Transcription Metadata

Whisper API Version 1
Generated 2025-02-26 19:56:18 UTC
Archive URI berkeley_9e1bb29d-63b9-437f-898d-37eaa7e13d17.ogg

Segment 1

Boarding in progress.
I think we're all ready to go.
Thank you all so much for being here.
I'd like to call to order a special meeting of the Berkeley City Council.
It's Tuesday, February 25th, 2025.
Thank you all for being here.
Can you please take roll? Yes, absolutely.
Council member Kesarwani? Yes.
Council member Wengraf? Present.
Council member Taplin? Present.
Council member Tregub? Present.
Council member O'Keefe? Present.
Council member Blackabay? Here.
Council member Lunaparra? Here.
Council member Humbert? Here.
Council member Wengraf? Here.
Great.
So we have a special work session today on the Berkeley Economic Reports update.
So we're excited to pass it over to, I think, Elmer.
Thank you so much.
Thank you.
Just getting our screen sharing going here.
Good afternoon, Mayor, members of the Council.
It's great to be with you all today.
I'm Elmer Hollander.
I'm the Manager of the Office of Economic Development here at the City of Berkeley.
I'm here with my colleagues, Redmond Cleveland, Vincent McCoy, and Jennifer Lavorne.
We're thrilled to share with you the 2024 Economic Dashboard.
This is our companion publication to our Council District Dashboard.
Both of these are posted on our website and in your packet.
In the OED Doing Business in Berkeley webpage.
So with that, let's get to it.
My first slide is on employment activity.
Unemployment is up slightly in Berkeley as it is holding fairly steady.
But jobs in the East Bay grew nine-tenths of a percent in 2024.
The three largest sectors are educational and health services, government, leisure and hospitality.
All of these sectors grew in 2024.
And smaller sectors like the architects and engineering type professional services also grew a year over year, though they're sort of smaller slice of the pie, 1.5 percent of total jobs in the East Bay.
Information trade and transportation and utility sectors experienced increases in the last year.
Eleanor, could you just move a little closer to the mic? Is that better? Yeah.
So I'll try to speak to it.
So speaking of jobs, here on the list here on the screen are the top 25 employers presented alphabetically at the City of Berkeley.
As you know, this is reflective of Berkeley's diverse economy.
We have a huge number of education employers and health care.
Highlights on the chart there.
And we have a largest private employer here.
Social service organizations, on-site housing and affordable housing made the top 25 list this year.
And I'm going to turn to Liz to talk a little bit about the hospitality sector.
Thank you, Eleanor.
Good afternoon, Council.
I wanted to share with you a couple of the key sectors that drive the Berkeley economy and how they performed last year.
So starting with the hospitality sector, it's very exciting that the City of Berkeley's hospitality sector actually performed better than our neighboring East Bay cities and even better at most times in terms of occupancy rates in San Francisco.
And I think that's in part for a number of reasons shown on the right.
So UC Berkeley became part of the Atlantic Coast Conference, which drew a number of domestic visitors.
We have a very strong culinary scene.
Hopefully, you've all enjoyed it and will continue to enjoy it.
But that culminates every year with Berkeley Restaurant Week, which we have terrific partners at Visit Berkeley, which put that event on and showcase a lot of innovative cuisine here at Berkeley.
And last year, they did fungi-inspired dishes at their March Munch Mushroom Madness.
I don't know if I got that right.
You can see it on KTVU, and that will be back March 21st to 31st, just coming up next month this year.
They also hosted the Bioneers Conference for the second time in Berkeley that drew 1,800 visitors to our downtown.
And again, that will be back at the end of the month, next month, March 27th to 29th.
So all these things, in aggregate, add up to 2.4 million visitors coming to Berkeley last year to spend a night in our town and pay an average of $187.5 per night.
And that obviously contributes to the city's tax revenue in terms of our trans-occupancy tax of around $7.1 million in revenue.
