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Record of Proceedings

Berkeley City Council Special Meeting on Economic Dashboards – February 25, 2025

City Council — Tuesday, February 25, 2025
BodyBerkeley, California
SessionCity Council
DateTuesday, February 25, 2025
StatusFILED
Video Record
0:00 / 1:10:43

Original source
Transcript — VerbatimClick a timed line to jump · ⧉ to share it
0:00

Boarding in progress.

0:01

I think we're all ready to go.

0:03

Thank you all so much for being here.

0:04

I'd like to call to order the special meeting of the Berkeley City Council.

0:08

It's Tuesday, February 25th, 2025.

0:12

Thank you all for being here.

0:14

Um you please take role.

0:19

Yes, absolutely.

0:20

Council member Sarwani Chaplin.

0:27

Thank you.

0:29

Present.

0:30

Tracub.

0:31

Present.

0:31

Oh, Keith.

0:33

Blackaby.

0:34

Here.

0:35

Muna?

0:36

Here.

0:37

Humbert?

0:38

Here.

0:38

And she here.

0:41

Great.

0:41

So we have a special work session today with the Berkeley for on the Berkeley Economic Sports update.

0:49

So we're excited to pass it over to I think El.

0:53

Thank you so much.

0:55

Thank you.

0:56

Just get our screen sharing going here.

0:59

Good afternoon, Mayor, members of the council.

1:02

It's uh good to be with you all today.

1:04

I'm Hollander.

1:05

I'm the manager of the Office of Economic Development here at the city of Berkeley.

1:08

I'm here with my colleagues, Redmond Cleveland, Vincent Boy, and Jennifer Lavorn.

1:12

We're thrilled to share with you the 2024 economic dashboard.

1:16

Uh this is our companion publication to our current district dashboard.

1:20

Both of these are posted on our website and in your packet in the OED doing business in Berkeley webpage.

1:27

So with that, let's get to it.

1:30

Um, my first slide is employment activity.

1:33

Uh unemployment is up slightly in Berkeley, as is holding fairly steady.

1:38

Um, but jobs in the East Bay grew um nine tenths of a percent in 2024.

1:43

Uh, the three largest sectors are educational and health services, government, major, and hospitality.

1:49

All of these sectors grew in 2024.

1:52

And um smaller sectors like the architects and engineering type professional services also grew uh year over year, though they're a sort of smaller slice of the pie, 1.5% of total jobs in the East Bay.

2:04

Um, information trade and transportation and utilities sectors experienced decreases uh in the last year.

2:12

Eleanor, could you just move a little closer to the mic?

2:14

You is that better?

2:16

Yeah.

2:17

We're sharing, so I'll try to speak to so speaking of jobs here on the list here on the screen are the top 25 employers presented alphabetically in the city of Berkeley.

2:27

Um as you know, this is reflective of Berkeley's diverse economy.

2:30

Uh we have a huge number of education uh employers and health care, uh highlights on the chart there.

2:38

And we have a um largest private employer here.

2:41

Uh two social service organizations, like housing, and sound affordable housing made the top 25 list this year.

2:48

And I'm gonna turn to Liz to talk a little bit about our hospitality sector.

2:53

Thank you, Eleanor.

2:54

Good afternoon, council.

2:56

I wanted to share with you a couple of the key sectors that drive the Berkeley economy and how they perform last year.

3:02

So starting with hospitality sector, uh it's very exciting that the city of Berkeley's hospitality sector actually fared better than our neighboring East Bay cities, and even better at most times in terms of occupancy rates in San Francisco.

3:16

And I think that's in part for a number of reasons shown on the right.

3:21

So you see Berkeley became part of the Atlantic Coast Conference, which drew a number of domestic visitors.

3:27

We have a very strong culinary scene.

3:29

Hopefully you've all enjoyed it and we'll continue to enjoy it.

