City of Santa Monica

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City of Santa Monica

• The state of the City

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Fear vs. Optimism
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National State EconomyEconomic Turmoil
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Economic Outlook - National

• National economy more than one year into a
  recession that is possibly the worst since World
  War II
• National unemployment rate rising, weak retail
  sales, housing markets downturn entering fourth
  year, loss of wealth from stock market declines
• Economy may remain in fragile state at least
  through the end of 2009 with unemployment
  continuing to rise into 2010

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Unemployment
Source CNN 1/27/09
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Retails Changing FaceMervyns, Sharper Image,
Linens n Things, Circuit City, KB Toys -
Closing All Stores

• Foot Locker Stores Closing or Closed 140
• Gap Inc. Stores Closing or Closed 85 Zales
  Stores Closing or Closed 105
• Dell-Stores Closing or Closed 140
• Home Depot Stores Closing 15
• CompUSA Stores Closing or Closed 103 Pier 1
  Imports Stores Closing or Closed 25 Rite
  Aid-Stores Closing or Closed 28
• Ann Taylor-Stores Closing or Closed 117
  Disney-Stores Closing or Closed 98 Sprint
  Nextel Corp. Stores Closing or Closed 125
• Macys Closing or Closed 11 (one in So.
  California)

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Economic Outlook State

• Budget deficit at least 15 billion this year
  could be over 42 billion by end of FY 09-10
• State Controller projects State will run out of
  cash by Feb. 2009 unless action taken
• IOUs for tax refunds
• Work stoppage on public works projects

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Economic Outlook State

• December unemployment rate of 9.3 is highest in
  15 yearsincrease to 10 or 11 possible and long
  slow recovery ahead
• State shifted over 4 million from RDArising
  deficit could mean permanent/deeper shift, Prop
  1A borrowing from local jurisdictions and other
  takes

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Economy Local Outlook

• Local economy, while diversified, not immune to
  economic downturn
• Sales taxes declining
• Rapidly decreasing new auto sales/leases (over
  20 of City sales taxes)
• Temporary closure of Santa Monica Place
• Weakening tourism and falling hotel occupancy
  rates

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Economy Local Outlook

• Global recession fears weakness could last
  through 2009 in US and 2010 in CA
• Property values up over 9 in FY2008-09, but
  lower increases in future years expected
• Office vacancy rate increasing while lease rates
  are decreasing
• Investment earnings are declining due to record
  low interest rates

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Economy Local Outlook

• Recession could also affect parking-related
  revenues
• Measure "SM" passed on November 4
• 8.2 million previously designated by Council to
  protect against loss of UUT will now be
  designated to help protect the City from impacts
  of the changing economy and any sudden loss in
  revenues

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Local Unemployment is Increasing

• City unemployment rates have historically
  remained well below the County of Los Angeles and
  the State of California but have increased

Comparative Unemployment Rates
December
Source State of California Employment
Development Department
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Property Tax Revenue Growth Based on Strong
Assessed Value Growth
Source Los Angeles County Auditor-Controller
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Property Transfers
Source County of Los Angeles Registrar Recorder
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CSM Building Permits/Valuation
Source City of Santa Monica Building and Safety
Division
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Diversified Tax Base
Source City of Santa Monica FY2008-09 Adopted
Budget
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City Sales Tax Receipts Key Retail Sectors
Source HdL
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Retail Sales WeaknessQ3 2008 Compared to Q3 2007
Source HdL
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Santa Monica TourismLodging Rental/Occupancy
Rates
October
Source PKF Consulting
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Average Room Rates-Various CitiesNovember 2008
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High Demand for Office Space

• Office vacancy rate has risen to 12 (average for
  the Los Angeles market area is 12.2)
• Asking rents still highest in the region

Source Grubb Ellis Research
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Budget Gaps
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Symbiotic Relationships

• Auto Dealers proposed use of Civic Center
  Parking Garage during high capacity periods
• Solar Santa Monica
• City Policy and Ocean Avenue Restaurant

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Santa Monica Place
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Santa Monica Place
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Civic Center Development

• Civic Center planning will focus on moving
  forward with a design and implementation plan for
  the public improvements including
• New parks and open space, revitalization and
  reuse of the Civic Auditorium
• Development of the planned early childhood
  education center with Santa Monica College
• Refinement of the bridge, roadway and pathway
  plans that will connect the Civic Center to the
  downtown and surrounding neighborhoods
• Plan would provide us with the opportunity to
  interface with Samohi Master Plan

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Expo Line

• Phase 2 - improve mobility between Culver City
  and Santa Monica by bringing light rail from
  Downtown to the beach
• Exposition Light Rail Line is accelerating after
  passage of Measure R
• Service on Phase 2 line is anticipated to begin
  by 2015

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Annenberg Community Beach House
Sited on a 5-acre beachfront property, this
public beach club will have event, meeting and
recreation space to provide the ultimate day at
the beach experience. Construction is 80
complete, projected opening April 2009. More
information available at www.beachhouse.smgov.net

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Measure V Update

• The City has retained program managers to help
  expedite the delivery of Measure V Projects 
• Measure V capital and financing plan to be
  presented to Council in February
• Pier Storm Drain Improvement Project highest
  priority
• Preliminary Design Work Complete
• Bidding Process Complete
• Construction Awarded on January 27

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Other Long-Term Projects

• Downtown parking enhancements
• Complete Big Blue Bus campus expansion
• Begin construction of new water treatment
  facility for Charnock Wells
• Affordable Housing

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Federal Economic Stimulus Package

• Congress passed a 819 billion economic stimulus
  plan - goal to have it signed into law by
  mid-February
• Working with Congressman Waxman, Senators
  Feinstein and Boxer
• Access DC Trip March 9-12 Southern CA on the
  Hill

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Federal Economic Stimulus Package

• Key - needed Santa Monica Projects that are
  shovel ready
• California Incline Replacement of bridge
• Palisades Bluff stabilization Installation of
  water drainage pipes and other measures to
  stabilize the bluff
• Pier Bridge Widening Infrastructure
  Improvements Replacement of bridge between
  Ocean Ave and Pier deck, structural upgrades and
  deck replacement
• Street, Alley projects Resurfacing of various
  streets and alleys citywide

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Light at End of Tunnel

• Santa Monica should lead real estate recovery as
  one of the first cities to pull out of the
  recession
• Tourism and hotel occupancies have also rebounded
  first

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Summary

• Seek symbiotic relationships that will benefit
  our community
• Stimulate local economy by implementing Capital
  Projects
• Seek ways to reduce City expenditures without
  negatively impacting services
• Aggressively pursue federal funds allocation from
  the 819 billion stimulus package

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When you are going through hell,
Keep Going!
Winston Churchill