Turning now to our citywide innovation sector system, it is truly citywide, as you're seeing from this map, which can be found on berkeleystartupcluster.com.
But it shows the concentrations of different industry sectors that are doing innovative work, and where you can find them by council district and by industry is the color shown here.
So those large red dots in and around the UC campus, primarily in our downtown, are software companies.
And the big blue dot with the number 37 on it, just south of campus, that's in our own Berkeley Art Museum and Pacific Film Archive, which has been converted into the big labs.
Life Science Innovator has a number of innovative life science or biotechnology companies.
And you're also seeing a lot of the life science or biotech innovation happening in those blue clusters of dots down there in West Berkeley, alongside other big dots, which are hardware companies that are doing things with, say, computing or other types of research and development, a choir, a workshop, or lab space.
And in terms of the way that the innovation sector overall is comprised, the largest concentration of those are software, that's 35%, and then 32% in biotech and healthcare.
But I did want to point out that we have a growing slice there, that's the only slice, 15%, which is in climate tech or companies that are making environmental technologies to save the planet.
The total number of these innovation companies is over 400, and I just want to give a shout out to one of our members of our team, Rachel Arbios, who's done a tremendous job helping us collect this information, because it is very hard to keep track of startups.
They're here today, and they're gone tomorrow.
But the greatest share of those 400-plus innovation companies are really early stage, like they're developing a prototype, they're fundraising venture capital, they're coming up with a proof of concept.
And so we're a sea of young, early-stage innovators, not necessarily big corporate complexes like you'll see elsewhere in the Bay Area.
And this makes sense because we're right next to the university that has now been named for two years straight as number one in the world for producing venture-backed startups.
And this little chart here on the bottom right is showing you UC Berkeley not only has ranked number one last year for venture-backed startups, but also for the number of founders that they've produced and female founders.
So very exciting times here in Berkeley and with our partners at our campus.
And due to the capital that these innovation companies help bring into our city, 2024 was hopefully a bigger, better year for fundraising since 2023 was quite tough.
We did have more total funds raised by Berkeley companies.
That's that $1.2 billion number than we had the year prior.
But a slightly fewer number of total companies raised money.
And in fact, while some companies raised very large amounts, which contribute to that number of $1.2 billion, most of those companies raised less than $20 million.
So it was actually just a few companies that contribute to the large number.
And some of those are shown on the left-hand side of the slide, like the top deals.
I just want to call your attention to a few of those.
So Cobalt Metals brought in $537 million to use AI to explore different places for critical minerals that are going to be used for electric vehicles and other renewable energy technologies.
Twelve, which is a company in West Berkeley, splits apart carbon dioxide, turns it into a syngas or an output to other petroleum-based products and things like sustainable aviation fuel with low carbon emissions.
They raised $245 million.
And the third company shown here, Perfect Day, uses fermentation to create dairy proteins and replace traditional cows making those proteins.
And lots of other cool companies in the health care and climate tech space brought in a venture or sued capital.
But then we also had that $14.3 million number in terms of government research and development grants go up year over year.
So we're also seeing companies bring money from state and federal grants.
And six companies had an exit or were acquired.
So I would say overall, very strong year for the innovation sector performance.
Turning this to how this impacts our commercial rate and vacancy rate, you're seeing on the right side of the slide a nice map that was put together by our partners at the broker firm JLL, showing where the hubs are of life science activity in the East Bay.
And they call out a report that Berkeley is the birthplace of most of the East Bay's life science and biotech industry startups.
In fact, last year, they said that Berkeley had the most number of companies in biotech that raised money of any of the East Bay's.
However, as the map is showing, they don't all grow here at Berkeley.
So they start here at Cal, affiliated with the Berkeley Lab, or maybe they just heard that Berkeley was a place to be.
But when they start looking for space, they often find that the small space, the sort of graduation space that they find off their incubator or on-campus facility can be found elsewhere.
Like our peers in Emeryville or Alameda or San Leandro.
So because of this excitement on life science, we have seen a lot of investment in the wet lab space here in recent years.
