Economic Development & Intergovernmental Relations Committee Meeting - November 17, 2016

The Economic Development and Intergovernmental Relations Committee met on November 17, 2016, for its final meeting of the calendar year. Councilmembers Kate and Alvarez were present; Vice Chair Kercy was absent (attending League of Cities). The committee reviewed updates from the Port of San Diego, the San Diego Workforce Partnership's Connected Careers program, a feasibility study on Community Revitalization and Investment Authorities (CRIAs), the federal lobbying year-in-review and outlook, and the proposed 2017 state and federal legislative platform. The committee also approved a $17.5 million CDBG reinvestment initiative for fiscal year 2018.

Consent Calendar

• The committee approved the single consent item from the Commission for Arts and Culture. The motion was moved by Councilmember Kate and seconded by Councilmember Alvarez; the vote was unanimous.

Public Comments & Testimony

• Martha Welch (public comment on general items) spoke about food stamps, alleging state corruption and stating the governor is aware of issues. She expressed opposition to what she described as bribes and conspiracy.
• Public Comment on CDBG Reinvestment Initiative (all speakers in favor):
  • Cynthia Gabler (Chair, National Federation of Filipino American Associations, San Diego Chapter) expressed strong support for funding for the Bay Terrace Senior Center project, noting it would help make the project shovel-ready.
  • Marcelo Petron (President, Bellam Senior Association) expressed strong support for the proposed funding for the senior center, thanking the committee.
  • Aurora Soriano Codal (Past President, Council of Filipino American Organizations; Chair Emeritus, NAFA) recounted past promises for a Tuma Park senior center, expressed joy at seeing $2.6 million in the budget proposal, and urged approval.
  • Martha Welch (additional speaker) expressed support but warned against using grass in dog parks, suggesting alternatives like gravel or bark.

Discussion Items

• Port of San Diego Semi-Annual Update (Item 2): Port Commissioners Marshall Merrifield, Rafael Castellanos, and Bob Nelson presented highlights. They reported the selection of One Highway One as the winning developer for the Central Embarcadero project (70-acre site, $1.2 billion total cost with $500 million equity and $700 million debt). They also discussed: redevelopment of East Harbor Island (57 acres) with two San Diego-based developers; modernization of the 10th Avenue Marine Cargo Terminal (96 acres) with a $24 million first phase (including a $10 million federal TIGER grant); plans for the North Embarcadero phase two (B Street Pier to Grape/Laurel) and a programmatic EIR covering all 6,000 acres of Port jurisdiction; a proposed permanent outdoor concert venue for the San Diego Symphony; a Blue Tech incubator program; water quality projects (copper reduction at America's Cup Harbor); and the Pond 20 mitigation bank project. The report was informational and required no approval.
• Connected Careers Program Performance Overview (Item 3): Peter Costram (President/CEO, San Diego Workforce Partnership) and Stephen Cologne (Program Coordinator) presented. In 2016, Connected Careers enrolled over 3,100 young people, trained over 3,300, and placed 753 in internships (as of that morning). The program has grown from about 300 placements in 2014 to a projected 1,000 in 2016. The city's increased funding allowed the program to become year-round and add innovations like an iPad lab and the #MyFirstJobSD initiative. The Brookings Institute recognized the program's software as possibly the best in the country. The presentation outlined a proposed expansion costing about $1,700 per internship and $1,500 per externship. This was an informational item.
• CRIA Feasibility Study (Item 4): Eric Caldwell (Economic Development Director), Michael Lengel (Civic San Diego), and Paul Marra (Kaiser Marston Associates) presented findings on Community Revitalization and Investment Authority (CRIA) feasibility. The study analyzed five test boundaries and projected 45-year tax increment capacities. Key findings: the city share of the 1% property tax ranges from 15.6% to 20.9% across areas; without county participation, total non-housing capacity ranged from about $64 million (Barrio Logan/Southeastern/Encanto) to $118 million (City Heights/College Area); county participation would double or more those amounts. The study also compared CRIA to 12 alternative funding mechanisms, rating CRIA low on efficiency due to complex compliance requirements. No city has launched a CRIA; Indio is furthest along. Councilmember Alvarez requested the report be used to advocate for legislative changes. This was informational.
• Federal Lobbying Year-in-Review and Look Ahead (Item 5): Pamela Welsh and Mallory Richardson of Squire Patton Boggs, the city's federal lobbyists, presented successes and outlook. 2016 successes included: a $5 million WaterSmart grant for Pure Water; language in drought legislation (though stalled); promise zone designation; moving to work extension; and support for regional projects. For 2017, they noted uncertainty under the incoming Trump administration, anticipated a continuing resolution through March 31, and flagged potential threats to CDBG and municipal bond tax-exempt status. Councilmembers expressed concerns about federal funding for community development. This was informational.
• 2017 State and Federal Legislative Platform (Item 6): Kristen Tilquist and Alejandra Cavadden presented the proposed 2017 platform, which maintains broad policy priorities. Notable changes include removing references to redevelopment, adding support for CRIA/EIFD improvements, incorporating new priorities from councilmember memos (e.g., energy efficiency block grants, racial profiling opposition), and adding language to strengthen the promise zone and techhire designations. Councilmember Alvarez requested a strike-out comparison to the 2016 platform. The committee approved the recommendation to forward to council.
• CDBG Reinvestment Initiative FY18 (Item 7): Eric Caldwell and Stephen Middle-Williams presented the proposed FY18 reinvestment plan. The city will receive $215 million in repaid CDBG obligation over 15 years; for FY18, they proposed $17.5 million. The plan includes: about $5 million for housing/homelessness, $5 million for economic development (workforce and small business), $2.5 million for sustainability, and $4.2 million for infrastructure, capacity building, and public services. The Consolidated Plan Advisory Board recommended the plan on October 12, 2016. Speakers publicly supported funding for the Bay Terrace Senior Center ($2.6 million included). Councilmember Kate moved to approve with additional reporting; Councilmember Alvarez seconded.

Key Outcomes

• Consent Calendar (Item 1): Approved unanimously (with Councilmembers Kate and Alvarez voting); no roll call recorded.
• Item 4 (CRIA): Informational only; no formal vote. Councilmember Alvarez suggested using the report to lobby the state legislature for changes.
• Item 6 (Legislative Platform): Motion by Councilmember Kate, seconded by Councilmember Alvarez, to forward the 2017 platform to full Council with the attached recommendations. The motion passed unanimously.
• Item 7 (CDBG Reinvestment Initiative): Motion by Councilmember Kate to approve the proposed FY18 plan as staff recommended, with a request for additional details on funding recipients and project status; seconded by Councilmember Alvarez. The motion passed unanimously. The schedule includes City Council consideration on December 6, 2016, and annual allocation approval in March/April 2017.
• Next steps for various items: Port projects will proceed with due diligence and negotiations; Connected Careers expansion will be considered; CRIA legislative advocacy will be pursued with state lobbyists; legislative platform will go to full Council in early December; CDBG plan will be presented to Council in December.