Economic Development and Intergovernmental Relations Committee Meeting - May 17, 2023

The Economic Development and Intergovernmental Relations Committee of the San Diego City Council met on May 17, 2023, at 9:00 a.m. The committee considered five agenda items, including amendments to a behavioral health services agreement, approval of the downtown Property and Business Improvement District (PBID) budget, the Tourism Marketing District (TMD) annual report, a sales and marketing update from the Convention Center, and an update on the Creative City cultural planning process. All three action items were approved unanimously.

Consent Calendar

• The committee approved the minutes of the April 12, 2023 meeting by unanimous voice vote (motion by Vice Chair Montgomery Steppe, second by Councilmember Campbell). No public testimony was offered.

Public Comments & Testimony

Non-Agenda Public Comment:

• Jan Bourgeois (in-person) commended the city for safe parking and tent programs but recommended providing larger congregate tent spaces for people experiencing homelessness in East Village, noting that people form groups and often will not come off the street.
• Terry Ann Skelly (virtual) expressed support for youth employment training and workforce development, but urged the committee to maintain 1,000-foot buffer distances between marijuana businesses and sensitive youth areas (churches, parks, daycares, libraries). She stated that many people of color already own marijuana businesses and questioned the need for additional saturation.
• Barbara Gordon (virtual) voiced concern about low workforce participation among 18-25 year olds, citing increased drug addiction and marijuana use. She urged the city to focus on internship programs for youth rather than expanding marijuana businesses.
• Peggy Walker (virtual) cited a United Nations report criticizing U.S. marijuana legalization for negative public health effects, and argued that the industry prioritizes profit over societal health. She opposed weakening restrictions on cannabis businesses.
• Becky Rapp (virtual) opposed the cannabis business division's efforts to remove caps on retail shops and weaken zoning restrictions, stating that protections for children and youth should remain in place. She referenced comments from the County's Chief Population Health Officer on addiction.
• Judy Strang (virtual) expressed support for youth programming and mentoring, but opposed expanding marijuana business footprint, stating that youth are the most important investment.

Public Comment on Agenda Items:

• Item 1 (Behavioral Health Services Amendment): One speaker (phone ending 7968, from District 3) expressed surprise at the $25 million settlement with the county and thanked the committee for bringing the item forward.
• Item 2 (PBID Budget):
  • Alonso Vivas (in-person, Senior VP of Downtown Partnership) highlighted Clean and Safe team accomplishments: 80 trees planted, 1.9 million pounds of trash collected, 100 new trash cans, 37,000 sidewalks power washed, 7,000 illegal dumps collected, 31,000 welfare checks, 400 individuals reunified/housed, and a new Clean and Safe app. He urged support.
  • Blair Beekman (virtual) thanked the ambassadors but noted that mediation with homeless individuals sometimes lacks resolution and suggested improvements.
• Item 3 (TMD Report):
  • Blair Beekman (virtual) commented on the need for innovative technology and community involvement to attract tourism.
  • Joyce Sanyata (virtual, District 3) praised the "Meet America's Brightest City" campaign and noted strong recovery downtown.
• Item 4 (Convention Center Update):
  • Blair Beekman (virtual) requested longer public comment times and expressed hope for positive economic packages in 2024-2025.
  • Joyce Sanyata (virtual) praised the convention center as a "juggernaut" and requested attention to safety at the intersection near the trolley stop and pet cabs.
• Item 5 (Creative City Cultural Plan):
  • Blair Beekman (virtual) urged the cultural affairs board to consider open democracy and participatory processes.
  • Joyce Sanyata (virtual) expressed strong support for the planning process and thanked the team.

Discussion Items

Item 1: Second Amendment to Agreement for Behavioral Health Services with the County of San Diego

• Walt Bishop (Deputy Director of Government Affairs) and Dion Acres (Regional Government Affairs Manager) presented the amendment, which would authorize use of remaining $7 million from a $25 million behavioral health impact fund (created by a 2020 settlement) for city-initiated projects, including capital improvements for Homekey Round 3 permanent supportive housing. The amendment follows a prior amendment in June 2022 that allowed lease uses. Current successes include 99 beds and support services.
• Vice Chair Montgomery Steppe asked about cost differences among bed projects (e.g., $500,000 for 20 TAY beds vs. $12 million for 58 residential beds). Staff committed to providing details.
• Councilmember Campbell asked if the $7 million Homekey funds would be restricted to individuals with mental health diagnoses. Molly Weber from the Housing Commission confirmed that all Homekey properties are permanent supportive housing with wraparound services funded separately by the county; the city funds would support capital improvements and local match.
• Councilmember Lee confirmed the funding relates to two Homekey projects recently presented.
• Chair Campillo asked whether court approval was needed for the amendment; staff responded that no additional court action is required.
• Outcome: Motion to approve passed unanimously (all members present).

Item 2: Fiscal Year 2024 Property and Business Improvement District (PBID) Budget – Downtown San Diego

• Michelle Munoz (Small Business Engagement Specialist) and Sean Carefin (Program Manager) presented the downtown PBID (Clean and Safe) budget. The district covers 13,906 parcels across 275 blocks and six zones. The FY2024 annual report requests $12.1 million from operating funds, including $150,000 for city administration. Services include sidewalk cleaning, graffiti removal, safety ambassadors, and homeless outreach. The program employs 141 staff and operates 24/7.
• Councilmember Lee praised the Grow Urban Initiative for tree canopy, data collection on homelessness, and the team's work. He moved approval.
• Vice Chair Montgomery Steffe seconded.
• Outcome: Motion passed unanimously.

