Assembly Select Committee on Select Committee on Downtown Recovery

This Select Committee was created so that the Legislature can develop and support policies that will directly help our struggling downtowns in 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 very well so we have representation from across our entire state.

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.

And so they all chose to come here early because of the importance of this 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. This Committee, as I said, was created to help. 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 a San Francisco representative, and I want to recognize my mayor, Mayor Breed, who is here. We know these challenges are impacting 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 due to the decline in commuters, residents, and visitors. However, this is not solely a San Francisco or Bay Area issue, although sometimes we become the target of much of this. 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 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 though we all have a responsibility, whether local elected officials or mayors, City Council Members, the state has a responsibility to--the state must lead in partnership with our cities; 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 and our downtowns are experiencing, but also the solutions that you all are leading on, the innovation that you're bringing forward to these challenges and the ways in which our state legislature and our state government can support that work and uplift that work to ensure that our downtowns recover strongly and hopefully even better than they were before the pandemic.

I want to introduce our first panel, but before that, I wanted a little bit of housekeeping. 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 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 30 seconds per person, and we are not accepting public comment over the phone today. But you can submit written testimony to the Committee at assemlymeber.haney@assembly.ca.gov, and the email is also on our website. With that, I want to welcome up our first panel, the big city mayors, as I mentioned, 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. 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.

Also, I want to say I'm very happy that we can have the mayors of Sacramento and San Francisco here, my two homes, and also proceeding potentially another playoff battle coming up between the kings and warriors that we can have some peacemaking here. 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, no stranger to this topic and to this building. 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 from the business community, the Downtown Partnership, the Metro Chamber, and the people who are working day and night to make sure that our downtown recovers and transitions to 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 re-imagine what our downtown could be about. Certainly we relied on that state worker 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 maybe it would have changed anyway. Because remote work, I think, is becoming 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 to come to work downtown. And yet it has had a dramatic impact on our downtown, in a negative way, in the short term.

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, 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 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 R Street, one of our new real, emerging and exciting commercial corridors in Sacramento. 30 years ago, we had a big debate about whether we should do mixed use on R 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. We're proud of our Kings. Go Kings. (Mayor Breed). We're proud of our Kings. We've got 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.

Were developing out our railyards, which is one of the largest undeveloped infill projects in the entire country with more entertainment, more sports, hospital, a state-funded $500 million courthouse. We're going to begin now. We now have the money to re-develop our waterfront. And so entertainment and sports 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, Sacramento has often been frustrated by the fact that with all the state assets here, there's no tax; our 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. Probably 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 music venues, or new destination and tourism venues, or a museum row we've talked about along the west end of Capitol Mall, where you can invest one time capital money in helping us deal with the loss 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 income, and/or other financing for housing, for housing, 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 re-imagine our downtown. Thank you.

Thank you, Mayor Steinberg. Mayor Breed.

Thank you, Assemblymember Haney 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. Just in San Francisco from my perspective, over the years, and looking at the history, 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. San Francisco has definitely had significant struggle as it relates to the challenges 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. In the past, San Francisco really didn't have to work hard to attract visitors, to attract downtown businesses. But clearly things have changed.

San Francisco is California's 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 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 46% of pre-pandemic levels as of March. That's really an improvement from January, when attendance was at 43%.

But we can no longer rely on five days a week and nine-to-five employment. Remote work has led to a historic office vacancy rate of over 36% in our downtown, which has led to a major drop in foot traffic. And the loss of foot traffic has really hurt our downtown restaurants and small businesses. 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 Chanel and Yves Saint Laurent, and a lot of those luxury brands. The city isn't what it used to be, but I am in the same boat as Mayor Steinberg in 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, 24/7 downtown and neighborhood. No longer nine-to-five financial district, but 24/7. 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 housing, and making it a lot easier.

