
Restaurant renaissance is happening in our cities.
The music, the culture, the people.
Because right now they're having
a very difficult time in big cities.
Telling their stories.
So thank you so much.
I11 last thing.
I would just say I'm optimistic simply because we've
seen we've seen big challenges the last few years.
And many of us remember in 2020, the,
you know, death of George Floyd,
the murder of George Floyd,
our our downtown was burning.
We had thousands of people protesting and unrest.
But I'm optimistic because that very next morning,
we saw thousands of our residents
out there sweeping up glass,
boarding up windows, painting out graffiti,
showing the real spirit of the unity
and the grit of our people.
And that's why I'm optimistic that
we can we can certainly recover.
But the work is not done yet.
We're beyond sweeping up glass
and painting out graffiti.
We have to redesign our downtowns to really be
more sustainable and healthy for the future.
Thank you.
Thank you so much, Mayor Richardson,
for for that message.
Both of concrete things that we can
do to help and also of optimism.
I know we all, we all we all need that.
I know it's been a consistent theme as well.
And I appreciate your leadership.
Now for for our last, uh, mayor, uh,
Mayor Patricia Lock Dawson from
the city of Riverside.
Welcome.
>> Thank you, Chair Haney.
And good morning.
And thank you for your interest in this topic.
I think as as my other big city mayors said,
it's something that's important to every one of us,
and we're all struggling with
some of the same issues.
So I'll try not to repeat too much,
but I did want to begin my comments by,
um, a quote from a book the called Our
Towns by James and Deborah Fallows.
I don't know if any of you are familiar with it,
but in in the final portion of the book,
they list ten characteristics of great cities,
and I'll just say a few of them.
But things like people work together
on local possibilities
and don't allow disagreements to cause division.
Public private partnerships are meaningful and real.
People know their civic story.
They have a research university.
They have big plans.
But most of all, their final thing,
the most important thing.
What is it?
They have downtowns.
And those downtowns are thriving.
And Downtown Riverside really uniquely
incorporates each of these aspects.
And we've been doing it pretty
well for the past, I'd say,
you know, 150 years since we've been around.
And I'm I'm proud to say that
downtown Riverside is really,
really the cornerstone in the center of our
city and the envy of many cities around us.
But of course, we're not without our challenges,
as everybody here has stated.
So over the last ten years as mayor, breed has said,
we've made strategic investments
in the heart of our city.
We've expanded housing opportunities,
we've revitalized some of our old spaces,
and we've been cultivating our story,
our narrative through community engagement.
And because of this, our downtown
has accumulated unique assets,
which really allowed us to survive the pandemic
in a way other cities were not able to.
Um, since 2014,
we've stood up new apartment buildings.
We added almost 900 units of housing this last year,
including another 816 entitled
or under construction.
So we've got a robust live work environment.
We built a new main library.
If you haven't seen it, I'd ask you to go see.
It's a pretty cool modern building,
but what we more important
we did was convert our existing
main library into a one
of a kind cultural experience called
the Cheech Marin Center
for Chicano Arts and Culture, which is super cool.
I invite you all to come down to see it.
Yeah, it's pretty cool.
The Cheech and that library,
they've they're serving as our anchor institutions,
and we use them to create a lot
of community engagement.
So for over two decades, our community
directly investigated
in telling invested in telling our story,
also through a series of statues on our main street,
which we call our civil Rights walk.
Um, these came up organically, uh,
supporting local heroes and social justice leaders.
And this is a kind of a one of a kind thing.
We've just received a $3.4
million grant to make it an outdoor,
cohesive sculpture park.
But as we said with some of the previous comments,
we know that public safety is
important to prosperity.
We can't have prosperity without public safety.
And since the pandemic, we've seen an increase
in residents and businesses feeling unsafe.
And this has been true across the state,
regardless of what the data show.
Right.
I think that's it.
It's regardless of what the data show,
our crime has decreased as well.
And yet we still hear this narrative
about feeling unsafe.
So what we did this past year is invested
in a downtown security pilot program.
We increased our security presence on our
pedestrian mall and surrounding areas,
and that's helped deter crime.
But more important, it's increased
the public's feeling of safety.
Right.
Just to see folks out there.
So right now we're in the process of evaluating
the efficacy of this pilot to see,
um, how it's going and sharing
those results with you.
So we've also led the way by working to keep
homelessness from expanding through
targeted interventions such as a jail in-reach
program we call Project Connect,
where we essentially intercept,
um, formerly incarcerated,
coming out of our downtown jail
to connect them with services.
That's been very successful.
We've seen a 50% success rate in that already,
and we're also building housing in partnership
with our community college to provide
termed out foster youth who are
experiencing homelessness with
housing and a pathway for college
and career readiness,
as you know, termed out foster youth have
an 80% chance of becoming homeless.
They are really key to combating homelessness
at a very rudimentary level.
So that's part of my initiative as mayor
to end youth homelessness in the city.
And notably, we've seen a 27% reduction in this
last year alone in youth homelessness,
whereas most of the states saw
a rise in that population.
So economically.
Like many downtown areas,
Riverside has underperformed in the wider
regional economy since the pandemic,
with our employment being down about 2.5%
lower than it was in the first quarter of 2020.
But despite that short Tum performance
underperformance,
the longer Tum picture shows downtown Riverside has
added jobs at a faster rate over
25% compared to the state,
which is at 23%, and National, which is 16%.
In downtown accounts for only 3.4%
of our city's resident population,
but contributes significantly to our
tax base as well as our employment.
Um, it accounts for about 7.5%
of the total employment in our city.
We also have an active chamber of commerce
in downtown partnership for businesses.
So all of these factors have helped
us keep our vacancy rates low,
averaging about 4.6% over the past ten years.
So we're we're doing pretty well
keeping those spaces occupied.
Let's talk about challenges though, right?
That's what I think.
We're here.
That's the more interesting thing.
Uh, because of our downtown's government economy,
we have a large area of our downtown that becomes
empty after normal business hours.
So I believe in the power of ten.
This is a concept that the project
for public Spaces have.
If anybody seen this, no one building should have
any less than ten uses throughout the day,
throughout the week, throughout the month.
So there's always something going on.
So that's something I'm endeavoring to do in
our downtown with our government buildings.
If it's empty after 5:00, have a concert.
Hey, maybe I should get LED Zeppelin
to come to Riverside.
Oh, wait a minute.
So that's why the addition
of housing and hotels have
become increasingly important in our downtown.
So one way the state can help
is to take stock of some
of these empty government buildings that are around,
or the lots they own, and evaluate the cost
to convert these spaces into housing.
A challenge we run into.
Rex referred to this as um,
we have business buildings that
were built in the latter half of the 20th century.
They're much more difficult
and expensive to retrofit
than things that were built earlier on.
So, um, I think the state can help
make this process a little
bit easier for developers through
legislation or incentives.
Um.
Development incentives for cities would
allow us to grow our downtown
with mixed use developments similar
to pro housing incentives.
So the tools and I'll just wrap this up,
I know we're not bringing back redevelopment.
But the tools intended to replace redevelopment
have really not been universally applicable,
and they've really lacked successful implementation.
We have to do something different.
We need the state.
Really.
I'm trying to do some different
things because I agree
with most everything else
the other mayors have said.
But what I'd really like to see is
the state somehow to evaluate the gap from
the loss of redevelopment and the efficacy
of the tools at our disposal,
to perhaps give us a guidance as to what some
additional tools could be in the future.
All right.
I'm going to stop there.
Thank you.
Assembly Member Haney and all,
everybody on the committee, um,
for your time and evaluating
the state of our downtowns.
And please, I'd love to host you all
down in downtown Riverside sometime.
Thank you.
Thank you so much, Mayor Dawson.
I will say I'm very familiar with
these two two downtowns,
but you also both make very strong
and exciting cases for your downtowns.
And how much is happening there and how much
there is to be excited and hopeful about.
I think that's one thing that also, as we, I'm sure,
dive into some of the the challenges
that we have and some
of the ways that we can support
the work that's happening.
You all have also bring brought
so much light to how essential
California's downtowns are to our identity,
to our culture, to our economic prosperity,
not just for the people who live
there or close to there,
but for our entire state and
and everyone in your regions who
experience all that your downtowns
have to offer offer.
That's what we are truly here to,
to fight for and to sustain and to grow on.
There's no future for California without
without a prosperous, strong downtowns.
And and I appreciate the the optimism that you
all have have brought forward today as well.
And it's on all of us to come forward with solutions
that can make sure that we bring that to reality.
I do just want to say a few things,
and then I'll open it up to my my colleagues.
