Economic Development and Intergovernmental Relations Committee Meeting - March 13, 2024

The Economic Development and Intergovernmental Relations Committee met on March 13, 2024, to consider several items including amendments to a marketing agreement with Toyota, approval of business improvement district budgets, a new chilled water service agreement, and informational presentations on office optimization, Junior Achievement, Sister Cities, and state affairs. All voting items were approved unanimously.

Consent Calendar

• Approval of Committee Meeting Minutes (February 7, 2024): Approved unanimously by all present members.

Public Comments & Testimony

• Item 1 (Toyota Agreement): One speaker expressed concern about the cost of transferring maintenance responsibilities to the city, questioning the value compared to purchasing vehicles.
• Item 2 (BID Budgets): Multiple speakers supported the budgets, including representatives from the County of San Diego Black Chamber of Commerce (Donna DeBerry), City Heights CDC (Rosa Olasquaga and Natasha Salgado), Hillcrest Business Association (Ben Nichols), North Park Main Street (Mark West), Gaslamp Quarter Association (Michael Trimble), Little Italy Association (Chris Gomez), and East Village Association (Ethan Olson). One speaker criticized nonprofit management of BIDs. Another speaker praised the program and requested quantifiable metrics.
• Item 3 (Chilled Water Agreement): One speaker questioned the cost and efficiency of the system compared to newer technology and raised concerns about water usage.
• Item 4 (Office Optimization Study): Two speakers commented. One asked about building longevity and AI impact on future designs. Another criticized spending on new offices while storm victims need help and suggested the telework push is disconnected from community needs.
• Item 5 (Junior Achievement): One student (Jade Ciaphone, Lincoln High) supported career readiness programs. One speaker criticized indoctrination and called the program propaganda.
• Item 6 (Sister Cities): Three speakers supported the program, praising its peace-building and global cooperation. One speaker criticized engagement with the United Nations and claimed local agendas are predetermined.
• Item 7 (State Affairs Update): Two speakers commented. One expressed disappointment over the elimination of the shallow subsidy program from HAP. Another criticized state spending on undocumented immigrants at the expense of homeless seniors and education.
• Non-Agenda Public Comment: Speakers addressed gun violence reduction efforts, smoke shop enforcement of synthetic THC products, and criticism of city parking policies and state funding priorities.

Discussion Items

1. Authorization of Second Amendment to Toyota Motor Sales and San Diego Toyota Dealers Advertising Association Marketing Agreement: Staff presented the amendment to accept three additional leased lifeguard vehicles, transfer non-warranty repair responsibilities to the city, and authorize $192 per vehicle monthly for preventative maintenance. The Independent Budget Analyst noted the current agreement requires lifeguard staff to coordinate maintenance logistics for 38 vehicles. The amendment is expected to save staff time. Councilmember Campbell moved approval, seconded by Chair Campillo. Passed unanimously.
2. Fiscal Year 2025 Business Improvement Districts Budget Annual Appropriation Process: Staff reported on the city's 18 active BIDs, with an estimated $1.5 million in assessments from ~12,000 businesses. The city will directly manage the San Ysidro BID until a nonprofit is identified. Council policy waivers will be needed. The IBA noted the city's direct management costs are unknown but existing staff will be used. Councilmember Campbell moved approval, seconded by Vice Chair Lee. Passed unanimously.
3. Approval of Premises Schedule Number Three to Master Energy Services Agreement with Energy Center San Diego for Balboa Theater Chilled Water: Staff requested authorization for a new premises schedule to provide chilled water to the Balboa Theater for an estimated $10,000/month (approx. $120,000/year) over a 15-year initial term with two five-year extensions. The building currently lacks infrastructure for a traditional AC system. Chair Campillo moved approval, seconded by Councilmember Campbell. Passed unanimously.
4. Downtown Civic Core Office Optimization Study (Informational): Staff presented findings from a JLL consultancy study assessing future office needs given hybrid work. Key findings: current downtown square footage is 819,000 sq ft; proposed future state is 580,000 sq ft (a reduction of nearly 250,000 sq ft). The study recommends a 1.5 desk-sharing ratio and increased collaboration spaces. Employee surveys showed 75% prefer two or fewer days in-office, and parking was the top desired amenity. A pilot with Risk Management department begins in April 2024. Councilmembers Campbell and Lee raised concerns about reduced space and parking supply; Chair Campillo suggested considering on-site childcare.
5. Informational Presentation by Junior Achievement of San Diego County (Informational): Sid Vivek, President/CEO, presented the organization's work in financial literacy, workforce development, and entrepreneurship for K-12 students. Programs include paid internships in growth careers, with a focus on historically underrepresented communities (Nestor, San Ysidro, Southeast San Diego). The program is privately funded. Councilmembers praised the initiative and asked about the Mission Federal Credit Union finance park simulation.
6. Informational Presentation by San Diego International Sister Cities Association (Informational): Executive Director Jessica Sensadi and others described the city's 16 sister city and 8 friendship city partnerships, emphasizing economic development, cultural exchange, and diplomacy. They requested consideration of returning city budget support, noting other cities like Los Angeles ($80,000/year) and Long Beach ($100,000/year) provide funding. Their upcoming event is an Indigenous Forum at UCSD Park and Market on November 21, 2024, as part of the World Design Capital. Councilmembers expressed support and discussed future partnerships.
7. 2024 Spring State Affairs Update (Informational): Director of Government Affairs Adrian Granda and consultant Moira Top discussed a worsening state budget deficit ($38-58 billion), key budget priorities (homelessness funding, infrastructure, public safety), and legislative bills on housing streamlining, coastal commission reforms, retail theft, fentanyl, and gun violence prevention. They noted the governor's proposed cuts to REAP program funding ($14.8 million for San Diego) and lack of HAP6 funding. Councilmembers Lee and Campillo thanked staff and requested a future presentation to the Land Use and Housing Committee on housing budget impacts.

Key Outcomes

• Item 1: Recommended to City Council to approve the second amendment to the Toyota Marketing Agreement (unanimous vote: 3-0).
• Item 2: Recommended to City Council to approve the FY2025 BID budgets and related actions, including waiving council policies for direct management of the San Ysidro BID (unanimous vote: 3-0).
• Item 3: Recommended to City Council to approve the premises schedule for the Balboa Theater chilled water service (unanimous vote: 3-0).
• Items 4, 5, 6, 7: Informational only; no votes taken. Committee members provided feedback and expressed support or concerns. The next regularly scheduled meeting is May 22, 2024, at 9 a.m.