Economic Development and Intergovernmental Relations Committee Meeting - February 7, 2019

The Economic Development and Intergovernmental Relations Committee of the San Diego City Council, chaired by Councilmember Ward, met on February 7, 2019, at 10:00 AM. Present were Vice Chair Montgomery and Council Members Bree and Kirsey, along with staff from the City Attorney, Mayor's Office, Independent Budget Analyst, and committee consultant. The committee approved minutes from December 6, 2018, heard public comment, and took action on two discussion items: a software license amendment for the Revolving Loan Fund and the 2019-2020 state and federal legislative platform. Two informational items were also presented: the FY 2018 San Diego Tourism Marketing District (TMD) Performance Report and the committee's 2019 priorities.

Consent Calendar

• Approval of minutes from December 6, 2018: motion by Councilmember Kirsey, second by Councilmember Bree, passed unanimously.

Public Comments & Testimony

• Martha Welch (non-agenda public comment): Expressed opposition to plans for the Seaport development and the handling of Anthony's restaurant lease, criticized SANDAG for money and election issues, and called city actions regarding RP and other matters illegal. She stated she has worked with the governor on these issues.
• Mr. Gordon (on item 2): Mentioned a $500 million application deadline for the Strategic Growth Council and cautioned that the issue of worker classification (independent contractors vs. employees) is tricky and may cause splits between unions and self-employed groups.

Discussion Items

• Item 1: Second Amendment to Software License and Maintenance Agreement with Philadelphia Industrial Development Corporation (PIDC)

  • Presented by Meredith Dibdin Brown and Rosalina Enriquez (Economic Development Department). The city's Revolving Loan Fund (RLF) program, funded by the Economic Development Administration, has provided approximately $8.8 million in gap financing to small businesses in San Diego and Chula Vista since the late 1990s. The requested amendment extends the term up to 10 years and authorizes expenditure not to exceed $15,000 from the RLF (no general fund impact). The annual maintenance fee is $550 for the first year.
  • Councilmember Kirsey moved to recommend approval to full council; seconded by Councilmember Bree. Passed unanimously.

• Item 2: 2019-2020 State and Federal Legislative Platform

  • Presented by Patrick Buteller, Denise Garcia, and Adrian Granda (Government Affairs). The platform updates the 2018 version, incorporating feedback from committee priority memos. Key priorities include: homelessness services (expanding behavioral health facilities), housing policy (effective use of public parcels), Pure Water program (previously secured $30M in grants and $600M loan), Mid Coast Trolley ($80M additional last year), Tijuana River Valley infrastructure, San Onofre nuclear waste removal, opposing offshore drilling, supporting free trade, and annual federal appropriations requests.
  • Committee members offered comments and additions:
    • Councilmember Kirsey: Suggested expanding the state's infrastructure bank (I-Bank) and collaborating with the county on common issues like homelessness and affordable housing.
    • Councilmember Bree: Requested support for legislation allowing local jurisdictions to require helmets for adults on dockless scooters (micro-mobility), and emphasized accessing cap-and-trade funds for affordable housing (e.g., 273-unit project at 13th & Broadway).
    • Councilmember Montgomery: Highlighted promise zones, opportunity zones, and the Green New Deal; asked for focus on incentives for businesses in underserved communities.
    • Chair Ward: Added support for single-payer healthcare, student loan debt relief, gun safety, appropriate worker classification (contractor vs. employee), and the concept of the Green New Deal.
  • Chair Ward incorporated all comments into a motion: support for I-Bank expansion, local control of micro-mobility regulations, support for businesses in underserved (LMI) communities, improved healthcare systems, student loan debt relief, gun safety, worker classification, and the Green New Deal concept. The motion also included a request to use LMI (low-to-moderate income) terminology. Motion by Chair Ward, seconded by Councilmember Bree; passed unanimously.

• Item 3: FY 2018 San Diego Tourism Marketing District (TMD) Performance Report (Informational)

  • Presented by Colleen Anderson (TMD Executive Director) and Joe Tozzi (San Diego Tourism Authority). Key performance data: In 2018, $232 million in Transient Occupancy Tax (TOT) was collected, with an estimated 35% ($82 million) from TMD-funded programs. Tourism jobs reached 194,000 (1 in 8 San Diegans). Hotel occupancy hit a record 80.8% (top 5 nationally). TMD's overall ROI was 21.3:1; SDTA delivered 23.2:1. The TMD funded 16 applicants in FY 2018 (up from 10 in FY 2017). Highlights included the Always On Digital Content Initiative, over 1 million convention room nights booked for the fourth year, and the Kids Free San Diego program influencing 800,000 room nights. The Experience San Diego Destination Master Plan is being implemented, with Balboa Park initiatives (National Geographic partnership), LA market campaigns, and China market entry. Specific event ROIs ranged from 2.4:1 (Beer Week) to 76.3:1 (Farmers Open). Joe Tozzi noted that 2018 was likely a peak, with 2019 showing only marginal growth (2-3%) due to limited convention center capacity and increased competition. He discussed shifting from spot market to national broadcast advertising.
  • Committee members asked about future growth strategies, medical tourism (Destination Care), visitor surveys, and diversification of events to include more culturally diverse offerings. Chair Ward noted that the committee previously approved $5 million from the litigation reserve for additional promotion and asked for an update on that spending. No action required.

• Item 4: Economic Development and Intergovernmental Relations Committee Priorities for 2019 (Informational)

  • Chair Ward outlined the committee's work plan, including: cannabis equity, child care, veterans contracting and permitting, continued homelessness and workforce development efforts, a deeper look at Civic San Diego, cooperative businesses, and planning for the next three-year Economic Development Strategy cycle. Also mentioned small business programs, inclusive economic development, youth employment, closing the skills gap and digital divide, and the Small Business Advisory Board. Councilmember Kirsey requested an update on the USMCA (successor to NAFTA) and its impact on the regional economy, noting that Paula Avila from the Chamber of Commerce might present. The work plan is dynamic and subject to change. No motion needed.

Key Outcomes

• Item 1 (Software Amendment): Committee recommended approval to full City Council. Motion passed unanimously.
• Item 2 (Legislative Platform): Committee approved the 2019-2020 legislative platform with amendments incorporating members' additions. Motion passed unanimously.
• Item 3 (TMD Report): Received as information; no vote required.
• Item 4 (Committee Priorities): Received as information; no vote required. The next committee meeting is scheduled for March 7, 2019, at 2:00 PM.