I appreciate the, the,
the some of the common themes,
but also some of the unique things
that each of you brought forward.
Each of our downtowns, uh, throughout our state,
have some similar challenges,
but also unique aspects,
whether it's the port or tech
and AI or the the challenges
around government and state buildings.
All of these things are unique in their own way,
but also shared across our state.
And I want to say that, uh, this the timing of this
hearing is very important because, as you all know,
we are in the midst of the budget process and some
of the things that you all brought forward,
uh, have, have, have highlighted some of the things
that we need to to target in terms of investments.
And also there's legislation in front of us
and will be over the coming weeks and months
that address many of the the the questions
and challenges that you all brought forward.
And I hope that for us as committee members,
we can bring forward in those conversations
in our committees on the floor with
our colleagues about how you all
are telling us that this is
essential to our ability to be
able to support our downtown.
And also, this is the beginning of
the process for us as a committee.
This is the first hearing.
As I've told many of you,
we already have a second one
planned will be coming down to Southern California.
We'll be coming around the state.
So we take those invitations as well,
and will want to go deeper on all of the issues that
you all brought forward so that we can develop
solutions to these challenges together,
whether that's arts and culture and nightlife
or tourism or some of the questions
about the responsibility that
the state has with our buildings.
Uh, office to housing, conversions,
flexibility of uses.
These are all things that are
very much on our agenda,
but we know that we can go deeper and reflect
the realities that you all are facing and
the solutions that you all are fighting for.
So with that, I'll open it up to, to my colleagues.
I, I see, um, uh, Miss Wicks, who's here also,
Mayor Richardson gave a shout out to some of your
work around local journalism, which I wasn't.
I didn't know that that that one
was going to come up to today.
But this is just showing the the many things
that we can do to support our downtowns.
Uh, Miss Wicks, thank you.
>> Uh, Chair Haney, and thank you for pulling
together this conversation.
I think it's, uh, really an exciting
opportunity on how to use a select
committee because the downtown question
hits so many different issues.
Um, so thank you for that.
And also, just to the mayor's, uh, being a mayor,
I think is the toughest job in America right now.
God bless you all.
And thank you for your leadership
and your continued effort to try to,
um, really be an active part of the solution.
So you all are at the tip of the spear.
Um, you know, I'll just make
a quick comment and then
I've actually do have to run to something else.
But, um, I think with great crisis
is great opportunity, um,
and the ability for us to reimagine
what our downtowns look like.
And I went to, uh, the christening of the Bay Area
counsel's office where you spoke, Mayor Breed,
about with that same sort of sentiment of remember
what happened after the earthquake
and how we reimagine downtown and what that
could be and what that could look like.
And so in that sense, I actually have hope that we
can solve this problem in a way and actually,
you know, create more vibrant communities downtown.
Um, and the way that I view a big
part of that solution is housing,
as you all know, um, you know,
more mixed use housing, you know, more foot traffic,
uh, more integrated housing downtown.
And so I just for you all as
a blanket to sort of comment,
um, look to us as thought partners.
I know there's this constant tension between
the cities and the state often that exists,
and I think some somewhat healthy.
And I know, um, some of us came
from local government and, um,
but are there opportunities, uh,
you made a comment about.
About redevelopment and the loss of redevelopment.
And we hear that all the time.
We did a housing tour, um, I don't know, 30 plus.
Some of us went to like 15 different
stops all over the state,
big cities, small cities constantly.
It was the lack of redevelopment
funds and why we're in this
housing crisis that was brought
up every single time.
And so whatever we can do and we ask your
help to figure out how as a state,
we can provide more ongoing funding
for affordable housing,
more streamlining things that make things better.
We want to be thought partners,
even if we don't always agree.
So just, uh, appreciation.
Appreciation.
Let's take this to Oakland.
I have a lens that I view this through
Oakland as an Oakland resident,
a proud Oakland resident.
We have some unique challenges there as well.
Um, and thank you all for your leadership.
Thank you, Mr.
McCarty.
>> Thank you.
And first of all, thank you, Matt.
Assembly Member Haynie, for asking to
establish this select committee.
And all of us come from different perspectives.
The great downtown of Rockland, of course,
is over here on one side.
And, you know, but big cities and small
cities all across California,
we're all in this together.
And great to hear from our mayors,
my my mayor, Mayor Steinberg,
uh, Mayor Breed, where I lived
in San Francisco as a kid.
I went to Long Beach State with Mayor Richardson.
I haven't lived in Riverside.
I don't think so, but.
But we helped fund the Cheech program
in the budget a couple of years ago,
so I'm well, well aware of that.
So today's hearing is of course
focusing on the state.
And we heard about the state.
It's not all great and realities.
And you know, it wasn't one thing
that got us into this.
It's not going to be one thing that gets
us out and think about our downtown
here and our our mayor alluded to,
we are a state workforce.
That is our economy here.
And even in the best of times, the best of times,
our small businesses and merchants
had a tough go of it.
You know, we know that, you know,
when there's a big event, a festival,
they're doing great.
Um, you know, sometimes when, you know, after work,
when state workers went home, it wasn't always easy.
So the last few years after the pandemic
and the impact of what's left and, you know,
you talked about it,
Mayor Richardson and mental health and homelessness,
all these things combined create many,
many challenges,
and we're not going to get out
of it through one thing.
But I think all these issues that we're
grappling here with housing,
public safety issues, mental health,
all these things impact all of California.
But I think downtown the most.
And that's why, you know,
we're talking about the problem here,
but we're focusing on remedies as well.
And I know that our our mayor
talked about housing here.
And one big thing that we've been
working on is our state housing,
our state offices and adaptive reuse.
And it's not a panacea.
Some some projects are super hard.
There's not always easy place to
put in windows, as you said.
Um, but we have started a project here that
the Ed building we selected a developer to do,
you know, between 500 and 1000
units there of adaptive reuse.
And that is very, very promising because
if you look at the core of Sacramento here,
you know, 60 years ago, we had 30,
40,000 more people here.
And then we wanted to bring in downtown housing.
And it was our, our it was our
big swing for the fences.
That's going to change our downtown
and mixed results.
If you look at our area like Midtown,
where we have housing and business
and shops during the pandemic,
they thrive because people were living there.
So on this housing thing, I, I concur with,
uh, Assembly Member Wicks,
this is, I think, one of our best strategies.
And it's not easy there.
You know, I know that it would be great
to get back redevelopment 2.0.
And we have, you know, even during the budget surge
last couple of years, we didn't make it happen.
So now we're going the opposite direction.
It's going to be harder.
So one of the things that I want to ask
you is what policy changes can we make?
I know, um, some member you you proposed a measure
a couple years ago about, you know,
permitting and building standards for
the private sector, adaptive reuse.
So whether it's private buildings
or state buildings,
you know, what things do you have for us?
That we could change policies and laws
to streamline it, reduce barriers?
Um, we get the money issues and we're on that.
But what are some of the lower hanging policy
issues that we could address today?
So if anybody wants to address that.
Meta.
Okay.
Well.
I know one of the things I wanted
to touch on in my comments,
but didn't get to,
is I don't know if it is a policy issue,
but it is certainly a performance
issue and that is accountability
around the implementation of proposition
one and the other large
funding streams that the state has
put forward to combat homelessness
and the the behavioral health
and substance abuse crises.
The and I know San Francisco is different
because it is a combined city and county.
Those of us who represent cities
that are within larger
counties have some significant challenges.
The core of the problem is in the urban core.
And yet the counties largely
are majority represented by
the unincorporated county or other
parts other than the city,
and so ensuring that the state
insists on outcome based
accountability for the expenditure
of these dollars.
How many outreach teams are actually
on the streets in our downtown?
How many people are we actually getting
off the streets in our downtown?
How many people are actually getting into
both temporary and permanent housing?
How many people are getting wraparound services?
Outcome based accountability
around the implementation
of those dollars is essential.
And I will tell you, in my experience,
both at the state level and the local level,
I would say humbly that government
at all levels does not do a very
good job with accountability
and outcome based accountability.
We talk a lot about it and we mean well,
but we haven't actually created sort of
the transparent tools that allow us
to compare and contrast the performance
among in between
our cities and counties when
it comes to actual success.
And I think I would focus less
on new laws and new policies,
although many are needed, of course,
but more on the basics around how to show
the public that the dollars we're spending
are actually leading to the results
that the public expects to see.
I'll just add a add a few things.
One, we're a coastal city.
The Coastal Commission takes about two years to take
on projects if we need to activate our communities.
Even activating our beaches for big
events requires coastal permits.
