During its Feb. 16 Study Session, the Beverly Hills City Council reviewed a new draft of the city’s Economic Sustainability Plan, which lays out the blueprint for the city’s economic recovery from COVID-19. The report found that pandemic has exacerbated existing downward trends in key sectors of the city’s economic base. The Council also reviewed changes to the state eviction moratorium and received a report with updates on its COVID-19 rental assistance. Later, during its Regular Session, the Council bid a tearful adieu to Director of Community Development Susan Healy Keene.
The Economic Sustainability Plan was presented by David Bergman, director of the urban planning and economics firm Lisa Wise Consulting. “Sustainability, to our mind, really was the ability to react to unknown changes in the environment [and] to be able to absorb shocks,” said Bergman.
The city first enlisted Lisa Wise Consulting to draft an Economic Sustainability Plan in the wake of the Great Recession, which forced the city to make large cuts to its budget. The City Council at the time felt that austerity on its own would hurt the city more in the long term by dealing a blow to the services expected by its residents and guests. This, in turn, would harm the city’s main revenue sources: the taxes from hotel guests (Transient Occupancy Tax), sales taxes, property taxes, and business taxes.
The city contracted with Lisa Wise Consulting once again in 2018 to update the plan for another four-year period. The update was nearly finished when COVID-19 stuck a stick in the spokes. “We asked Lisa Wise Consulting to look at the trends that were existing pre-COVID, what trends came out of COVID, and then which of these are going to be lasting trends in the retail, hotel, and commercial sectors,” said Deputy Manager Gabriella Yap.
“The City, like all other municipalities, will be affected by the COVID-19 crisis for years to come,” the report reads. “The approach to this Economic Sustainability Plan Update is not to overcorrect from the COVID-19 pandemic, but rather focus on economic strategies and actions that increase the City’s resiliency to market downturns and geopolitical risks and uncertainties.”
The report notes how key sources of revenue for the city were already facing difficult circumstances. For years, the retail market has received bleak prognoses as consumers spent more and more money online. Even luxury markets, which enjoyed relative insulation from the trend, saw declines. But following the explosion of COVID-19, these trends accelerated, and Beverly Hills experienced a rise in commercial vacancy rates.
More than any other business in Beverly Hills, hotels have suffered the most in the era of COVID-19. But even prior to the freeze in international travel, Beverly Hills saw increasing competition from other regional rivals like downtown Los Angeles and West Hollywood.
“They wake up every morning wondering how they can eat your lunch,” Bergman said about West Hollywood.
Beverly Hills has over 10 million square feet in office space. Following shelter at home orders in response to the virus, many of those square feet became vacant. But, again, even prior to the mass migration to Zoom, Beverly Hills saw the decline of major tenants in entertainment and media.
“When HBO moved from Santa Monica, they didn’t move to Beverly Hills,” Bergman said. He added that he expects major shifts in how Americans work in the wake of the pandemic, saying, “We’re going to see dramatic long term employment destruction.”
But Bergman and the report also provided solutions and opportunities to combat these trends. He stressed the importance of pivoting away from international to local customers. “Public opinion surveys are suggesting that, although we’re all anxious to get out of our house, we are reluctant to engage in a lot of tight public spaces like airplanes,” he said.
The report makes dozens of recommendations in an “action plan” for the city. The recommendations range from increasing height limits to accommodate development, to implementing valet-only parking on Rodeo Drive, to rebranding city staff as the “Business Concierge Team.”
Councilmember Lili Bosse felt that the schedule outlined by the report for some of its goals dragged its feet. “It’s a great report, but the timeline on a lot of the action items is too far out and I feel very confident that this council, along with the input of our community, can get a lot of this done much sooner.”
Councilmember John Mirisch, however, sounded a note of caution. “While there are certain things that we can and should do as soon as we can, there are other things we need to be a bit cautious about,” he said.
In another agenda item during the Feb. 16 Study Session, the Council reviewed the new state eviction protection and how it fits together with its own protective laws. It also received a staff report that detailed issues in its rental protections for tenants impacted by COVID-19.
Governor Gavin Newsom signed on Jan. 29 an extension to the state’s eviction moratorium through June 30. The bill, Senate Bill 91, also establishes the State Rental Assistance Program to allocate the $2.6 billion in federal rental assistance California will receive. The program funnels aid to both renters struggling with payments due to the COVID-19 pandemic and also landlords.
Under the measure, landlords are prevented from evicting tenants who pay at least 25 percent of their rent and attest under penalty of perjury that they have been impacted economically by COVID-19. The State Rental Assistance Program will begin accepting applications from property owners and tenants in March.
The councilmembers reflected that the city had to do more to educate its residents about the protections in place for them. “Not a day goes by that I don’t hear from quite a few tenants who feel like they’re not getting the information they need,” Councilmember Bosse said.
Deputy Director of Rent Stabilization Helen Morales highlighted a legal forum on Feb. 24 at 6 p.m. to provide an overview of the new and existing laws regarding tenant’s rights. More information is available at www.beverlyhills.org/rent.
Finally, during its Regular session on the evening of Feb. 16, the Council honored the 12 years of public service by Director of Community Development Susan Healy Keene, who is retiring later this month. City Manager George Chavez ticked through a list of accomplishments, which include updates to the city’s General Plan, improving mobility and transportation in the city, preserving the city’s history in her work with the Historic Preservation Programs. Most recently, she helped establish the Rent Stabilization Office.
But Chavez also revealed a little-known fact about Keene. “Susan has a secret talent,” he said. “She’s a stand-up comic. And she has kept us entertained her entire 12 years that she’s been here with us. Thank you for all the laughs Susan.”
“We’ve been so lucky to have you. And I hope that we haven’t given you too much new material for your stand-up comedy,” Councilmember Bosse told her.
“There’s still more challenges ahead, but I think there’s many more great opportunities. So, I thank you again for the opportunity I’ve had here,” Keene said.