Keynote-San Francisco-The Outlook

Introduction By: Kevin Kone, Assistant Chief Financial Officer – San Francisco International Airport.

Transcription:

Moderator (00:05):

Thank you. Good morning and for those of you arriving at the conference today, welcome to San Francisco. It is my pleasure this morning to introduce city administrator Carmen Chu, the city's highest ranking non-elected office. City administrator Carmen Chu was sworn in by Mayor London Breed on February 2nd, 2021, and prior to this city administrator, Chu was elected assessor from 2014 to 2021, an elected representative of the Board of Supervisors from 2007 to 2013, deputy director of the Mayor's Office of Public Policy and Finance from 2004 to 2007, city Administrator Chu has over 17 years of governmental management and finance experience with the city and county of San Francisco and is the first Asian American woman to serve as city administrator.

(01:03)

City administrator. Chu oversees 25 departments and divisions and programs that include the Department of Technology, office of Contract Administration and purchasing real estate, county clerk, fleet Management, convention facilities, animal Care Control, the Medical Examiner and Treasure Island. She's responsible for 1400 person staff and an annual budget of three quarters of a billion dollars. Through Covid. Chu served as the co-chair for the city's economic recovery task force and collectively the task force functioned as a bridge between the community, business labor and the nonprofit leaders and local government to create a series of recommendations to help the San Franciscans recover. During her time as assessor, her office generated over $3 billion in annual revenues for Vital City Services and for the public education. She also launched the Bay Area's First Family Wealth Forum to bridge the resource gap for low income and monolingual immigrant communities. City administrator Chu earned her master's degree in public policy from UC, Berkeley, and a bachelor's degree in public policy from Occidental College. As a fellow colleague, it's been my pleasure to watch Carmen grow and ascend in her governmental service. We really appreciate her taking the time out of her busy schedule to speak to us this morning. Please join me in welcoming city administrator Chu.

Carmen Chu (02:58):

So I wrote a love letter once. Here's how it goes. Dear city and county of San Francisco, I love you. I really do. When I first met you, I didn't know just how much you would change me or how much I would change you. I think I've given you the best years of my life and if it all works out, I can see us growing gray and old together. Before we started getting serious, my sofa called friends, they warned me. They said You were lazy, unmotivated, broken, and if I got involved with you, I turn out the same way. Now I know they just didn't see you as I do. I'm embarrassed to admit I fell hard almost immediately. I learned so much from you about how things worked. You're so talented. So giving the first to rush in to a burning building or respond to those in need.

(03:51)

You help people with mental illnesses, youth who are living on the streets. You try your best to provide homes and shelter. You take care of us with clean water, safe parks, libraries. In fact, we share some of the same values. You think it's important to care for our kids and our elders and so do I, and if that's not enough, I can always count on you to pay your bills and you do all of this day in and day out because people are counting on you, but you are not perfect. You have all of these quirky habits built up over years that you called open public processes. I mean, forget about doing anything fast. In other words, bureaucracy. In fact, I remember on so many occasions I just wanted to buy something fast and you insisted I shop around. In fact, for a really, really, really long time, you called it a competitive RFP request for proposal process.

(04:49)

But what I learned was that it was important for me to listen and for us to communicate to understand why you did what you did, and sometimes when I got it to be able to offer a different perspective, maybe a solution, and after much cajoling and convincing, sometimes backed up with solid evidence and sound reasoning, sometimes you did change for the greater good and sometimes you did let go of bad habits. I called it good public policy. Don't get me wrong, as with any relationship, there were ups and downs. I still remember when we went through that rough patch, we fought over everything over money like most couples do. I wanted to say for a rainy day, but you wanted to spend, spend, spend. We fought over who was driving how we'd get there. Our friends and family would weigh in all the time, call it public comment.

(05:42)

Truthfully, I didn't always understand why you did what you did. I call it politics, but when we worked it out, so many people benefited from it and I like to believe that we're stronger for it. I'm convinced though that what us through the toughest times, those times when we had setbacks or disappointments was the fact that ultimately we cared about the same thing, creating the better. It's been almost 12 years now that we've been together, you and I side by side. I may never change you completely, but I am better off having known you and I know we've both been changed by our time together. Now I know it's easy to forget to say thank you or to forget to say I love you and that is why I write you this love letter signed Carmen Chu. July, 2016,

(06:31)

That love letter was delivered to a group of city hall fellows completing their year long internship with us more than seven years ago. For those of you who work for the city or another city, I think you understand what this is like. I want to pause to thank you for the impact you make on the most challenging and seemingly intractable problems of our times for our municipal bond partners. We like you too. Addressing affordability, drug addiction, crime, mental health, fostering economic growth. All these issues are complex with a million reasons why the environment you work under may be intensely frustrating at times, highly scrutinized, and frankly, the news may not always tell the entire side of the story, but yet when you do make a difference, what a big deal that is.

(07:21)

Over the last year, there's been a relentless drumbeat of interest in what's wrong with San Francisco, like a moth to the flame. The stories of demise pull so many people in and let me say, there is not a single leader in the city who doesn't recognize the serious challenges on our street. The impact of cheap fentanyl is devastating here and across the country. The struggles of bricks and mortar retail and the move to remote work have both been accelerated at speeds no one would have predicted before the pandemic. But for those of us who are here, there's also another side of the story of San Francisco where the morning fog never burns off. Where the lines for a delicious flaky banana cream pie for tartine is only rivaled by the line for a good old mission burrito where the city's residential west side inspired by the nightlights of Taipei have drawn thousands of local San Franciscans for a night out building community with neighborhood shops and vendors, hawking crispy pork cutlets.