We hosted the NFL kickoff a few years ago.
That took a long time to get permitted.
If we're going to bring more people in and activate,
we need an expedited process.
Maybe you could place it on coastal downtown coastal
areas where it's unique downtown challenges,
but expedite the coastal process
will certainly help.
Uh, two I'm supportive of some of the work
we're seeing with Senator Wiener,
with the open container stuff that we're exploring
continue to head in that direction.
It may not work everywhere, but in town towns,
there may be places for activation that helps.
Uh, the conversion of office space.
Again, no one's figured it out.
If there's a way to incentivize it,
either through sequa or other ways
to incentivize conversion,
we support that.
So we can develop local pilots
to convert 1000, 2000,
3000 units to bring more families
and students into our downtown.
So those are three, uh, policy suggestions.
Um, that just following on that.
What what um, Mayor Richardson said
the the whole sequence streamlining.
There was a series of laws that
went through last year.
I think that are going to I'm keeping
my eye on that will be very helpful.
I'm an environment.
I'm an ecologist, and I think we need school reform.
Um, it's been problematic, right?
It's been it's been difficult
and it slows down things incredibly.
It doesn't mean we have to throw
the baby out with the bathwater.
We can just adjust some things.
And I think that will help incentivize
some of these developers,
because for them time is money.
Right.
So anything we can do to make
things go more quickly,
I think is is important.
And um, yeah, I think I'll just leave it at
that and let Mayor Breed say something.
I just wanted to follow up and throw this in here,
and maybe Mayor Breed can can address this as well.
Uh, one of the things that I think when it
comes to these conversions and flexibility
and uses all of you represent downtowns
that have some historic,
uh, nature to them and some
historic older buildings.
And I wonder if that's something that
you all are thinking about in terms
of how to balance some of those changes
that need to make be made,
and whether some of those questions around
preservation and protection are coming up,
and how you're thinking about what's possible.
And I can add to that because, for example,
I'm sure you're familiar with the old I Magnum
building that is at in Union Square.
That is one of the most historical locations,
department stores in Union Square
that is being converted to,
uh, office housing, but will also have retail.
It's an incredible way to provide mixed
use for project of that nature.
We have examples of ways to make it possible
because we also need to face reality.
I mean, not all buildings that are downtown
have the ability to be converted.
Um, but for the ones that we've been able
to identify so far, 8 or 9 buildings,
there's a genuine possibility to not just convert
them to housing and dorm room space,
but to do so in a way that provides
more than just housing.
It could potentially be mixed use.
Um, I will say that the types of tools
that are helpful are similar
to what the other mayors have already stated around,
um, sequa and some, you know,
temporary reforms to Sequa as
it relates to downtown could
be significantly impactful,
uh, as well as financing tools similar to
what we use for the betrayal power plant,
uh, station to develop this financing mechanism
to get the project done faster.
Um, so even if it's not redevelopment 2.0,
the ability to use additional
financing tools to move
the funds necessary with the cost of materials,
supplies, the interest rates,
it has been very difficult to not
only produce housing in San Francisco,
but also to convert.
And I think making it as easy as possible will help.
Um, the last thing I want to just mention,
as it relates to additional
tools that could be extremely helpful for us, uh,
around revitalizing our downtown is to get control
over the illegal fencing that's happening,
and the state law that has created a bit
of a challenge for us to address it.
I know there will be talks around
some possible amendments to that.
We don't want to impact the original
intent of the the law
as it relates to providing people
an opportunity to vend,
do vending on the streets of San Francisco.
Uh, but the people who are fencing
and stealing from retail establishments
and using that as an opportunity to sell
on the streets of San Francisco,
including our downtown, it's had a devastating
impact on retail as well as,
um, the street conditions in San Francisco.
So I do think all of these things are going
to be really important to addressing
some of these challenges in order
to revitalize our communities.
Thank you, Miss Reyes.
>> Thank you so much to chair.
Assembly member Matt Haney
for putting this together.
And I loved hearing from the four of you
because you it was a common theme.
I mean, you're so proud of your cities.
You talk about a vibrant downtown.
You talk about the work,
the investment that has been put in.
And I really appreciate that.
Um, I think it was my colleague,
Assembly Member Wicks, who said,
you know, you have the you have the hardest job.
You also have the best job because the community
knows you and they know they can call on you.
They that you are their direct
conduit to everybody else.
Um, the one of the comments that
was made by Mayor Steinberg
was about the state investing in destination venues.
I like that in San Bernardino.
We used to have well, we do still have
the National Orange Show swing auditorium.
Rolling Stones when performed.
LED Zeppelin three Dog Night.
I mean, the list goes on and on,
yet nobody knows about it anymore.
We don't have that.
It's not available, and having an investment
in destination venues, I think,
is something that we should look at when
we're looking at one time investments.
Um, the redevelopment, I know we say that
that's we're never going to get that.
I still have hope.
I think that before I leave,
we're going to come up with this redevelopment.
2.0.
We have to do something.
It was we recognize there were some
abuses and then we lost it.
But there was great use of that redevelopment money
and finding some way to bring that back.
Um, the tax incentives the mayor breed
you talked about vacant to vibrant.
I like that again using the word vibrant.
And whenever our mayors are talking
about referring to their
cities as vibrant or bringing
them back to being vibrant,
I think it brings great hope for me personally.
Um.
The other thing was about the media.
Um, I think Mayor Richard Richardson
talked about this,
um, about local media and, um,
Mayor Breed or maybe it was
it was Mayor Locke Dawson
talking about it being our own narrative.
I'm tired of other people talking about
how horrible or downtowns are,
how crime rate is sky high.
We know the statistics.
Crime is down.
Crime is down on every single level.
And that's the narrative we need to be expressing
to the rest of the world that we're not broken.
We may need some things that
need to be taken care of,
but we are not broken.
We are not crime infested downtowns.
We have issues and those have to
be dealt with without a doubt.
Uh, balancing accountability without opportunity.
And I think, uh, um, Mayor Richardson,
you talked about that.
The one thing you also said
is let us have the vision,
then you help us achieve that vision.
And I think that's true because as we all know,
we don't have the money we had before.
Um, so we've got to let you create your own vision,
and then we've got to figure out ways whether
it's policy regarding housing.
And we we've heard lots about how
we can help to streamline.
Although I do have a colleague who says
he doesn't like the word streamline.
He he had two words that I don't remember now, but,
um, it has to do with finding a better way,
an easier way for you to achieve the vision.
You know better about your city's,
you know better what to do and how to do it.
And sometimes I get it.
The state just needs to get out of the way.
But we have to remember that
we are for the entire state,
and we do have to have those
guardrails for everyone.
But to find ways to help you with your vision,
I think is extremely important.
In Riverside, when we're talking
about destination venues,
the Cheech Marin, uh,
Museum of Chicano Art is is world renowned,
the biggest collection of Chicano art.
And I'm very proud, as my colleague,
Assembly Member McCarty mentioned,
the state helped with that seed money
to get it started to that right.
We recognize, of course,
you had some great advocates here,
too, but we recognize how important that was.
And now everybody is going is going there.
Um.
Mayor Steinberg, you talked about
specifically about prop one,
about outcome based accountability.
I'm pleased to tell you that Speaker Rivas has
a new standing committee on accountability,
and one of the first meetings had
to do one of the first hearings
had to do with accountability on all this money.
We're investing on homelessness and making
sure that we look at the numbers,
how many people have been housed,
whether it's temporary housing, permanent housing,
how many have been helped with mental health issues?
Um, I just want to to say how proud I am of of
what you have the four of you have provided.
And I think having you as,
as advisors on some of what we want
to put through to revitalize our
and to recover our downtowns,
I mean, you're doing a great job,
and we have smaller cities that do
need that kind of mentorship.
And I appreciate that from all of you.
And finally, um, um, uh, Mayor Breed on the fencing.
We know that's a big issue.
I sit on a select committee on on, um,
retail theft and we're trying to
find ways to help our cities.
But there's a big difference between
fencing and street vendors.
Fencing is illegal, Street vending is not.
And making sure that we protect
our street vendors as well.
But I want to I don't have a question for you,
just to thank you for for your
very positive attitude
about your cities and helping us to use that as
we help the rest of our cities as they recover.
Thank you.
>> Good morning everyone.
Thank you, Chair Hany, for leading
this important conversation
on the select committee on our downtown recovery.
Uh, I'm very happy to be part of it.
Also, thank you for scheduling
it during the solar eclipse.
Otherwise, I'd be outside staring
at the sun at my own peril.