The voters this past March passed a proposition that also 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 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 10 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 business tax reform and passed zoning reforms to allow for more flexibility downtown to invite new activities and attractions, especially in the art and culture industries. We've allocated $12 million over two years for new events, activities, outdoor concerts, holiday festivities. And I know Marisa 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 $20 million in grants to over 2,600 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 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 OpenAI. And so far, last year they leased a million square footage of space, and by 2030 they expect to lease over 12 million square foot of space in San Francisco. Overall demand for office tenants in the market grew to 6 million square feet 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. 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, 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 Haney and Assemblymember Ting, who all are carrying really important pieces of legislation to help revitalize our downtown, and I hope you all will explore those pieces of legislation and seriously consider supporting them. 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 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 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. 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 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. Mayor Richardson, welcome from City of Long Beach.

All right, well, thank you. Certainly thank you Chair Haney and your Committee for welcoming the big city mayors. I'm Rex Richardson, the mayor of the City of Long Beach. So we're the 7th largest city in California. 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. A little bit about our city. We're home to Long Beach State.

We're home to one of the fastest growing space clusters in America, SpaceBeach, where we're up to almost 5,000 space tech jobs that we're really proud of. We're here with our Downtown Long Beach Associates, so they're here with us today. 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 imported to our country comes through our combined seaports.

So we're a working community that places a big emphasis on downtown and tourism. 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. The global pandemic. We've seen 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 in new and more sustainable directions. Betting on things like SpaceBeach, 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 make sure that we are being smart and responsible through the process. 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.

And we're home to the nationally recognized Aquarium of the Pacific, our beautiful, iconic waterfront, the Queen Mary, which is back. The Queen Mary is open and in the black for the first time in more than a decade. We're placing a big focus on the future where we'll be developing a downtown waterfront amphitheater with 12,000 seats to open to the public and welcome people back to our downtown. We are opening up 1,000 more hotel rooms between now and 2028. We'll be hosting at least seven events for the LA 2028 Olympics.

And we're also including in that is a Hard Rock Hotel, which also helps with going back to our music roots as a city's culture. We have certainly experienced challenges with respect to our recovery, but we, you know, we're working hard on it. We have a plan, our Downtown Roadmap 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 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 figuring out how to serve people, get them in the house and 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 we need to boost our capacity significantly in order to meet the moment and meet this crisis.

I'll also say that, while our city has seen reductions in gun violence and reductions in homicides, aggravated assault has increased. Its direct correlation to some of the substance use challenges and mental health challenges we've seen in our communities is evident. 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. Next, enhancing community safety: Safety is incredibly important to us. We've seen vandalism, graffiti.

While we certainly seen instances of vandalism and graffiti, we certainly want to-sorry, I keep hearing a voice. 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 tools for our cities to be able to meet some of the challenges with retail theft and some of those challenges.

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, speed up housing production. We're getting housing approved in 60-90 days now, 100% affordable housing, and we're exploring every housing type.

We're the ADU per capita leader in California, and so we're doing the things we need to do. We are a California pro-housing jurisdiction. We're proud of that. And we're proud that the state has awarded us for a second time. The Encampment Resolution Funding (ERF) 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, the work on mental health is actually the responsibility of the county. And so, you'll have folks doing outreach representing two different jurisdictions with 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. 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 gonna return to the same levels of office space.

And no city has really solved the conversion problem of: how do you convert commercial space and office space to housing? But we want to do so. Folks want a window that opens in a lot of these buildings. The windows don't 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 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 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? And finally, we want to reposition our entertainment district to bring more sports, more music. We mentioned the live entertainment venue, the amphitheater.

Our 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 life on the lunchtime crowd like they used to. So we need more activations throughout the week to help support our restaurants, so we're taking those steps. What are some things that the state can do? I think it's important we can establish the vision.

We can set the big goals. But in order to achieve that vision, we need the state to to be a partner for us. I know it's difficult budget time, but, the HHAP 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 HHAP Funding in a budget. The Encampment Resolution; I can't say enough how important those resources have been for us.

Also, we're really proud the big city mayor supported Proposition 1, the mental health reform and the bond. We want to make sure that some of those resources come locally to cities where 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. For cities with our own health departments, fund local is our message.

And then lastly, 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 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. 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 has happened 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. One last thing.