(08:19)

There is another side of the story of San Francisco where open AI and philanthropic are close to finalizing major leases. Downtown bucking notions of flight where unemployment is at 3.6% amongst the lowest in the state, and where hardworking outreach crews walk side by side with law enforcement, meeting people where they are to help people connect to services and find shelter. This is done every night from block to block, from person to person. There are more stories of San Francisco and those stories are what we do when faced with a challenge, how we roll up our sleeves and resolve problems. Safety and street conditions are core parts of our focus. Earlier this year, the mayor launched an initiative partnering with state and federal law enforcement to tackle drug dealing, open drug use and fencing with the district attorney and our state partners. Law enforcement officials have taken over 110 kilos of fentanyl off the streets.

(09:15)

This represents millions of doses of lethal fentanyl taken off of the streets of San Francisco. 220 new officers have been funded in this year's budget, along with over 600 new shelter beds, over 1000 permanent housing placements and at public works, we've successfully passed a ballot measure to save the department millions in duplicated administrative costs and invested over $18 million in direct additional street cleaning services in downtown. We've invested in community ambassadors and activations in our downtown zone office. Attendance has increased by more than 38% since July, 2022, the largest back to office gain of any American city. Unfortunately, office attendance is still 30% lower than pre pandemic norms. We are wide-eyed that the widespread adoption of remote work may mean that some of this attendance may not return, and rather than burying our heads in the sand, this mayor in partnership with our board has worked to remove barriers to office conversions, including a live proposal that would exempt transfer tax on office to residential conversions.

(10:19)

At least eight commercial buildings have expressed interest in this conversion already. Those in this room know better than anyone that rising interest rates and capital markets have been particularly challenging for housing and commercial construction. With over 70,000 net new housing units in the development pipeline as of Q1 of 2023, we are working proactively to make sure that projects don't stall. Recently, the mayor and the board hammered through a temporary package to lower inclusionary housing requirements and defer development impact fees, actions that effectively reduce ongoing and upfront construction costs with thousands of homes, shops, research labs, and other projects at stake. At the $2 billion petro mixed use development project, the city has passed legislation to create an enhanced infrastructure financing district, allowing developers to bridge financing gaps and move forward. Construction started last week on climate. The effects of climate change are upon us. Many of us saw firsthand the impacts of a very destructive January storm and subsequent state of emergency across the state.

(11:24)

Here in San Francisco's, voters have approved nearly 5.6 billion in geo bonds since 2008. This is more than the 50 previous years beforehand. The vast majority of this funding goes towards building seismic and emergency resilience, 400 million of which is going to protect our seawall along the Embarcadero, but the planning doesn't stop there. And as we speak, the Port of San Francisco is partnering with the US Army Corps of Engineers to establish federal in protecting our port waterfront from sea level rise and flooding. This could result in billions of dollars in additional federal investment directly here in our city. You heard a little bit about artificial intelligence earlier today and from that conversation that San Francisco houses many of the world's top innovative AI programs. Recently, 1 million square feet of real estate market demand came from the AI sector alone and other AI companies from across the country and the world are moving to San Francisco attracted not only by the human talent that is found uniquely here, but also the high level of venture capital activity.

(12:30)

33.8 billion year to date in November this year, we will be hosting APEC, an international conference, bringing heads of states and CEOs from across the top financial and commercial interests across the globe to San Francisco. In 2026, we will host a portion of the World Cup International air travel is at 97% compared to 2019 in August. Domestic air travel is up to 85% of pre pandemic levels, and I think as Kevin shared with me, I believe SFO is the top number one airport according to the Wall Street Journal. This is why we can't take our feet off the gas. We know that we have to continue to build strong tourism business, and last year we passed a renewal of a self-supporting tourism improvement assessment that sets aside ongoing funding to market San Francisco to convention and tourism, but also provides dedicated funding for rent incentives for conventions.

(13:31)

That's a lot. Tuesday, I just want you to know that today is the anniversary of the 1989 Loma Prieta earthquake. It was a 6.9 magnitude earthquake that left destruction in its wake. I remember as a young girl seeing the images of that earthquake. We saw the freeway collapse, and I think that it was a very scary time for many people that were here. The Embarcadero Freeway was closed as a result, and San Franciscans chose to tore that freeway down. They reconnected the city's gorgeous waterfront and built a central subway connecting our southernmost communities to Chinatown the financial district and North Beach. In March, 2020, we faced a global pandemic. We got to work opening up mass public testing and vaccination sites. We partnered with local community groups like Chinese Hospital and the Latino Task Force to reach our most vulnerable populations. When we knew how important technology connection was, we rolled up our sleeves to connect thousands in our community who were disconnected, laying high speed fiber to community learning hubs and to thousands of housing units so that people can do basic things like access vital public health information, learn remotely and find jobs, and in this dense and unique home that we call San Francisco, the seven mile by seven mile city.

(14:58)

Just imagine that seven miles by seven miles only, where you can't avoid the problems in our city by simply traveling on elevated freeways and hoping that what you don't see isn't happening. There is also an intense love for the city, the people who live here, and as I started, the people who work for this city. We love San Francisco, and I will say that San Francisco has never, ever shied away from the big challenges. In fact, we embrace them. I will close today by just recognizing that with everything happening in the world, I know that it's a difficult time and I hope you and your loved ones are safe and well. Thank you.