Um, and it's, uh, it's great to.
I mean, I think the mayor is here.
I mean, I think folks may have one on one working
relationships to have all four of you here.
It's incredibly valuable to us,
especially given the fact I think you represent,
um, the diversity of our downtowns,
how different they are,
but yet with the similar links
and issues that that they're facing in San Jose.
Uh, we've substantially recovered
to pre-pandemic levels.
But that's because our downtown is very
different where we didn't you know,
it's a much smaller given the size of our city.
And Silicon Valley is much more spread out.
And so we focus a lot on having
more residents move downtown.
But the question is, how do you sustain
that and how do you grow that?
Because we've also had issues,
like in our case, the Google project,
which is going to have to look very different
than what was proposed prior to the pandemic.
And I think there's a lot of notes
that could be exchanged,
particularly with Sacramento.
What's happening at the railyard?
There's great opportunity to figure out
how we face these kind of dilemmas, um,
and exchange notes so that we can really, um,
build in a way together that that makes sense.
And I it's not a coincidence that
all of you brought up housing,
uh, and the importance of housing in our downtowns.
And I do agree, as it applies to the tax increment
in terms of if we can focus it on housing,
even if it's a narrow focus, affordability ratios,
what have you.
Uh, redevelopment was incredibly,
an incredibly useful tool that when it went away,
really stunted, especially big cities
ability to build housing.
And so I'm glad to see there's some common sense,
common sentiment that we need to see what we
can do that might be a little different,
but bring back that same vigor
and resources to build that housing.
And I think the conversion problem
also is one that, um, you know,
we need to be part of the solution
from the state level if there's,
um, certain legislation that can
help facilitate some of that,
because it is a huge opportunity
as it is a challenge as we're
seeing more vacant office spaces,
vacant retail spaces,
and we know that there's
an opportunity to bring people
into our downtown and have those
mixed use communities.
Um, you know, it's great to hear
our mayors really trying
to figure out that very difficult challenge.
And we want to not be an obstacle,
but be a support and a help from the state level.
And, um, and seeing that through and as um,
Summer Reyes talked about,
you know, the streamlining, I mean,
it's streamlining can sometimes imply
that we're skipping steps,
but I think it's quite the opposite.
I think we want to get rid of obstacles when it
comes to building housing in our downtowns.
And and so to whatever extent we can do that,
while ensuring there's still local say,
and we're doing it in a way that's respectful
to historical assets and what have you.
Those are very difficult problems that you all
have to grapple with at the local level.
And but we want to, you know,
we want to be partners in helping you with that.
So I just want to express my gratitude because
I think this has been a really it's been
really helpful for me just to sit and absorb
everything that you've been saying.
Um, and I know that this is
the beginning of a much broader,
longer conversation that I look forward
to having with each one of you,
each one of you, as well as other mayors
from big cities around the state.
So thank you all so much.
>> Great.
Thank you for being here.
I liked the conversation a lot of
the things that I care about and,
uh, I, I it is true, I did escape the big cities.
I now live in a suburb.
But I realize, uh, the,
the suburbs built around what,
what's happened in Sacramento, for example.
And that happens with a lot of suburbs.
They're built around the urban core.
And I think we all benefit from seeing great,
uh, great downtowns of the larger cities.
Uh, I did live in San Jose for a while
and lived in Sacramento for a long time.
Um, but just two comments that
I think I'd love to see,
um, cities get involved more in.
I know a lot of you are doing great things, uh,
on housing and homelessness and things like that,
but, um, I'm the vice chair
of the housing committee.
And, um, two things that I've seen are
when it comes to the arena process,
it's very jurisdictional based.
I think it's it's flawed in that regard
because while my city, Rocklin,
I don't the entire time I was on the city
council never denied a single project,
but there might actually be some
incentives on a regional look.
And now I know Sacog sort of, you know,
our Cogs get the numbers and then they're
divvied up to the individual cities.
But I just think it's an interesting
thing because, you know.
While Rockland will build all
the housing or Roseville will
pro development housing will build,
uh, build housing.
Um, sometimes that's not actually what's
best for California's other goals,
for example, climate goals and transportation
and things like that.
And so it's been kind of a interesting
battle with the arena process.
But, uh, one other thought I had was.
I think I heard I came in late,
but several of you mentioned,
um, you know, streamlining and things like that.
I have a hard time getting from
some of the associations.
What exactly cities would support
in terms of streamlining?
Now, I know as a former city council member myself,
I never loved sitting up there.
You know, when we didn't have
control over something.
And neighbors are mad at you anyways, right?
Um, but it would be helpful if the associations or,
or even individually come up and say, hey, look,
this is what we would support because right
now I just get opposition letters,
you know, pretty much on everything
that streamlines.
And so I'm always open to your ideas.
Of course.
Uh, Mayor Steinberg looked like your, uh.
Well, I do think that it's important that,
um, the four of us here.
Yes, we're all members of the League
of Cities or Cal cities,
but we also lead a different organization,
which is the big city mayors.
And sometimes our points of view diverge.
And I'm not speaking on behalf
of any of my colleagues,
but I know for myself that while
local control has its place,
um, the big city mayors,
I think, tend more to want the state to weigh
in when it comes to establishing goals,
if not mandates, and to set
the policy even if it um.
Even if it somehow relaxes
the idea of local control.
Because we know the flip side of local
control is that it can stop progress,
it can halt more housing.
It can it can be a tool to say no to what is needed.
And so I, for one, have been on
both sides of this divide here.
And I think local control has its place.
But I think it sometimes is overrated.
And it is used sometimes to stop that
which is really needed and important.
So for me at least, I encourage you to, um,
to legislate in ways that help
us meet societal imperatives.
And, uh, and we differed some degree
from the League of Cities,
which is 500 plus cities.
We're 13 of the largest,
and we sometimes have different.
Different positions.
Yeah, well, thanks for that.
And I, uh, in fairness, we have 500 cities
and probably a thousand different opinions.
So it's a hard, uh, you know,
to get all that together,
having run trade associations myself.
And so I do understand that I've been
encouraging cities in my district to.
Hey, let's come together on some of these, uh,
ideas and solutions because I understand
the need for local control.
I mean, those are all great things, but also,
we can't just be saying no all
the time to everything.
So thanks for that.
I'm happy to obviously hear all of
your comments if you have any.
Well, I was just going to say, I mean, just with,
um, I'm the chair of the legislative
committee for the Southern California
Association of Governments.
So I know, um, Mayor Richardson was a former
president of that organization.
But one thing we can commit to for you is to develop
a bullet list of things that
constitute streamlining,
that if that's helpful for you,
we can we can put something
like that together for you.
I mean, we just did a big push
with you all a couple of weeks
ago on reap the regional early
action planning money,
I think is on the on the chopping block,
which we don't want to see happen,
uh, because it is all housing related.
But um, in terms of specifically streamlining,
I'm happy to have a conversation
with you about that and see what we can provide,
at least from Scag.
Thank you for that.
And I think as you've heard,
you've you've both given us some,
some hope and some things to think about.
And overall, we're just incredibly grateful for
your leadership and for your time today.
It is a very rare opportunity for
us to have four big city mayors.
And I think we've also demonstrated
here why this partnership
is so important between the legislature,
the state and our big city mayors.
I think, as you said, you all in your role,
uh, you have to get things done.
People expect you to get things done,
they expect you to move solutions.
And we want to be a part of that.
We want to be a partner on that.
Uh, we want to find where those
areas of opportunity are,
and we want to move on them,
because the more that our downtown struggle,
the more that our state struggles.
And it it has a bit of a cascading effect,
uh, when the retail pulls out,
when people have these perceptions of our downtown,
uh, when we have challenges with vacancies, uh,
that all sort of compounds itself
and gets worse and worse.
And so there's tremendous, uh,
urgency on us acting this year,
this week, every day.
Uh, and, you know, I heard a few things.
One is, you know, I've, I've said this
and I hope this committee can be a part of it.
We truly need a downtown recovery
plan for our state, uh,
that aligns all of the things that
we're talking about here.
Uh, if there are investments that need
to be made in infrastructure,
if there's flexibility that are required,
uh, if there are state resources,
I mean, a lot of this is,
is also goes back to where is
the responsibility that the state has
with resources or buildings or workforce
that we already have,
and how can we deploy those to be
supportive of these efforts?
Because, uh, if we invest in a more strategic,
comprehensive and coherent way in
our downtowns that will have,
uh, that will spread to the rest
of our state, uh, and so on,
so many things, whether it's the flexibility,
getting rid of the bureaucratic roadblocks,
the deep, uh, work that needs to be
done on safety and cleanliness,
the retail theft.