I would just say I'm optimistic simply because we've seen big challenges the last few years. And many of us remember in 2020, the death of George Floyd, the murder of George Floyd. Our downtown was burning. We had thousands of people protesting in 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 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 that message, both of concrete things that we can do to help, and also of optimism. I know we all need that. I know it's been a consistent theme as well, and appreciate your leadership. Now for our last mayor, 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 my fellow big city mayor 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 with a quote from a book called "Our Towns" by James and Deborah Fallows.

I don't know if any of you are familiar with it, but in the final portion of the book, they list 10 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 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 10 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. 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, that's pretty cool. The teach and that library, 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, invested in telling our story.

Also through a series of statues on our main street, which we call our civil rights walk. These came up organically, 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 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 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, turned 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 state 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 two and a half percent lower than it was in the first quarter of 2020.

But despite that short-term performance underperformance, the longer-term picture shows downtown Riverside has added jobs as at a faster rate, over 25, well percent compared to the state, which is at 23%, and national, which is 16%. And downtown accounts for only 3.4% of our city's resident population, but contributes significantly to our tax base as well as our employment. It accounts for about 7.5% of the total employment in our city. We also have an active Chamber of Commerce and downtown partnership for businesses.

So all of these factors have helped us keep our vacancy rates Low, averaging about 4.6% over the past 10 years. So 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. 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 10. This is a concept that the project for public spaces have.

If anybody's seen this, no one building should have any less than 10 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 05:00, 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 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 I think the state can help make this process a little bit easier for developers through legislation or incentives. 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 Assemblymember Haney and everybody on the Committee for your time in 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 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 challenges that we have and some of the ways that we can support the work that's happening, you all have also 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 everyone in your regions who experience all that your downtowns have to 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 prosperous, strong downtowns. And I appreciate the optimism that you all 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 I'll open it up to my colleagues.

I appreciate the, some of the common themes, but also some of the unique things that each of you brought forward. Each of our downtowns throughout our state have some similar challenges, but also unique aspects, whether it's the port or tech and AI or 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 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 have highlighted some of the things that we need 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 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. We'll be coming down to Southern California.

We'll be coming around the state. So we take those invitations as well. And we'll 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, 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 my colleagues. I see Miss Wicks, who's here also Mayor Richardson, gave a shout out to some of your work around local journalism, which I didn't know that that one was going to come up today, but this is just showing the many things that we can do to support our downtowns. Miss Wicks

Thank you. Chair Haney, thank you for pulling together this conversation. I think it's really an exciting opportunity on how to use a Select Committee because the downtown question hits so many different issues thank you for that. And also just to the mayors, 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 really be an active part of the solution.

So you all are at the tip of the spear. You know, I'll just make a quick comment and then I actually do have to run to something else. But I think with great crisis is great opportunity and the ability for us to reimagine what our downtowns look like. And I went to the, the christening of the Bay Area Council's office where you spoke, mayor breed about with that same sort of sentiment.

Remember what happened after the earthquake and how we reimagined 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 create more vibrant communities downtown. And the way that I view a big part of that solution is housing. As you all know, more mixed use housing, more foot traffic, more integrated housing downtowns.

And so I just for you all, as a blanket to sort of comment, 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 some of us came from local government and, but are there opportunities? You made a comment about, about redevelopment and the loss of redevelopment and we hear that all the time. We did a housing tour, 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. Just 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. And thank you all for your leadership.

Thank you, Mister McCarty.

Thank you. And first of all, thank you, Matt, Assemblymember Haney, 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, 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 mayor, Mayor Steinberg, 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 we helped Fund the cheats program in the budget a couple years ago. So I'm 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, great and realities. And 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 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 tough go of it. We know that when there's a big event, a festival, they're doing great. Sometimes 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 talked about 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 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 projects are super hard. There's not always easy place to put in windows, as you said.

But we have started a project here that the EDD building, we'd selected developer to do, you know, between 501,000 units there of adaptive reuse. And that is very, very promising because if you look 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, it was our big swing for the fences that 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 thrived because people were living there. So on this housing thing, I concur with Assemblymember Wicks. This is, I think, one of our best strategies, and it's not easy. I know that it would be great to get back redevelopment 2.0. And we have, even during the budget surge last couple 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 some. Remember you proposed a measure a couple years ago about permitting and building standards for the private sector, adaptive reuse. So whether it's private buildings or state buildings, what things do you have? Us that we could change policies and laws to streamline it, reduce barriers. 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.