Discussion Breakdown — Share of Meeting
Economic Development█████████████████████████████████████████████58%
Technology and Innovation█████████12%
Arts And Culture█████████12%
Public Works█████6%
Public Engagement███4%
Public Comment███4%
Housing██2%
Affordable Housing██2%
Summary of Proceedings

Berkeley City Council Special Meeting on Economic Dashboards – February 25, 2025

The Berkeley City Council convened a special worksession on Tuesday, February 25, 2025, to receive the 2024 Berkeley Economic Dashboards update from the Office of Economic Development (OED). The presentation covered employment trends, hospitality performance, innovation sector activity, commercial real estate vacancy, sales tax revenue, housing development, and OED program initiatives. Public comments raised concerns about federal workforce reductions and downtown vacancy rates. Council members discussed strategies to support small businesses, improve business licensing, retain startups, and address commercial vacancies. No formal votes were taken.

Public Comments & Testimony

  • First speaker (in-person): Requested that the boundaries of each commercial district be clearly listed to avoid confusion, and asked for explanations behind significant vacancy rate increases or decreases. The speaker noted an upbeat presentation but questioned which positive trends are at risk given current economic uncertainties.
  • John Caner (Downtown Berkeley Association): Stated that the downtown vacancy rate is actually 28.2% after removing about 1 million square feet of non-commercial uses (parking garages, Berkeley High School) and including pending development vacancies. Reported that six housing projects with 2,900 units in downtown are on hold due to high interest rates and construction costs. Requested council support for storefront improvement programs (e.g., window film, art pop-ups), safety ambassadors, and security cameras.
  • Kelly Hamergan (online): Noted that four of her Berkeley neighbors lost federal jobs this week and urged council to press staff on how the gutting of federal employees, funding, and grants might impact Berkeley’s economic outlook.

Discussion Items

  • Presentation by Eleanor Hollander, Liz, Vincent, and Jennifer (OED):
    • Employment: Unemployment slightly up; East Bay jobs grew 0.9% in 2024. Top sectors: educational/health services, government, hospitality. Smaller sectors like architecture/engineering also grew.
    • Hospitality: Berkeley outperformed neighboring East Bay cities and San Francisco in occupancy rates. 2.4 million visitors spent an average of $187.5 per night, generating about $7.1 million in Transient Occupancy Tax. Events like Berkeley Restaurant Week and Bioneers Conference drew visitors.
    • Innovation Sector: Over 400 companies citywide, with 35% software, 32% biotech/healthcare, 15% climate tech. UC Berkeley ranked #1 globally for venture-backed startups. Total venture capital raised in 2024: $1.2 billion (up from 2023), though fewer companies raised money. Top deals: KoBold Metals ($537M), Twelve ($245M), Perfect Day. Government R&D grants increased to $14.3 million.
    • Commercial Real Estate: Wet lab vacancy at 48.6% (inflated by large spaces like Berkeley Commons); office vacancy at 18% (up from 14% in 2023). Average office rent: slightly over $3/sq ft.
    • Retail & Commercial Occupancy: Citywide ground-floor vacancy dropped from 8.1% to 7.5%. Decreases on San Pablo Ave, Solano Ave, South Berkeley, University area, and Telegraph. Increases in downtown (10.9%), Elmwood, North Shattuck, West Berkeley, and neighborhood commercial districts. Retail makes up 31% of ground-floor uses; food/beverage 13%.
    • Sales Tax: Q2 2024 revenue higher than 2023 but below 2022 peak; retail 45% of sales tax, food/beverage 37%.
    • Housing: 1,600 units approved in 13 projects in 2024. Median single-family home price: $1.4 million (second only to Piedmont); sales volume down 12%; rents slightly increased (studio up 1.7%).
    • OED Programs: Resiliency Loan Program (RLP) and other loan funds; business district support; Discover Berkeley marketing campaign (over 4 million impressions, 180,000 engagements); 79 green business certified; 125 STEM career visits by Berkeley High students; 111 arts grants totaling $760,000; two major public art projects completed; and ongoing work on economic impact study and resilient sector plan.
  • Councilmember Humbert: Asked if the 1.7% studio rent increase accounted for unit mix; staff said it was a high-level average. Questioned whether below-inflation rent increases signal stabilization due to increased housing supply.
  • Councilmember Bartlett: Asked about the decrease in South Berkeley vacancy (19.2% to 10.9%)—whether it reflected office/professional services replacing retail. Staff noted removal of residential properties from commercial count and unlicensed businesses. Bartlett stressed need for lower rents to support walkable retail and cultural vitality, and encouraged free public art projects.
  • Councilmember Lunaparra: Asked about the impact of the R&D grant tax exemption (passed unanimously last year) and about support for small businesses (e.g., flower shop downtown). Staff reported 15 companies approved for the waiver anecdotally, calling it a net positive for business license compliance and reputation. On small business support, staff noted business licensing speed, shared facilities, and the Project Equity worker-cooperative program.
  • Councilmember Blackaby: Asked what more the city can do to retain startups (especially biotech) that leave for Emeryville, Alameda, or San Leandro. Staff cited opportunities for city pilots of new technologies, matching building stock to startup needs (e.g., grad labs), and leveraging UC Berkeley innovation. A Startup Cluster Advisory meeting is scheduled for March 12, 2025.
  • Councilmember Tregub: Asked about services to save struggling businesses before they close. Staff acknowledged businesses often go quiet; efforts include convening commercial districts, offering workshops, and helping with data. The OED newsletter and one-pager can connect businesses to services.
  • Mayor Ishii and others: Thanked staff for the report, praised the arts program and green business certification, and encouraged use of the #DiscoverBerkeley hashtag.