I also want to put a pin in.
And a lot of you said this just
how important hospitality,
tourism, restaurants,
all of that is and how that's going to be really
critical for the future of our downtown.
We have to think about our downtowns
more as 24 hours.
And and that's if you look at successful,
thriving downtowns around the world.
Uh, they're not only thinking about 9 to 5,
they're thinking about later, uh,
put in a little plug for a bill that
I have on extended weekend hours.
These are the kind of things that we're
going to need to be looking at,
and it all has to be part of a larger,
coherent plan where we're amplifying
the good in our downtown.
Um, we've we talked about a lot of things.
And, uh, there's we could go deeper
on any of these things.
Our next hearing is going to be
actually focused on workforce,
which we didn't go as, as deeply into.
But how is our workforce being impacted?
How do we make sure that they're taking advantage
of the opportunities that are there,
and we're supporting them through these transitions?
So so we'll look forward to partnership
on that as well.
Uh, but again, I just really am incredibly
grateful for your time.
You all are, uh, such busy, important people.
Uh, and we are going to be busy and important
together and how we respond to these
challenges that we face and to the big
city mayors and also to your chair,
uh, Mayor Gloria, who was very supportive
and I know wanted to be here today.
Uh, on on behalf of our committee.
Thank you.
All right.
We aren't quite done with our hearing yet,
but for folks who can stay,
we have uh uh uh, another, uh,
panel of experts here that we're really excited.
And thank you to everyone who
came up with our mayors.
And for the support of that you all brought,
we look forward very much to working
with you all closely.
Uh, moving forward, I want to
invite our next panel up, uh,
to go a bit deeper on some
of the specifics on the of
the challenges and opportunities for our downtowns.
And I know we have folks from the California
downtown associations who are
here who are going to stick around
and be a part of that conversation.
So I want to invite, uh, Austin Metoyer,
uh, and, uh,
the San Francisco chief economist,
Ted Egan, who are both here.
Welcome.
And I know a couple of the committee members
are coming back, but we have Mr.
Santiago here.
They're they're taking a bathroom break.
But, uh, we'll we'll we'll turn
it over to you to get started.
Thank you.
>> All right.
Thank you.
Um, good.
Well.
Good morning.
What we saw in the morning, uh,
honorable chair and members of the select committee.
My name is Austin Metoyer.
I'm the president of the downtown
Long Beach Alliance,
but also the president of the California
Downtown Association.
Uh, I want to thank you for the opportunity
to speak to you today.
Um, we commend the chair and your leadership
for spotlighting the need
to address the recovery of our
downtowns and to act urgently.
I also want to thank the members
of the big city mayors,
as well as, uh, Mayor Rex Richardson
from Long Beach,
who talked a lot about some of the things that we're
seeing on the ground floor in all of our downtowns.
The California Downtown Association is
a collection of business improvement
districts scattered throughout
California's urban cores.
Our members and their respective downtowns
represent the economic engines of
their cities and contribute to the overall
economic vitality of the state.
Some of our members are here in the audience today,
and you'll be hearing from them in public comment.
And our memberships reflect the rich tapestry
of downtown communities across our state,
from bustling urban cores like
San Francisco and San Diego to
the charming suburban districts of
Walnut Creek and San Luis Obispo,
and to vibrate downtowns inland cities
like Bakersfield and Riverside.
Our collective encompasses
a diverse array of landscapes,
economies, and cultures,
and these urban centers our members serve as
the beating hearts of their respective cities.
They drive economic growth,
fostering cultural vibrancy,
nurturing vibrant communities.
And while each downtown district boasts its
own unique character and challenges,
we share a common commitment to create inclusive,
dynamic spaces that enrich the lives of residents,
visitors and businesses alike.
Our members are pivotal, play a pivotal
role in maintaining the vitality
of our downtown through comprehensive,
clean and safe programs.
This ensures our streets
and sidewalks remain inviting
and well maintained for residents,
visitors and businesses.
Moreover, our organizations take
a proactive approach to marketing
and promoting downtowns as vibrant places to live,
work, and play, and we energize our districts
by organizing diverse events and activities,
including music festivals, movies and concerts
in the park, farmers markets,
cultural celebrations such as Dia Dia de Los
Muertos and Saint Patrick's Day parades.
These events provide opportunities
for community engagement
and cultural enrichment and stimulate
our active economy.
As the big city mayors had mentioned before.
Since the start of the pandemic and the easing
of pandemic and Covid era restrictions,
our downtown ecosystems have been grappling
with profound disruptions.
Whether it be the disruption of
remote work and hybrid work,
whether it be the challenges
we face with public safety,
real and perceived,
and whether it be the issues regarding
an uptick in vacant
storefronts and the slowdown
in development projects.
While some of our districts are undergoing
a transition towards a more residential
focused model aiming to cultivate
a 15 minute city experience,
we acknowledge that this long terme vision
will not immediately alleviate pressures.
Pressures challenging us today to achieve
a complete recovery is imperative that we
adopt policies capable of addressing both
the immediate and long terme solutions.
With that in mind, we'd ask you
guys to consider a flexible set
of tools today that can instill
substantial predictability
and long tum recovery while
modeling the unique needs
of every downtown across the across California.
And as the big, big city mayors had mentioned,
some of these solutions could be anywhere
from addressing the narrative regarding
public safety and retail death.
We do want to thank Speaker Reeves,
as well as the Assembly member zebra,
for their leadership on the packages
of retail theft focused bills.
We'd also suggest looking at leveraging state assets
in our downtowns for new opportunities,
thinking about educational institutions
between the UC,
CSU, and the community college system,
there is an opportunity to look at how we
ease opportunities for those entities
to have academic spaces in downtowns
or residential spaces in downtown.
We'd also look at empowering local governments
to work with their bid counterparts
in their various cities in downtowns,
to ease regulations on activations.
Senator Scott Wiener's bill, SB 969,
is a really great start in looking at how
we can use entertainment zones to activate
a variety of different downtowns.
And then we'd also look at
how we can bring back, uh,
investment tools or reinvestment tools that help to,
uh, uh, guide development in our downtowns.
This can be anywhere from, as was mentioned earlier,
uh, Riedel of 2.0 or tax increment financing.
Or it could be tools such as payment
in lieu of a tax program.
We believe these tools will be important in helping
to address our downtowns and their recovery.
Downtowns have proven themselves
to be resilient and adaptable.
However, California's downtowns
may be at a tipping point
without urgency and intervention to meet the moment.
We are hopeful, and we believe in our downtowns
and our abilities to recover,
and we look forward to partnering with
the Assembly on these efforts.
Thank you.
Mr.
Egan.
>> Good morning, Chair Haney and committee members.
My name is Ted Egan, and I'm the chief economist
of the city and County of San Francisco.
Our city, as you know, has experienced some
major economic changes since the pandemic.
And most of these changes are concentrated
in our downtown area.
San Francisco's well known changes
are emblematic of what's
happening to downtowns today,
but we are by no means alone.
Across California and around the country,
profound changes in how we work,
where we live, and how we commute have occurred.
And the downtowns of our largest cities
are at the center of these changes.
Downtowns are often described as city neighborhoods,
but they have special
characteristics that most other
city neighborhoods don't have.
Foremost among these are their
transportation infrastructure,
which provides accessibility to the wider region,
and tall buildings that allow for a mix of economic
activities in a relatively small space.
These are the primary reasons why California's
downtowns have historically
been primarily employment centers
and with more employees than residents.
And these characteristics also reflect
the enduring economic value of downtowns.
The value of concentrating a large and diverse group
of people from a wide area in a concentrated space.
This value is manifested in many ways.
A large, accessible downtown hospital, for example,
can provide specialized care for many people.
A downtown arts or entertainment district
provides a variety of things to do,
and the large customer base needed to
support that variety of businesses.
And the office of a Central Business District
allows businesses to assemble a large,
multi-skilled workforce from across
the metropolitan area,
and that makes those businesses more productive.
The downtown economies of California's
largest cities are diverse.
Some, like downtown San Diego and Long Beach,
rely heavily on tourism along
with some advanced services.
Sacramento, Fresno, and Oakland specialize
in health care, government, and education.
San Jose and San Francisco have tech employment,
among other things.
While the largest downtown of Los
Angeles has a bit of everything.
But prior to the pandemic, the central office
function of downtown's likely generated
the most economic value in most of
the largest downtowns in the state.
Knowledge based services like professional
and financial services,
information and government generated
54% of the state's GDP in 2023.