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 behavioral health and substance abuse crises. 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 wrap around 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 and 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 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. 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 towntowns there may be places for activation that helps the conversion of office space. Again, no one's figured it out.

If there's a way to incentivize it either through CEQA or other ways to incentivize conversion, we support that so we can develop local pilots to convert 1000, 20003, 000 units to bring more families and students into our downtown. So those are three policy suggestions that.

Just following on that, what made Richardson said the whole CEQA 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'll be very helpful. I'm an environment, I'm an ecologist and I think we need CEQA reform. It's been problematic, right? 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'll 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 important. And 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 address this as well. One of the things that I think when it comes to these conversions and flexibility and use is all of you represent downtowns that have some historic 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 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 imagnum building that is in Union Square. That is one of the most historical locations, Department stores in Union Square that is being converted to office housing, but will also have retail. It's an incredible way to provide mixed use for a 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, but for the ones that we've been able to identify so far, eight or nine 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.

I will say that the types of tools that are helpful are similar to what the other mayors have already stated around CEQA, and some temporary reforms to CEQA as it relates to downtown could be significantly impactful, as well as financing tools similar to what we used for the betrayal power plant station to develop this financing mechanism to get the project done faster.

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 material 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.

The last thing I want to just mention as it relates to additional tools that could be extremely helpful for us 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 law as it relates to providing people an opportunity to do vending on the streets of San Francisco. 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 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, challenges in order to revitalize our communities.

Thank you, Miss Reyes.

Thank you so much to chair Assemblymember Matt Haney for putting this together. And I loved hearing from the four of you because 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. I think it was my colleague assemblymember Wicks said, you have the hardest job.

You also have the best job because the community knows you and they know they can call on you. You are their direct conduit to everybody else. 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 performed Lead 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, the redevelopment. I know we say that 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. 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, the tax incentives. 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. The other thing was about the media.

I think Mayor Richardson talked about this, about local media and Mayor Breed, or maybe it was Mayor Lock Dawson talking about it being our own narrative. I'm tired of other people talking about how horrible our 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 done, 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, balancing accountability without opportunity. And I think Mayor Richardson, you talked about that. 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.

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'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 had two words that I don't remember now, but it has to do with finding a better way an easier way for you to achieve the vision.

You know better about your cities, 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 Museum of Chicano Art is world-renowned, the biggest collection of Chicano art. And I'm very proud, as my colleague, Assemblymember McCarty mentioned, the state helped with that seed money to get it started right. We recognize, of course, you had some great advocates here too, but we recognize how important that was. And now everybody is going there. 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. I just want to say how proud I am of what the four of you have provided.

And I think having you as advisors on some of what we want to put through to revitalize our, and to recover our downtowns, 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, Mayor Breed on the fencing. We know that's a big issue. I sit on a Select Committee on 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 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 Haney, for leading this important conversation on the Select Committee on our downtown recovery. 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. And it's great to, I mean, I think the mayor is here. 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 the diversity of our downtowns, how different they are, but yet, but the similar links and issues that they're facing. In San Jose, we've substantially recovered to pre pandemic levels. But that's because our downtown is very different where we didn't. 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.

And there's great opportunity to figure out how we face these kind of dilemmas and exchange notes so that we can really build in a way together that makes sense. And it's not a coincidence that all of you brought up housing 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.

Redevelopment was incredibly, an incredibly useful tool that when it went away, really stunted, especially big city's 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 we need to be part of the solution from the state level.

There's 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. 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 in seeing that through.

And as some of us talk about the streamlining, I mean, 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 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, 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.

And I know that this is the beginning of a much broader, longer conversation that I look forward to having with each one of 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 I escaped, it is true, I did escape. The big cities now live in a suburb, but I realize the suburbs built around 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 downtowns of the larger cities.

