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It’s my pleasure to be here for my fourth annual Rotary
Speech. This is a group strongly
committed to San Jose – both to our history and to our future.
Every year, I have a difficult time picking out what to talk to you about.
There’s always so much going on in San Jose. If you believed the
newspaper you’d probably expect me to talk about golf.
But today I want to talk to you about downtown.
I like talking about downtown. That’s
where I live – and I love it. It’s
my neighborhood. I love to walk to our great restaurants.
I love the festivals that bring people in from all over the region. I
love to feel the genuine buzz of people on the streets.
Downtown is a fun and exciting place – to live, work and play. It’s important to remember, downtown has been a work in
progress for more than two decades. We’ve
had some hits--like the Convention Center, the Tech, the Museum of Art, and the
Arena. And we have had some misses. We also need to remember why San Jose renewed its commitment
to our downtown in the first place. There
was a long, long period when our community abandoned it. City Hall moved out. Retail
moved out. Residents moved out.
Corporations moved out. The
Mercury News moved out. This happened to downtowns everywhere.
Twenty years ago, San Jose was a doughnut, and downtown was its hole.
There were no problems parking back then. It
took a long time for that to happen, and it has taken a long time to bring it
back. We are fortunate today for the good work that has been done
by my predecessors as mayor, and by city councils that continue to focus on
reinvestment in downtown. And we cannot forget the commitment of our downtown
businesses and neighbors who share our hope for a great future. What this all
means is that downtown needs constant hard work and attention.
It will always be a work in progress.
Great cities, like San Jose, are never done. Today, of course, we have new challenges.
For a few years, we enjoyed a great – yet unrealistic – boom time–
and then the sudden bust that left downtown, Silicon Valley, and California
spinning. We went from commercial
office vacancy rates of zero to vacancies today that are over 14 percent. We
went from 1.5 percent unemployment here 18 months ago, to unemployment now that
is about 8 percent. And then there
was the impact of the September 11th tragedy. Tourists stopped traveling. Businesses reduced their conventions. Airport traffic has fallen off by a third. People are holding onto their wallets and purses a little bit tighter. Everyone’s feeling the crunch. Retailers and hotels in
our downtown core are hurting and have cut hours and staff.
And of course, I was disappointed that the Palladium deal couldn’t
pencil out because of the economy. Our challenge today is building a critical mass of people
in the downtown to support businesses. This
means residents. Office workers.
Tourists. Business
travelers. While it is a bit tougher now, I believe we have major
opportunities. It’s easy to be doom and gloom. I think there’s a great myth
floating around that nothing is happening downtown right now.
That’s wrong. I’d like to address that myth head on. Let me give you some facts.
Here’s a partial list of what we’ve started, moved significantly
forward or accomplished – just in the last three years: · Right now 2,600 new downtown homes are under construction or in the pipeline– that represents about 8,000 new downtown residents! · John Sobrato’s office tower will open this December · Adobe started building its 3rd tower to expand its corporate headquarters · Opus finally got started and built the office tower on the site of old Mercury News · We’ve restored the historic Letitia building and are on our way with the Twohy Building · We saved the historic Montgomery Hotel and found a developer to make it a high-end boutique hotel and restaurant. Construction will begin this fall. · The Improv is coming to San Jose and will open in the restored historic Jose theater by November · The restoration of historic Fox Theater is on schedule to open for Opera San Jose
· We extended Sharks lease to make sure they stay in San Jose to at least 2018.
This is already a long list, especially when you consider
that we are in a recession now. While
the economy is showing signs of recovery, downtown construction has been
booming. We have 650,000 square
feet of office space under construction right now.
With Opus just opening, that makes our total a million square feet on
line. Proving downtown is and will
be a great place to work and do business. I am also proud that we will start construction on the new
San Jose Civic Center next month. The
new Civic Center will be adding nearly 2,000 employees to the downtown area.
That’s 2,000 potential diners and shoppers downtown. Combined with the
other jobs we’re poised to attract, we’ll have busy sidewalks during the day
and the unavoidable side effect longer waits for a table at lunch-- and yes
maybe even searching for parking. Besides being a great place to work, downtown is a great
place to live. Take it from me.
There’s a lot of interest in our downtown by developers and people
shopping for homes. People more and
more want to live in an urban environment.
They want to walk to their favorite restaurant or store.
They want to live close to transit so it’s easy to get to work. They
want some place unique. And we have
that in our downtown. As I just mentioned, we have over 2,600 new downtown homes
either under construction or in the approval process right now.
Compare that to the 2,000 that were built between 1980 and 2000, a
20-year time frame. These units
have sprung from our focus over the last three years on accelerating housing
construction downtown. We’ve
proven people want to live downtown. That there’s a strong market.
And that it will continue to expand. Downtown housing has its challenges.
Our focus is to build more high-rise housing, so we can take advantage of
the new BART and Light Rail stations that are coming to downtown. However,
wishing won’t make it so. Some
have suggested that if we subsidize the first project, others will follow.
The facts don’t support that argument. At the moment, the cost of building high rise is higher
than the market for home ownership and rentals will support.
However, I believe the time for high-rise may be closer.
The City Council just recently gave the green light to Barry Swenson to
build “Taylor Towers” just north of downtown. These will be four apartment
towers up to 14 stories, right near the light rail line on First Street. It’s
a good example of the transit-oriented development that we need in San Jose.
It’s also a good opportunity for residents to have spectacular views of
San Jose from their living rooms. As we build a critical mass of people living downtown, we
help expand our retail opportunities. Despite what you may hear otherwise, the
national retail industry is very interested in downtown and enthusiastic about
San Jose. We have great
demographics and great economic potential.