While these activities are not exclusively
found in downtowns,
they are disproportionately there because of
the physical characteristics of those areas.
Since the pandemic, however,
as we know, this has changed.
While the rest of the economy has
more or less returned to normal,
office attendance remains stubbornly below
where it was before the pandemic.
Working from home 2 or 3 days per week
has become the norm for many,
and this has had several negative repercussions
on downtowns in their cities.
First, the absence of downtown commuters
has harmed downtown businesses
that rely on them for customers,
whether it's lunch places,
retailers or the restaurants,
bars and arts and entertainment
venues that rely on the after work crowd.
Second office vacancies have risen
in downtowns across the state,
particularly in cities that rely heavily on
industries that have adopted remote work,
as Mayor Breed said about San Francisco.
Third, local government budgets have
been threatened by remote work.
Office property values which
affect property taxes are
declining across the country because of remote work.
Cities like San Francisco,
along with Los Angeles and Oakland,
also rely on business tax revenues,
and these have also been weakened
when office workers
are not physically present in the city to work.
Transit ridership, especially to downtown,
is well down below pre-pandemic levels,
and this is also creating financial
challenges for these agencies.
Fourth and I have two more to go.
Business.
Tourism is a major market for
the leisure and hospitality business
that are concentrated in downtown in San Francisco.
This business, Transit Tourism,
made up one third of all tourism
before the pandemic,
and this has been heavily curtailed
by the rise of zoom and the other
remote work technologies that
have to at least some extent,
replaced in-person business meetings,
at least for the moment.
And fifth, remote work has affected
the housing market,
at least in the short terme,
without the need to commute to a downtown
office five days a week.
Housing demand in and around
our downtowns has declined
in each of the seven largest downtowns,
the percentage of employees who live more than 50
miles away has increased since the pandemic.
In each of the large,
largest six cities of California, downtown,
housing prices since the pandemic have been
weaker than in the rest of the city.
And before the pandemic,
downtown housing led the market
in many areas in California and across the country.
So just to conclude,
economic shocks of these magnitude,
where you have a major change in where people work,
and this affects the entire fabric
of the city's economy,
centralized and downtown.
This will obviously prompt a major restructuring
of city economies in San Francisco,
where 75% of our GDP comes from these
advanced service industries,
and office attendance is less than 50% of normal.
It is likely that we have not faced an economic
challenge like this since the 1950s,
which led to things like Bart, for example.
Cities will be challenged to develop strategies that
bring back downtown's diverse job opportunities,
find new uses for underutilized space,
restore that sense of vibrancy,
and stabilize the tax base.
Downtowns have been unique focal points for
the innovation and culture that defines California,
and with the right attention and investment,
they can once again serve that role.
Thank you for for those, uh.
I think for for when our mayor is here.
It's their job to be hopeful
and optimistic and forward thinking.
And I'm also glad that we have this
opportunity to to be realistic
as well and to look in a sobering
way at what we're facing,
because for the for you all and for the folks
that you represent and what you're seeing,
I think we do have some very real challenges.
I, I, uh, one of the things that that, that,
that I wonder if you might,
uh, illuminate a bit more,
you know, we're seeing, uh, one very high office
vacancies which seem to continue to climb.
They're not going in the other direction.
Uh, we're seeing higher retail vacancies.
So those are those seem, at least in San Francisco,
those seem seem to be growing.
Um, and that's leading to a reduction in,
uh, in our, in our tax base.
It's leading to less people coming,
uh, down downtown in general.
Uh, you're also brought to,
to light that we're seeing less,
uh, demand for housing downtown,
which, you know, I know a lot of us
are talking about the, the, uh,
the the opportunities of building more housing
or converting more housing, although I think,
again, in a in a more sobering way,
that's going to take some amount
of time at its best.
It's going to be a few years,
and we still have a lot of barriers to that.
And we are, as you said, actually seeing.
Are some of the the the lessening of demand?
Is there anything from a numbers perspective
that is moving in the right direction,
or that sort of shows us maybe a hopeful something
we want to kind of grab on to and,
and and move with or or right now are,
are we on all of those fronts really seeing um,
uh, the numbers move in the wrong direction.
And do you see any hope for hopeful signs around
that either slowing or reversing or,
or some signs of, of some something
positive that's happening?
So I hope we're not seeing it as the two
Debbie Downers here for for this one.
Uh, but no, I think there are
certainly very hopeful signs.
Right.
I know we talked a little bit
about residential housing,
but I think that is still a strong point.
It's just the type of housing that's
being sought out by folks.
Um, for example, in downtown Long Beach,
our residential occupancy is around 92, 93%.
Right.
It's pretty strong, um,
where people are choosing to
live and what size of unit
and the type of folks that are looking
for downtown is, is changing a bit.
Um, the other piece, I would say,
and I think it was mentioned a little earlier,
was, um, you know,
Monday through Friday, daytime hours may be tough,
but the nighttime and the weekend
economy is really strong.
Um, when we look at pedestrian foot traffic counts,
those numbers are up,
particularly, uh, nearing pre-pandemic levels.
When we think about weekends and nights,
um, there are a lot of activities,
um, made for residents to come out.
Right.
It's just the daytime foot traffic is different.
Um, so I think those are two strong areas.
And anything that we look from a policy side is,
is how do we leverage, uh,
those numbers and those people?
Uh, Chair Haney, I like to strike a balance between
being the too optimistic and too pessimistic.
And frankly, most of the time I'm being asked,
are you in a doom loop?
And is your city cursed forever?
And I.
And then I'm the optimistic one.
But but today, maybe I'm more realistic.
Um, I do think just to speak about San Francisco,
which I think is the hardest
hit downtown in the state,
uh, there are a couple of clear signs of progress.
Our population grew again in 2023.
Uh, and we're seeing early signs of
a recovery in apartment rents.
And there are people, analysts of the apartment
market in the city who whose word I trust
are expecting to see rent growth for the first
time since the pandemic in San Francisco.
So that's a sign that we may be hitting a bottom,
at least in rental housing.
I think you alluded to the office vacancy.
Folks in the office broker world are telling
me that it isn't going to get much worse.
Uh, Mayor Breed alluded to rising tenant demand.
Um, we are seeing office buildings
start to sell again,
and they're selling at an extreme discount,
50% to 75% off those buildings when
they come back to the market.
And all of them, by the way, do want to reenter
the office market and find office tenants.
They're going to be significantly cheaper.
And I think one of the things
we haven't seen in downtowns,
at least in downtown San Francisco yet,
that's given it this sort of frozen
in time character is we
still have the third highest
office rents in the country,
and there are people who are still
operating in a in an old,
normal kind of mentality about what's
the value of that office space.
That's that will change.
So I expect office vacancies may peak at
the end of this year, early next year.
The bigger issue is how long is it going
to take to use up that space.
Um, you alluded to the housing question.
I don't really think there's
a huge controversy here.
I mean, there is an awful lot of vacant space.
And when people talk about promoting office
to residential conversion in San Francisco,
they're talking about maybe 10% of the office space,
and we have more than 35% vacant.
So even if you're successful at getting all that
done and lower rents, you know, create some,
um, demand for some of the extra space,
they're still going to be a lot of vacant space.
And that's actually one of the reasons, at least.
Again, from a San Francisco point of view,
we need to kind of think big.
We may need to think about demolishing
office buildings,
for example, that aren't convertible,
don't have any value,
could be used for something else.
Um, I also think that, you know,
when I alluded to the 75 years,
that was when San Francisco's
economic role as a food
processing center as a port was starting to wane,
and offices in downtown and,
and conventions were seen as the future.
We may need to think big,
not just about what to do with the buildings, but.
But what's our economy?
Uh, I don't want to go too hasty
down that road, though,
because we are the AI capital of the world.
We do have a lot of tech.
The Bay area tech scene seems to be thriving.
Uh, we just don't know how much
office space they will take.
And that's that's sort of the big thing
that's holding us up at the moment.
>> Thanks.
I wanted to chime in with kind of
a different sort of approach.
Right.
Because, you know, we've gone through
regulatory financials,
all kinds of stuff.
As a guy who lived in downtown
Los Angeles for a little bit.
Let me let me challenge you to
challenge us a little bit,
because sometimes when we think
about converting to housing,
uh, downtown centers, you kind of have to talk about
converting a different space for different people.
Uh, but it's also limiting because who moves
in and you kind of touched on it.
I've always been kind of really
interested in this area.
Right.
Because when you think about
moving in people downtown,
it doesn't have kind of an amenities
that most of the places do have.