I did live in San Jose for a while and lived in Sacramento for a long time. But just two comments that I think I'd love to see cities get involved more in. I know a lot of you are doing great things on housing and homelessness and things like that, but I'm the Vice Chair of the Housing Committee and two things that I've seen are when it comes to the RHNA process, it's very jurisdictional base.

I think it's, it's flawed in that regard because while my city Rockland, 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 pro development housing will build, build housing, 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 an interesting battle with the arena process. But one other thought I had was I think I heard I came in late, but several of you mentioned 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 when we didn't have control over something. And neighbors are mad at you anyways. But it would be helpful if the associations or even individually come up and say, hey, look, this is what we would support because right now I just get opposition letters pretty much on everything that streamlines. And so I'm always open to your ideas, of course. Mayor Steinberg, look like you're-.

Well, I do think that it's important that the four of us here, yes, we're all Members of the League of Cities or calcites, 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, 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, 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 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 legislate in ways that help us meet societal imperatives. 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.

Thanks for that. And I, in fairness, we have 500 cities and probably 1000 different opinions, so it's hard 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 ideas and solutions because I understand the need for local control. 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, I'm the chair of the Legislative Committee for the Southern California Association of Governments. So I know Mayor Richardson was the 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 put something like that together for you. I mean, we just did a big push with you all a couple weeks ago on reap.

The regional early action planning money I think is on the chopping block, which we don't want to see happen because it is all housing-related. But in terms of specifically streamlined, 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 both given us 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 of the state and our big city mayors. I think, as you said, you all in your role, 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. 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 has a bit of a cascading effect when the retail pulls out, when people have these perceptions of our downtown, when we have challenges with vacancies, that all sort of compounds itself and gets worse and worse. And, and so there's tremendous urgency on us acting this year, this week, every day. And I heard a few things. One is, 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 that aligns all of the things that we're talking about here. If there are investments that need to be made in infrastructure, if there's flexibility that are required, if there are state resources, I mean, a lot of this 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 if we invest in a more strategic, comprehensive and coherent way in our downtowns, that will have, that will spread to the rest of our state and so on. So many things, whether it's the flexibility, getting rid of the bureaucratic roadblocks, the deep 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 that's if you look at successful, thriving downtowns around the world, they're not only thinking about 09:00 to 05:00 they're thinking about later. I'll put in a little plug for 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.

We talked about a lot of things and 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 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 we'll look forward to partnership on that as well. But again, I just really am incredibly grateful for your time.

You all are such busy, important people, and we are going to be busy and important together in how we respond to these challenges that we face and to the big city mayors and also to your Chair, Mayor Gloria, who is very supportive and I know wanted to be here today on behalf of our Committee. Thank you.

Thank you.

Thank you. All right. We aren't quite done with our hearing yet, but for folks who can stay, we have another panel of experts, experts here that were really excited. And thank you to everyone who came up with our mayors and for the support that you have brought. We look forward very much to working with you all closely. Moving forward, I want to invite our next panel up to go a bit deeper on some of the specifics 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 Austin Metoyer and 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 taking a bathroom break, but we'll turn it over to you to get started. Thank you.

All right, thank you. Good morning--while we still are in the morning--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. I want to thank you for the opportunity to speak to you today. We commend the Chair in 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 Mayor Rex's descent 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 vibrant downtowns inland cities like Bakersfield and Riverside. Our collective encompasses a diverse array of landscapes, economies, and cultures. In these urban centers, our members serve as the beating hearts of their respective cities.

They drive economic growth, fostering culture 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 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 Día de los Muertos and St. Patrick's Day parades. These events provide opportunities for community engagement and cultural enrichments 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-term vision will not immediately alleviate pressures challenging us today. To achieve a complete recovery, it is imperative that we adopt policies capable of addressing both the immediate and long-term solutions.