However, we have to recognize that we need to do something different.
Traditional ways of thinking will not accomplish our future goals.
And it won’t be easy. Not enough of our own residents visit downtown today –
our own surveys have found that 40% of San Jose residents only visit
occasionally and another 30% almost never come downtown. We have to work on parallel paths. We have to support our current small businesses in downtown.
They are the ones that enrich the local unique character of San Jose. At
the same time, we have to attract new retailers to downtown.
They’re one of the keys to bringing new people downtown.
A downtown that’s exciting and appealing. A destination spot. Let me share with you several of our quiet new successes that are happening right now, and over the next few months. They are not big and splashy, but they are steady. This is the kind of change that feeds success. This is the continuing change that you’ll notice when you walk around downtown: §
Britannia Arms just opened in May §
Starbucks at Convention Center will open this month,
followed by a Krispy Kreme Doughnuts outlet § An additional Kinko’s on Santa Clara and San Pedro will open by July §
Pinnacle Fitness–owned by Bally’s will open in
the Pavilion by July §
Giza Lounge will open this month on North First– §
Germania is reopening this month near St. James Park § O’Flaherty’s in San Pedro Square will open in July § Peggy Sues II at Park Center Plaza, yet another place serving breakfast, is scheduled to open this July § Sonoma Chicken will open on North Market this July §
San Jose Bar & Grill – will open in August on North
Second To build on this list we’re going to need to be bold.
We’ve done our studies. Now
is the time to move. I’m personally and aggressively pushing to make downtown
a retail destination. For example,
two weeks ago, a major restaurant chain and a developer were deadlocked in
negotiations. I
personally met with the landlord and called the restaurant’s lead negotiator
and got them back to the table. I’m
happy to say the deal is back on track. I
expect to announce the name of this restaurant very soon. My goal in all of this is to overcome barriers.
Barriers that include negative thinking.
Barriers that say we can’t keep our current businesses, or that we
can’t attract new businesses. Barriers
that include fear of change, or unimaginative thinking, or impatience, or
complacency. Downtown needs yea
sayers, not nay sayers. I’m pushing hard for results. And I don’t think we have
to rely totally on Redevelopment subsidies.
One thing we’ve learned in recent years is the downtown has reached a
point that makes it very attractive for private investment. But the City and the
Agency must be catalysts, partners, and dealmakers.
We must view ourselves as facilitators, not regulators. I’ve challenged the Redevelopment Agency to go beyond our
city limits to actively recruit retailers instead of waiting for someone to
knock on our door. It’s like my old days in marketing at HP.
Every month we have a sales meeting and the Agency must show me what’s
in the pipeline, where the future leads are, and what we need to do to bring
those leads to downtown. So we are bringing City Hall back. Housing is coming back.
Business is coming back. Retail is coming back.
It’s time for the Mercury News to come back – maybe John Sobrato can
talk to Joe Natoli? Nothing supports retail and the economy better than a
concentration of foot traffic, year round.
One of the best tools for doing that is our Convention Center.
I believe we can become more competitive in the national convention
marketplace, and bring the economic benefits that come with that to San Jose.
That’s why I’m proposing today that San José should take the steps
now—not later—to expand our Convention Center. I will begin working on a plan to accomplish this goal, and
I will ask the City Council to take the next steps to make this happen – on
this November’s ballot. The best
way to finance an expansion is by raising the hotel tax. The best thing about the hotel tax is that it is very narrow.
It is paid by the users of the convention center and by visitors, and it
will lead to more business for our downtown hotels, restaurants, and stores. But
it will require voter approval – two-thirds, in fact.
This isn’t going to be easy. I
think we can reach the two-thirds bar—but we have little room for error. This will be a significant uphill battle – but it’s one
I’m willing to fighting for. I
believe our hotels and downtown businesses will support this effort, and I think
you should too. No one in this room
is more excited about this than Dan Fenton.
Dan Fenton asked me to announce that he will be passing around the hat
for campaign contributions. And I challenge each of you to personally get involved in
this campaign. While no project is
a silver bullet, Convention Center expansion is the extra muscle the downtown
needs. I’m eager to lead this
campaign. And we need your help. Great cities are never done. They preserve their ties to
the past that give them unique character, as we have been doing in San Jose. But
they also are continuously renewing themselves as new opportunities come – or
are created I’ve told you about what’s happening in our downtown.
Now, let’s talk about the future.
Many of you here today remember downtown San Jose 20 or even 50 years
ago. Join me in envisioning our
downtown 20 or 50 years from now. The downtown I see emerging when I look outside the window
of my own home. I see a downtown that’s teeming with all types of people,
whether you’re are young professionals in an exciting urban environment--or an
empty nester enjoying the convenience of living in the heart of the city without
the hassle of a lawnmower. I see you living in a home built over your favorite
restaurant and near the BART station you walk to in the morning. I see a downtown that’s a great place to visit.
A place where your family comes to to enjoy our culture.
Whether it’s the Jazz Festival, our Museum of Art or new cultural
activities, the Sharks, or downtown nightclubs – you come to enjoy the
excitement our downtown has to offer. If I look a little further out my window, I see a downtown
where you come to shop. A place
where you walk up and down our sidewalks to enjoy exciting retail stores and
discover the wonderful mix of our local businesses that give downtown its
character and life. It’s a
downtown where we have both corporate headquarters and mom-and-pop businesses.
Where you buy what you need – whether it’s the latest fashions, a
toothbrush, or fresh tomatoes. It’s a place where people of all backgrounds come together to celebrate as one community, as people proud of San Jose. That’s the downtown I see, and the one we’re building towards. A place where I hope you’ll both enjoy spending time and helping us build, together. Thank you.
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