So even if you convert into housing,
you're still going to lack the schools,
you're still going to lack some of the hubs
or things that people need, parks, etc..
And when I lived in in downtown,
one of the big challenges that we
had is there wasn't any any green
space for good reasons, right?
Because it was built up.
And these are things that happen afterwards.
So there are reasons you can explain.
But if you're having a small family,
then the other challenge you had
was there was no schools.
The other challenge you had was, um,
it was difficult to get around
because parking is expensive.
Uh, the other challenge we had is even
the buildings that were built
in those times didn't have a place
where a kid can run around.
And so there was like a number of challenges.
And, you know, I was kind of thinking
about that when you said, you know,
tear down and build back up because sometimes it's
those things that people don't think about.
If you're going to talk about a post-pandemic
downtown kind of regrowth.
>> Um.
You have to take into consideration
that if you're in and you have
that if you're going to build in
downtown and build housing,
there are a lot of other things
that will need to happen
to incentivize people to to move into these units,
not just the issue of building housing.
And I wonder if you can speak to
some of that because you've
touched on it a couple of things a couple times.
Sorry.
Yeah, I'll just speak briefly to that.
I mean, I think you make an excellent point,
Assembly member.
Um, we don't normally think of the provision
of housing as being only providing housing
and not doing a more comprehensive approach to
planning that looks at all the other public.
But the conversations that we
have in the legislature,
the the conversations that policymakers have,
are limited to let's just build
housing and people will come.
Well, that just doesn't happen.
Um, I as I understand it, you know,
the conversation about downtown
housing and in particular office
to housing conversions,
downtown is sort of in the spirit of what Mayor
Steinberg was talking about earlier.
Um, we want to create a dynamism downtown.
And it's the, you know,
the young staffers in the Assembly
and the nightlife opportunities
and the housing that we've built,
and those things kind of work together.
I don't think anyone is saying that
they work together for everyone.
They're not providing housing that
families need, for example,
but they are a way to reengage a space that
maybe had lost its previous function.
And I think it's important not to confuse those
two things in the housing conversation.
Thank uh, thank you, chair.
And thank you both for your insights.
And, you know, one of the things that you,
um, mentioned,
Ted, in terms of the economy is doing well,
the tech sector is doing well just
to give a Bay area as an example.
Um, but people are tending to work more from home.
And so the question is certainly,
can we build more housing so they can be working in,
in the urban environment, but also to get people
out even if they're living in the suburbs?
Um, to Senator Patterson's point,
they might be living in the suburbs,
but around an urban area.
How do you get them out of their home and have
a downtown experience open up their wallets,
quite frankly, to help our downtown businesses.
And so it's it's kind of what
they I guess the contemporary
way of saying is that third place,
right, the first and second place are merging
more and more for many people.
We need to get them out,
out of their home and into that third place,
which ideally it would be in our downtown cores.
And so I think about entertainment zones,
certainly, but it's beyond that.
It's like gathering places,
you know, gathering zones,
placemaking, bringing families out,
giving people a reason to leave their
home or leave their suburban
enclave and with their strip malls
or wherever else they're going.
And in fact, quite frankly, being in Silicon Valley,
we're seeing a lot of the smaller
cities are creating
their own entertainment zones that are competing.
That may be a lot smaller, but they're
competing with the downtowns.
And so you need to have something bigger
and better to bring people out
of their kind of suburban business
districts into the downtowns.
And so that, you know,
you're sparking that kind of those
thoughts with me and also with, um, um, Austin,
you mentioned the 15 minute experience,
which I and there's a lot of folks that
are watching through streaming.
A lot of the staffers and others that
are going to help us develop policy.
For those that may not know,
can you describe what you mean when
you say 15 minute experience?
Certainly, Assemblymember.
So what I mean is, uh, within a 15 minute radius,
uh, walking radius,
your residents have all
the amenities they would need,
so they have access to transportation,
they have access to groceries,
they have access to employment,
they have access to green space
and recreational space.
It's the ability for.
And I like to say, regardless of the age,
whether you're a baby or a senior,
you could live in downtown in a 15 minute experience
and be able to get all your necessities
rather than having to get into a car and drive
20 or 30 minutes away to your grocery store,
or drive to a target or what have you,
that's what we're talking about.
Um, and then, if you don't mind,
I just like to to add on the placemaking front,
I think that's where the, the business
improvement districts,
all of our organizations throughout
downtowns have had
a very unique experience on creating these third
spaces through whether it's event activations
or it is actual placemaking,
public space activation.
Right.
Um, I think the way we've thought
about downtowns and the events
we cater to that population was,
um, the working population.
But if we're trying to get folks who are
now working from home in suburban areas,
we have to think about what is an experience
for a full family, right?
What movies in the park, what picnics in the park,
what activities can we create?
And then where are those central hubs that people
know about to go to to experience that?
So I agree with your point.
Thank you.
>> Uh.
Thank you for for those comments.
And one thing I'll just maybe ask uh,
uh, to to to close and maybe,
Ted, this is a question similar to
the doom loop one you get a lot.
But, um, you know, one of the things that I've,
since we've started this effort and,
and generally a question that I've,
that I've been asked and that others
have been asking, uh, is,
uh, what, uh, what is making
California unique in this?
It's it seems that our downtowns
are struggling more in recovery.
Uh, and one is that sort of your
your your sense, uh, uh,
not only as compared to some other
places throughout the country,
but if you travel to a lot of parts of the world,
they're they look like they don't have any
of the challenges that we're having.
If there's their office buildings are full,
there's people everywhere downtown.
And, uh, so with this question both is,
is California truly unique in this?
And then how do we learn from the experiences
of other places as well?
Do the California downtown associations
have dialogue regularly with,
uh, cities from across the country?
And are we looking at best practices from
around the country and around the world?
Obviously, cities exist everywhere.
And, uh, as much as we can learn from some of
the things that our mayors are doing, uh,
what can we do to learn from what
is happening at the many,
many cities all over the country and the world?
And how are we in dialogue with
them about how to face
some of the challenges that we're experiencing?
Uh, I would just say a couple of
things about what's special
about or particular about California
in this experience.
One thing I would say is that work from home
seems to be a very American phenomenon.
You just don't see office workers in Europe
and Asia working at home the same
way they do in the United States,
and even within the United States.
It seems to be broken out, I would say industry
by industry and also by region.
So California has a lot of tech.
Tech workers have a lot of power
in the workforce and workers,
office workers like working from home.
It's also kind of a a little bit
of a libertarian culture in
the industry where if I get my work done,
what's it to you?
Where I work and all that feeds into it?
The other thing I would say about California
we can't forget is we had a good economic,
a good public health success
with how we handled Covid.
And part of that was shutdowns.
I mean, San Francisco, for example,
had the lowest Covid death rate of
any city in the United States.
We had in the Bay area in particular,
and across the state,
very strong public health restrictions
that I think people
understood at the time put a burden on businesses.
And that's part of the slow recovery,
because it's mainly the leisure hospitality
businesses concentrated in downtown
that had the biggest shutdown.
And we saw that in San Francisco.
We had 70% of the workforce laid off.
Many of those folks moved out of the city.
Many of them moved out of the Bay area,
and that's contributing to the slow recovery there.
So the one thing I'll add from,
from Kda's perspective is that we
do work very closely with our counterparts
across the country,
with the International Downtown Association,
to understand, you know,
what are the challenges and issues
that they are facing.
And I would say that the themes are very
similar to what we discussed today.
The only thing I would say is different
is that the depth of those themes
is much higher in California than
it is in some other states,
to what Ted has spoken to,
because of the way that we
went about certain issues.
So, um, we are looking at best practices.
We are looking at how we can bring
those ideas into California.
Um, but we're not entirely unique.
Um, but we do have some challenges that we
have to address that other states don't.
Well, thank you again to both of you.
And I hope that whenever you find those
best practices and solutions,
we share them with this committee,
because I know we stand ready
to partner with you all and,
uh, want to look both at what mayors are doing,
downtowns are doing,
but also what states are doing to help with this.
I think that that, uh,
as much as I've looked at this,
we don't have all the answers here.
And and we do have some in some
ways a greater challenges.
And so what can we do to to draw on best practices
around the country and around the world?
Thank you so much.
It's great to see you both and I look
forward to working with you.
Thank you.
All right.
Um, so if there is anyone in the room
who wants to give public comment,
you can come up to the mic.
Uh, if you'd state your name, your organization,
and your brief statement on the issue.
Uh, and we're grateful for you
all being here and for,
uh, for spending the time with us here this morning.
>> All right.
Good morning, Chair Haney.
I would say members of the committee.