With that in mind, we would ask you guys to consider a flexible set of tools today that can instill substantial predictability and long-term recovery while modeling the unique needs of every downtown across California. And as the 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 Rivas as well as the Assembly Member Zbur 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 and 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 variety of different downtowns, and then we'd also look at how we can bring back investment tools or reinvestment tools that help to guide development in our downtowns. This can be anywhere from, as was mentioned earlier, Redevelopment 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 downtowns 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 percent 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 two or three days per week has become the norm for many, and this has had several negative repercussions on downtowns and 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-term. 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 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 in downtown--this will obviously prompt a major restructuring of city economies. In San Francisco, where 75 percent of our GDP comes from these advanced service industries and office attendance is less than 50 percent 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 those. I think for when our Mayor's here, it's their job to be hopeful and optimistic and forward-thinking, and I'm also glad that we have this opportunity to be realistic as well and to look in a sobering way at what we're facing because for you all and for the folks that you represent and what you're seeing, I think we do have some very real challenges.

One of the things that I wonder if you might illuminate a bit more, we're seeing, one, very high office vacancies, which seem to continue to climb. They're not going in the other direction. We're seeing higher retail vacancies, so those seem--at least in San Francisco--those seem to be growing, and that's leading to a reduction in our tax base. It's leading to less people coming downtown in general.

You're also brought to light that we're seeing less demand for housing downtown, which I know a lot of us are talking about the opportunities of building more housing or converting more housing, although I think, again, 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 some of 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 onto and move with, or right now, are we on all of those fronts really seeing the numbers move in the wrong direction, and do you see any hopeful signs around that either slowing or reversing or some signs of something positive that's happening?

So I hope we're not seen as the two Debbie Downers here for this one. 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. For example, in Downtown Long Beach, our residential occupancy is around 92, 93 percent, right?

It's pretty strong. Where people are choosing to live and what size of unit and the type of folks that are looking for downtown is changing a bit. The other piece, I would say, and I think it was mentioned a little earlier, was Monday through Friday daytime hours may be tough, but the nighttime and the weekend economy is really strong. When we look at pedestrian foot traffic counts, those numbers are up, particularly nearing pre-pandemic levels when we think about weekends and nights.

There are a lot of activities made for residents to come out, right? It's just the daytime foot traffic is different. So I think those are two strong areas, and anything that we look from a policy side is how do we leverage those numbers and those people?

Chair Haney, I like to strike a balance between being the too optimistic and too pessimistic, and frankly, most of the times I'm being asked, 'are you in a doom loop?' and 'is your city cursed forever?' and then I'm the optimistic one, but today maybe I'm more realistic. I do think--just to speak about San Francisco, which I think is the hardest hit downtown in the state--there are a couple of clear signs of progress.

Our population grew again in 2023, and we're seeing early signs of a recovery in apartment rents, and there are people, analysts of the apartment market in the city whose word I trust, are expecting to see rent growth for the first time since the pandemic in San Francisco. So that's 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-broken world are telling me that it isn't going to get much worse.

Mayor Breed alluded to rising tenant demand. We are seeing office buildings start to sell again, and they're selling at an extreme discount, 50 percent to 75 percent 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 an old normal kind of mentality about what's the value of that office space. 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? 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 ten percent of the office space, and we have more than 35 percent vacant.

So even if you're successful at getting all that done and lower rents create some demand for some of the extra space, there's 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.

I also think that 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 conventions were seen as the future. We may need to think big, not just about what to do with the buildings, but what's our economy. 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. We just don't know how much office space they will take. And 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 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 challenge you to challenge us a little bit, because sometimes when we think about converting to housing downtown centers, you kind of have to talk about converting a different space for different people, 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 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, et cetera.

And when I lived in downtown, one of the big challenges that we had is there wasn't any green space, for good reasons 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 it was difficult to get around because parking is expensive.

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, you have to take into consideration that if you and I--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 move into these units, not just the issue of building housing. And I wonder if you could 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. 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 services.

Right, but the conversations that we have in the Legislature, the conversations that policymakers have are limited to, 'let's just build housing and people will come.' Well, that just doesn't happen.

As I understand it, 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. We want to create a dynamism downtown, and it's the young staffers in the Assembly and the nightlife opportunities and the housing that we 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 you, Chair, and thank you both for your insights, and one of the things that you mentioned, Ted, in terms of--the economy is doing well, the tech sector is doing well, just to give Bay Area as an example, 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 the urban environment, but also to get people out, even if they're living in the suburbs?

