The Santa Monica Chamber of Commerce held its annual State of the City event on Friday, featuring speeches by Mayor Ken Genser, city manager P. Lamont Ewell, and economist Christopher Thornberg, of Beacon Economics.
Genser kicked off the event by reminding the crowd of his long history with Santa Monica, citing the growth that has taken place in the city during his tenure as resident, city councilmember, and mayor.
“I see a huge maturation in this community both in a substantive way and in a political way,” Genser said. He went on to say that issues such as renter’s rights and homelessness have become less and less divisive since 1988, when he first ran for city council.
Pointing to the economic crisis impacting the entire nation, Genser also talked about the difficult challenges faced by the city.
“Even though we have had success and we are enjoying that success, we are entering some really difficult times,” said Genser, referring to the economy. “We don’t know how long this is going to last…it seems to be deeper than anything we’ve experienced so far.”
On a brighter note, Genser added that the downturn will force Santa Monicans and city officials to explore their core values and decide what things are absolutely essential to the prosperity of the city.
Ewell followed Genser, highlighting in more statistical terms the bleak realities that face the city. Beginning with an overview of the national economy, Ewell said the current recession is possibly the worst since WW II. He talked about pending retail closures, including the shuttering of all stores in franchises such as Mervyns, Sharper Image and Linens ‘n Things. At the state level, he cited a budget deficit that could reach more than $42 billion by the end of fiscal year 2009-2010, and a current unemployment rate of 9.3 percent.
Locally, Ewell said Santa Monica’s economy is diversified, but “not immune to the economic downturn.” Rapidly decreasing local auto sales, which account for more than 20 percent of city sales taxes, was just one indicator he cited of the financial trouble at the city level. On a bright note, Ewell said, property values are up by nine percent in Santa Monica, but that lower increases are expected in the future. Local unemployment is up, tourism and hotel occupancy is down, and office vacancy rates are down, according his report.
Ewell also addressed a slew of positive outlooks for the city, including the fact that Santa Monica is likely to lead real estate recovery as one of the first cities to pull out of the recession. In his “next steps” wrap up, he said the city needs to seek symbiotic relationships, stimulate the local economy by implementing capitol projects, reduce spending, and aggressively pursue federal funds allocation from the $819 billion stimulus package. He said plans for public improvements at the Civic Center will move forward, as will the Exposition Light Rail project, which relies on voter-approved Measure R funds. A Measure V capital and financing plan will be presented to the city council in February; the highest priority project is storm drain improvement. Other long-term projects include improvements to parking and affordable housing.
Thornberg followed Ewell with a clear and concise summary of what went wrong in the lead up to the recession and how the country will dig out. Housing, finances and the consumer, he said, were the three factors in the decline. He said recovery is “a given” but that the timing of recovery is still an unknown. He also said the downturn cannot be classified as a full blown depression and that the economy should begin to recover in 2010, with a housing recovery following in 2012.