Uh, but I'm sure they're listening.
Michael Holt, executive director
of the Downtown Partnership.
Uh, excited about not only
the work of the committee,
but the opportunity,
I think, for downtown's really
to express our challenges.
We have been, as a capital city
over reliant on office workers,
no city outside of Washington,
D.C., as impacted by work from home as much as us.
But a couple things just really quickly
that haven't been identified.
We think housing will help lead some of this,
and housing at all levels we think is a priority.
Now's the time for us to be creative,
but we also think there's a real opportunity
for universities and college
housing in downtown as we look for adaptive reuse,
now is the time for big ideas creative solutions.
I loved what Austin said in talking about
ways for us to think differently.
We need to reinvent ourselves and we
look forward to partnering with you.
Thank you.
>> Mr.
Chair, Alex Torres with Brownstein,
I'm here on behalf of two clients,
first and foremost for the Bay Area Council.
Really appreciate you convening this hearing today.
We work at the intersection of
all the issues discussed.
I think the multiple mayors called out how
interrelated so many of these issues are,
or how many different issues are encompassed when
we talk about some of the downtown challenges.
So look forward to being a resource
and working with you further on that.
Also, on behalf of the National Independent
Venue Association of California,
we represent over 500 independently
owned music venues
and festival promoters in the state of California.
Really excited to hear all
the discussion on how nightlife
music invigorates and creates vibrant communities.
Excited to work with the legislature
on how we can really
develop good policy at the state
level to encourage that.
You may recall we created a venue liquor
license a year a couple of years ago.
We've worked with Senator Wiener on
the great work on entertainment zones.
Bay Area Council was also proud
to sponsor that bill,
but really appreciate the conversation around
what we can do to uplift independent venues,
festivals and bring that vibrancy
back to our community.
So look forward to being a resource
to the committee on that as well.
Thank you.
>> Mr.
Chair Andrés Ramirez,
on behalf of the Salesforce Transit
Center and Transbay Joint Powers Authority.
Um, I'm aware you are aware of our project
and the Downtown Rail Extension Portal project,
so I will keep my comments a little bit more brief.
Um, but just really want to
emphasize that we feel this
conversation on overall downtown
recovery cannot happen
without the consideration of transit
infrastructure supporting
transit and transit oriented development.
Because, as you know, the Salesforce Transit Center.
Um, has affordable housing built in
and part of the overall transit program.
Um, a couple of things.
We just want to iterate.
Um, phase two of our project, the portal project,
is estimated to create 80,000 jobs.
These are jobs for working families
largely coming from East Bay,
San Joaquin Valley folks coming in.
So that really helps spur that
overall economic development.
And again, we just feel very strongly
that the continuing to build
out transit infrastructure is
a key part of this conversation.
So we hope to be thought partners with yourself
and the other members of the legislature
and this committee and the administration
as your great work continues.
Thank you.
>> Honourable Assembly members.
My name is Andrew Thomas.
I'm the CEO of Downtown Santa Monica, Inc.
We are the business improvement
district for our city.
Taxes generated in downtown Santa
Monica are responsible
for approximately 25% of our city's budget.
Over the last five years,
we've seen our tax contributions drop,
our pedestrian counts cut in half,
and commercial and office office vacancy rates rise,
all while residents struggle to
afford to live in our downtown.
We need creative solutions to address public safety,
chronic vacancy and economic insecurity
on behalf of the thousands
of businesses that call downtown Santa Monica home,
I thank you for focusing on our issues,
and I hope that Santa Monica can be of assistance
to you as you seek legislative solutions.
Thank you.
>> Um, Mr.
Chairman, I'm John Keener, CEO of
Downtown Berkeley Association.
I want to flag two issues that I don't
think have been raised so far.
Our arts organizations are really,
really struggling with large deficits.
The audiences are slow to return
and their costs are really high,
including the gig worker laws.
And they're the life cultural
lifeblood of our communities.
We need to have them survive,
drawing people to the downtown,
so let's not forget about them.
The other thing is we have added 1500 housing units.
We have 2000 more in the pipeline.
More housing with the young people does
not necessarily equate to activation.
What we're seeing is a lot of these young
people are cocooning in their apartments,
online internet sales,
Amazon food delivery services.
We need the downtown's welcoming.
We need to deal with the crime issues.
We need to deal with the homelessness.
We need to deal with the severe
mental illness issues,
and we need to activate,
like with Senator Wiener's bill
to make downtowns attractive,
to get people out of their apartments
onto the streets,
shopping and activating our downtowns.
Thank you.
>> Thank you.
Chair.
I'm Devin Strecker, executive director for
the River district right here in Sacramento.
We have a unique opportunity as
we're an emerging neighborhood.
We are formerly a industrial enclave,
kind of isolated from the rest of the central city.
But as we build out, we're adding a lot
of residential units to our district.
And we thank the state for the investment
in the Maley office complex,
which is opening later this summer.
But we definitely need help with,
as other people have mentioned,
the unhoused crisis that affects our neighborhood,
mental health, drug addiction.
These are all things that we see
playing out and preventing
people from wanting to come to our district.
So we appreciate any work that
you can do towards that
and especially investment in creating
entertainment venues,
creating public art infrastructure,
bike and pedestrian infrastructure
is what's going to turn our neighborhood around.
So thank you so much.
>> Good afternoon, Chair Haney
and our other Assembly members.
I'm extraordinarily excited to be here,
really mostly to share that behind me.
We have boots on the ground and individuals that are
really wanting to be a part of this fight with you.
Um, we are our downtowns.
We know what we need.
You asked a very important question earlier today,
and that was what's happening.
And why is it that our downtowns
and our state are suffering so much?
And I think there's one thing
that perhaps we haven't
talked about and that is clean and safe.
Um, you can't pass go without clean and safe.
We know that is a challenge for why
maybe even our arts institutions,
um, all of our industries.
Tourism is suffering in our communities.
Um, we need your help.
Our cities need your help.
Our cities need the resources that they have to stay
in the cities to help them address these issues,
but they also need more resources.
So when I think about clean
and safe economic development,
um, conversions,
housing, these issues, it's pretty straightforward.
There are these buckets we can get
this done if we act quickly.
And we are here.
Boots on the ground.
The kDa is represented here.
We want to be a partner with you
and look forward to this fight.
Thank you.
>> High chair.
Haney.
My name is Suzanne Hawley.
I am president and CEO of the DTLa Alliance.
I represent the largest central business
district in downtown Los Angeles.
And you want good news?
I'll tell you good news.
The residential story is a good news.
Uh, our residential occupancy stayed
strong throughout Covid.
It's still going strong.
Downtowns are communities,
and people want to come back.
There's something to be said for placemaking.
We've had activations and we do surveys
of the people that attended,
and they say that impacted their
reason for coming back downtown.
So I think there are creative things you can do.
Downtowns aren't lost.
Thank you so much for chairing this committee,
and thank you for including us
as part of this conversation.
Thank you all.
We'll close public comment.
And just again thank everyone who participated.
Thank you to all of the downtown
associations who are here,
who joined us to the big city mayors.
Uh, this first hearing was really
meant to be a level setting,
a broad overview of some of the
the challenges and opportunities
that we want to go into deeper and also to identify,
uh, the partnerships that,
that that need to be in place for
us to do this work together.
And I really am excited about all the folks who
came forward to this hearing, who participated,
and looking at how we can build on this,
how we can go deeper on many of the issues that, uh,
were brought forward,
whether it's clean and safe, whether it's,
uh, state infrastructure and resources,
tax incentives, flexibility, uh, to for conversions,
uh, tourism, hospitality, nightlife.
We've really, uh, heard it all here.
And we do intend to work on all of these
issues and also to elevate the
the urgency and the opportunities within
this building with our colleagues.
All 12 members of this committee will
be champions for our downtowns
and the work that we do here
and as partners with you all.
So I would like to say, uh, help is on the way.
Uh, and I just really appreciate all
of the work that everyone is doing,
from our downtown associations to our,
uh, to our small businesses and property owners,
labor unions, local elected officials.
Everyone is working on this every day.
And we need to have your back here at the state.
And that's what I hope that we
can do with this committee.
So we will keep everybody up updated.
We intend to have a few more hearings this year.
I want to do these as as often as possible.
Uh, and we're going to take them on the road.
So if there are, there are things
that you want to bring
us to focus on in your communities and your cities.
Uh, please do let me know.
And we're going to, uh,
not only look closely at these issues,
but develop really strong, uh,
policy solutions to them.
With that, uh, thank you so much, everyone.
This hearing is adjourned.