San Diego Economic Development and Intergovernmental Relations Committee Meeting - September 26, 2019

The committee met on September 26, 2019, at 10:00 AM to discuss several items including a cannabis equity program, updates from the Port of San Diego and the San Diego County Regional Airport Authority, and a pilot program for rapid rehousing employment. Vice Chair Montgomery and Councilmembers Bree and Kirsey were present. The meeting included public comments, presentations, and committee deliberation.

Consent Calendar

• The minutes from the July 25, 2019 committee meeting were approved unanimously by a motion from Vice Chair Montgomery and a second.

Public Comments & Testimony

• Non-Agenda Public Comment: Jeff Olson, chair of Public Bank SD, updated on the public banking project bill (AB 857) which had passed the Assembly and Senate and awaited Governor Newsom's signature. He stated his organization had secured funding for a preliminary business plan for a potential Bank of San Diego and would present it to the committee after the bill is signed.
• Cannabis Equity Program Public Comments:
  • Terry Ann Skelly spoke in opposition, expressing concern about marijuana outlets near vulnerable neighborhoods and citing a study linking storefront proximity to increased youth use.
  • Peggy Walker opposed, arguing that the program would use tax money from drug sales to fund drug education, sending a confusing message.
  • Phil Rath, representing the United Medical Marijuana Coalition, supported the proposal in concept, noting the disproportionate impact on communities of color, but cautioned that the tax-generating businesses need ongoing support.
  • Barry Harris Jr., CEO of Paving Gray Futures, supported the equity program and requested immediate consideration for a social equity license to create entrepreneur and career opportunities for impacted individuals.
  • Armand King, a self-described person impacted by the war on drugs (convicted for marijuana), supported the program but urged careful wording to ensure funds actually help impacted communities, citing failures in Oakland and San Francisco.
  • Ebony Lee (Paving Gray Futures) opposed combining Prop 64 funds with CDBG because CDBG has never had an equity component and is not legal for this purpose; she requested the ordinance be written with intentional verbiage benefiting black and brown communities.
  • Adriana Giamarino supported the program, sharing a personal story of a neighbor who benefited from medical cannabis, and advocated for safe access and continued legalization.
  • Michael Zuquette (San Diego Municipal Employees Association) supported a robust equity program but opposed earmarking funds in a council policy, arguing that budgeting should be done annually through the budget process.
  • Terry Best (Americans for Safe Access) supported the program and recommended that funds go to grassroots organizations, avoid the county drug prevention plan, and that equitable cannabis outlet permitting be opened, especially in District 4.
  • Sapphire Blackwood (land use expert) supported the program and advised the council to revisit costly and time-consuming land use ordinances that hinder entry into the industry.
  • Tariq Hadari (Mid City Cannes) supported reinvesting funds in youth services and hoped equity permits would be considered as the industry expands.
  • Dallin Young (Association of Cannabis Professionals) fully supported the establishment of a social equity program.
  • Mirabel Sanchez supported the equity program.

Discussion Items

• Cannabis Equity Program: Deputy Chief of Staff Max Elderin and Policy Advisor Kathleen presented a proposal to create a cannabis equity program funded by Measure N cannabis business tax revenues. The program aims to repair harm from the war on drugs, which disproportionately impacted Black and Latinx communities. Key statistics: Black Californians were 2 times more likely to be arrested for cannabis misdemeanors and 5 times more likely for felonies than whites; Latinx Californians were 35% more likely. The program would invest in youth workforce development, access to capital for cannabis businesses, expungement relief, and community violence reduction. The proposed structure mimics the "Penny for the Arts" program, with annual budget allocations. The committee discussed funding, eligibility for state grants, and concerns about earmarking. Councilmember Kirsey authored Measure N and noted the general fund already supports costs of the new industry; he preferred not to set a fixed percentage but decide annually. Councilmember Bree supported the intent and suggested considering employee ownership programs. Vice Chair Montgomery emphasized the need for "deserving treatment, not preferential treatment" and moved to refer to the city attorney to draft a resolution and council policy, with specific elements including legal analysis on licensing and permitting exemptions for equity participants. The motion passed unanimously.

• Port of San Diego Update: Commissioners Merrifield, Castellanos, and Zuquette presented several projects: San Diego Symphony Bayside Performance Park ($45M, construction started, completion expected summer 2020); Wonderfront Music and Arts Festival (inaugural Nov 22-24, 2019); Blue Economy Incubator (expanded support for water-dependent startups); Cruise season (104 calls expected, 338,000 passengers); Cargo volumes (3M metric tons/year); 10th Avenue Marine Cargo Terminal modernization ($24M); Portside Pier (four-restaurant complex, opening soon); Snooze Pods (low-cost visitor accommodations, 220 pods at $35/night); InterContinental Hotel (400 rooms, generating $2.5M TOT to city); Shelter Island Boat Launch (reopened after $10M project); Central Embarcadero Project (70 acres, up to $2.5B, long-term planning); Harbor Island redevelopment (450-room hotel progressing, 48 acres redevelopment after developer withdrawal); Port Master Plan Update (draft out, environmental review spring 2020).

• Airport Authority Update: Chair Bulling reported on key achievements: successful opening of customs facility, signing of a 10-year airline operating agreement, and progress on the Airport Development Plan (ADP) including replacement of Terminal One. Stats: 24M passengers in 2018 (record), over 1M international (19% increase). The ADP includes up to 30 gates (vs. 19 in Terminal One), dual-level roadway removing 45,000 car trips daily from Harbor Drive, and $500M from airlines for transit improvements. Four transit options moving forward for further study: NAVWAR site with tunnel, NAVWAR with automated people mover, and two trolley extension options. Noise mitigation (Part 150 study) is ongoing with a public workshop on Nov 21. Sea level rise is addressed through climate resilience planning, higher building pads, stormwater capture, and partnership with Scripps for sensors. Timeline: draft EIR out for 45-day comment, potential groundbreaking 2021, completion 2024.

• Rapid Rehousing Employment Pilot Update: Andrew Picard (San Diego Workforce Partnership) presented one-year results of a pilot program to integrate employment services with rapid rehousing. 185 participants were served across three tracks: career centers, Achievement Academy (with Housing Commission), and Individual Placement Support (IPS) model. IPS (high-touch, low caseload) was the most utilized. Outcomes: 45 participants employed (approx. 25%), with an average commute of 9 miles. Total funding was ~$1M ($750K from federal grant, $200K city, $50K from Lucky Duck Foundation). Participants were from nearly all districts, with 31% from District 4. Key lessons: need for ongoing funding for IPS model, continuous communication with housing specialists, and defining "work ready." The pilot runs two years; further evaluation will compare outcomes to rapid rehousing only. Councilmembers praised the effort and requested more data on barriers to employment and long-term housing stability.

Key Outcomes

• Cannabis Equity Program: Motion (by Vice Chair Montgomery, seconded by Chair Ward) passed unanimously to direct the city attorney to draft a resolution and council policy creating a cannabis equity program, with elements including investment in youth programs, access to capital, community violence reduction, expungement relief, and legal analysis on licensing/permitting for equity participants. The motion included that funding would be determined annually through the budget process. The IBA and Mayor's Office expressed concerns about revenue diversion and sustainability.
• Port and Airport Updates: These were informational items; no action taken.
• Workforce Pilot Update: Informational; the committee expressed support and requested follow-up data on participant outcomes and barriers.