Item 3: Approval of Fiscal Year 2024 San Diego Tourism Marketing District (TMD) Report of Activities

• Lisa Lind (Community Development Coordinator), Elizabeth Studebaker, Colleen Anderson (Executive Director of TMD Corp), and Carrie Kavich (COO of SDTA) presented. The TMD covers lodging businesses with 70+ rooms citywide. The FY2024 report includes a five-year review and forward look. Accomplishments: COVID recovery, 22:1 ROI on $128.3 million investment in FY19-22, and a record 31.1:1 ROI in FY22. Estimated FY2024 available funds: $70.3 million ($46.5M from assessments, $23.8M from prior savings and catastrophe reserve). Recommended allocations: $50.5 million to SDTA, $2.2 million to other entities (Sports San Diego, legacy events, etc.), plus administrative costs. Two new tennis tournaments funded. The SDTA program includes media campaigns in eight countries, a destination master plan, and a tourism accelerator program for diverse businesses.
• Chair Campillo noted that the mayor's May budget revision increased TOT projections by $5.7 million, attributing success to TMD efforts.
• Vice Chair Montgomery Steppe asked about neighborhood-focused programming and ROI measurement for New York/Chicago murals. Carrie Kavich explained social influencer work and a mural project with TripAdvisor. She also addressed the outlook for summer travel and flexibility to adjust to economic conditions.
• Councilmember Campbell praised the 31:1 ROI and the TMD's contribution to the general fund.
• Councilmember Lee highlighted the TMD's role in funding street paving and homelessness response, and asked about competitive pressures. Kavich identified Los Angeles, Las Vegas, Florida, and Hawaii as competitors.
• Outcome: Motion to approve (by Chair Campillo, seconded by Vice Chair Montgomery Steppe) passed unanimously.

Item 4: San Diego Convention Center Corporation Sales and Marketing Update (Information Item)

• Rip Rippetoe (President & CEO), Carlos Coda (Board Chair), and Julie Coker (CEO of SDTA) presented. The Convention Center's strategic plan focuses on refining the business model to attract higher-return events. FY2024 projections: $1.7 billion in regional economic impact (record-breaking), 747,000 visitors, nearly 1 million contracted hotel room nights, and 107 events (fewer than pre-pandemic but more lucrative). Workforce recruitment is improving; 75 new staff hired from Jan-Apr 2023. Food service workers earn $26-27/hour. Industry trends: sustainability, public safety, and shorter booking windows. The center also supported the city during COVID (homeless shelter, migrant children).
• Chair Campillo noted infrastructure needs and asked about long-term planning. Rippetoe discussed the 8-year booking cycle and trends in food & beverage and sustainability.
• Councilmember Campbell thanked the team for using the center for homeless and migrant services.
• Councilmember Lee praised the strategic shift to higher-quality events, noting it frees time for capital improvements and aligns with leisure travel trends.
• No motion required; information accepted.

Item 5: Creative City Cultural Planning Process Update (Information Item)

• Jonathan Glus (Executive Director, Commission for Arts and Culture) presented the framework for San Diego's first cultural plan, called "Creative City." The plan aims to create a cultural policy framework, address challenges (rising costs, lack of affordable spaces, historic inequities, pandemic impacts), and leverage arts for citywide goals. The planning process runs through early 2025, with intensive public engagement in June-July 2023 (50+ convenings, including one in each council district, DIY toolkits, online surveys). The consultant team is Cultural Planning Group, working with local partners like Casa Familiar. The plan will include assessment of city programs, facilities, and funding opportunities. The city's creative sector generates $1 billion in economic activity.
• Vice Chair Montgomery Steppe appreciated the focus on cultural districts and engagement.
• Councilmember Campbell expressed excitement about the plan's potential.
• Councilmember Lee asked about collaboration with the new County Arts Commission and about incorporating existing nonprofit partners. Glus and Christine Jones described co-hosted sessions and partnerships with other city departments. Lee also noted the importance of housing for artists.
• Chair Campillo asked about the timeline between listening and drafting. David Plettner Saunders explained the need for analysis, internal reporting, and iterative drafting, noting that two-year timelines are typical for major city cultural plans.
• No motion required; information accepted.

Key Outcomes

• Item 1 (Behavioral Health Services Amendment): Approved unanimously. The amendment allows the city to initiate projects using the remaining $7 million from the behavioral health impact fund, intended for Homekey Round 3 permanent supportive housing.
• Item 2 (PBID Budget): Approved unanimously. The FY2024 downtown PBID budget of $12.1 million was authorized, including $150,000 for city administration.
• Item 3 (TMD Report): Approved unanimously. The FY2024 TMD annual report and associated expenditures (including $50.5 million for SDTA and $2.2 million for other entities) were approved, along with authorization for outstanding FY2023 reimbursements.
• Item 4 (Convention Center Update): Received as information; no vote taken.
• Item 5 (Creative City Cultural Plan): Received as information; no vote taken. The next formal update will be presented in winter 2024.
• The meeting adjourned at approximately 11:15 a.m. The next regular meeting is scheduled for June 14, 2023, at 2:00 p.m.