Key Outcomes

  • No formal votes, motions, or decisions were taken at this special worksession. The council received the economic dashboard update and directed OED staff to continue collaboration with the council and downtown partners on addressing commercial vacancy, improving business licensing, and supporting small businesses.
  • Upcoming next steps include the Berkeley Startup Cluster Advisory meeting (March 12, 2025) and continued exploration of storefront improvement programs, pop-ups, shared facilities, and potential city pilot projects with local startups.

Meeting Transcript

Boarding in progress. I think we're all ready to go. Thank you all so much for being here. I'd like to call to order the special meeting of the Berkeley City Council. It's Tuesday, February 25th, 2025. Thank you all for being here. Um you please take role. Yes, absolutely. Council member Sarwani Chaplin. Thank you. Present. Tracub. Present. Oh, Keith. Blackaby. Here. Muna? Here. Humbert? Here. And she here. Great. So we have a special work session today with the Berkeley for on the Berkeley Economic Sports update. So we're excited to pass it over to I think El. Thank you so much. Thank you. Just get our screen sharing going here. Good afternoon, Mayor, members of the council. It's uh good to be with you all today. I'm Hollander. I'm the manager of the Office of Economic Development here at the city of Berkeley. I'm here with my colleagues, Redmond Cleveland, Vincent Boy, and Jennifer Lavorn. We're thrilled to share with you the 2024 economic dashboard. Uh this is our companion publication to our current district dashboard. Both of these are posted on our website and in your packet in the OED doing business in Berkeley webpage. So with that, let's get to it. Um, my first slide is employment activity. Uh unemployment is up slightly in Berkeley, as is holding fairly steady. Um, but jobs in the East Bay grew um nine tenths of a percent in 2024. Uh, the three largest sectors are educational and health services, government, major, and hospitality. All of these sectors grew in 2024. And um smaller sectors like the architects and engineering type professional services also grew uh year over year, though they're a sort of smaller slice of the pie, 1.5% of total jobs in the East Bay. Um, information trade and transportation and utilities sectors experienced decreases uh in the last year. Eleanor, could you just move a little closer to the mic? You is that better? Yeah. We're sharing, so I'll try to speak to so speaking of jobs here on the list here on the screen are the top 25 employers presented alphabetically in the city of Berkeley. Um as you know, this is reflective of Berkeley's diverse economy. Uh we have a huge number of education uh employers and health care, uh highlights on the chart there. And we have a um largest private employer here.

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