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 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 of their home and into that third place, which ideally would be in our downtown cores, and so I think about entertainment zones, certainly, but it's beyond that. It's like gathering places, gathering zones, place-making, bringing families out, giving people a reason to leave their home or leave their suburban enclave with their strip malls, wherever else are 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. They 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 suburban business districts into the downtowns.

And so that--you're sparking kind of those thoughts with me, and also with Austin, you mentioned the 15 minute experience, which there's a lot of folks that are watching through streaming, a lot of the staffers and others 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, Assembly Member. So what I mean is within a 15 minute radius, 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.

And then if you don't mind, I'd just like to add on the place-making front, I think that's where 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 a event activations or it is actual place-making public space activation, right? I think the way we've thought about downtowns and the events we catered to that population was 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.

Thank you for those comments, and one thing I'll just maybe ask to close and maybe, Ted, this is a question similar to the doom loop, one you get a lot, but one of the things that I've, since we've started this effort, and generally a question that I've, that I've been asked and that others have been asking is: what is making California unique in this? It seems that our downtowns are struggling more in recovery.

And one is that sort of your sense, not only as compared to some other places throughout the country, but if you travel to a lot of parts of the world, they look like they don't have any of the challenges that we're having. Their office buildings are full. There's people everywhere downtown. And so with this question both, 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 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 as much as we can learn from some of the things that our mayors are doing, 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?

I would just say a couple things about what's special about or particular about California and 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 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 percent 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 CDA's perspective is that we do work very closely with our counterparts across the country, with the International Downtown Association to understand 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 we are looking at best practices. We are looking at how we can bring those ideas into California, but we're not entirely unique, 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 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 as much as I've looked at this, we don't have all the answers here, and we do have some, in some ways greater challenges, and so what can we do 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, so if there is anyone in the room who wants to give public comment, you can come up to the mic. If you'd state your name, your organization, and your brief statement on the issue, and we're grateful for you all being here and for spending the time with us here this morning.

Good morning, Chair Haney--would say Members of the Committee, but I'm sure they're listening--Michael Ault, Executive Director of the Downtown Partnership, excited about not only the work of the Committee, but the opportunity, I think, for downtowns really to express our challenges. We have been, as a capital city, over-reliant on office workers. No city outside of Washington, D.C. is 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 on 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 couple 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, Andres Ramirez, on behalf of the Salesforce Transit Center and Transbay Joint Powers Authority. 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, 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 has affordable housing built in and part of the overall transit program.

A couple of things we just want to iterate: 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.

Honorable 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 percent 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 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 we're focusing on our issues and I hope that Santa Monica can be of assistance to you as you seek legislative solutions. Thank you.

Mr. Chairman, I'm John Caner, 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 cultural lifeblood of our communities. We need to have them survive, drawing people to the downtowns, so let's not forget about them. The other thing is we have added 1,500 housing units.

We have 2,000 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 downtowns 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 were formerly an 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 May Lee 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. 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 in 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. You can't pass go without Clean and Safe. We know that is a challenge for why maybe even our arts institutions, all of our industries, tourism, is suffering in our communities. 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, 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 CDA is represented here. We want to be a partner with you and look for to this fight. Thank you.

Hi, Chair Haney. My name is Suzanne Holley. 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. 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 place-making.

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. This first hearing was really meant to be a level setting, a broad overview of some of the challenges and opportunities that we want to go into deeper and also to identify the partnerships 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 were brought forward, whether it's Clean and Safe, whether it's state infrastructure and resources, tax incentives, flexibility for conversions, tourism, hospitality, nightlife. We've really heard it all here.

And we do intend to work on all of these issues and also to elevate 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 also, I would like to say help is on the way, and I just really appreciate all of the work that everyone is doing from our downtown associations to our small businesses, 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 updated. We intend to have a few more hearings this year. I want to do these as often as possible, and we're going to take them on the road. So if there are things that you want to bring us to focus on in your communities, in your cities, please do let me know and we're going to not only look closely at these issues but develop really strong policy solutions to them. With that, thank you so much everyone. This hearing is adjourned.