It has created a lot more square footage of R&D space, which is why we're seeing this extremely large number of 48.6% in terms of lab vacancy here in Q4 2024.
We have the Berkeley Commons facility.
We have Foundry 31, a number of other wet lab spaces.
But they have larger flights than these small companies.
And so we actually have quite a lot of vacancy.
If we were to drop out that big commons part of the denominator, the 539,000 square feet that is waiting to be leased, you would actually see our vacancy rate being lower than you're seeing in other wet lab vacancy rates in East Bay, at closer to about 20%.
And obviously, the greater amount of LVAC is put downward pressure on the price per square foot.
So last year we were seeing it at about seven, and now it's just below renting that space.
Turning now to the commercial real estate and office space.
Again, it's not the most positive space to share with you.
We're just seeing numbers across the entire market go up in terms of vacancy of office space.
The number of offices using jobs in East Bay has not returned to pandemic levels.
It's 10,000 fewer offices using jobs.
And so our vacancy rates are up at 18% versus 13% last year.
And we are lower in Berkeley than in Emeryville, Oakland.
But we are still higher in terms of vacancy than Richmond, Alameda.
So there's room for improvement there.
Obviously, again, the high vacancy in office, that puts downward pressure on prices.
So it's a good time to be an office seeker in downtown Berkeley.
You can get a price of a little over $3 per square foot, whereas a number of years ago it was closer to $4.
Let me turn it now, speaking of who's in downtown, to Vincent.
Good afternoon.
Thank you for having us.
What I have been working on in 2024, and this is a report, and it shows kind of the commercial occupancy throughout the city of Berkeley.
And it's broken down by the various commercial districts.
So as you look at the chart, you will see there's a feature that talks about how many are in downtown, how many are in Elmwood, and throughout the city.
And what you'll notice is that the city of Berkeley has a high percentage of retail.
So 31% of the people who are occupancy are those people who are offering retail services.
The second in that category is office or other non-retail users.
Then what you'll see is that food and beverage as a percentage of Berkeley's revenue for occupancy is still at 13%.
And that concentration tends to go up as you get closer to the university because in that area you have larger numbers of students and visitors who come and want to consume the food and beverages which are available there.
So let me go to the next slide.
And the other thing that we do is look at commercial vacancy rates.
This year we enlisted the help of a couple of business or commercial districts.
They went out to help us gather some of this data.
And what you'll see is overall the citywide average dropped slightly from 8.1% to 7.5%.
But there were certain districts in the city of Berkeley where we saw an increased vacancy rate.
I'll go to the decrease in vacancy rate first.
So the decreases were along San Pablo Avenue.
They were along Solano Avenue in South Berkeley, in the university area, and as well as necessarily in the citywide average.
The flip side of that is we did see some increases.
And all of the increases can be affected by the methodology.
As an example, we looked at downtown.
We may have had 50 spaces and about 240,000 square feet, which can serve things like government offices or non-detail, which could be used to set a number up from the numbers that you see there at 10.9%.
So that's something that we continue to look at is what can we do to make sure that number has the greatest level of accuracy and the greatest number of relevance to decisions that you might want to make.
We also saw in certain areas, Elmwood, a very small increase.
You saw a small increase in North Atlantic.
And as I was going out and others were going out, we could actually see some of these spaces that transitioned during the course of the time we were collecting the data.
You also saw increases in West Berkeley and among the neighborhood commercial districts.
The city of Berkeley, a number of small commercial districts may be a block or two, such as Youthwood, where the impact of a single business going under has a bigger impact than Elmwood in an area.
Downtown would have many options, many players in the market.
And so that's really what I wanted to present in terms of the vacancies throughout the city of Berkeley.
I will tell you a little part of that, which is the sales tax revenue of how those spaces generate money to our city bottom line.
Here is just a year in 2020.
Our city of Berkeley sales tax is up.
So those arrows on the slide indicate the year trend.
This is the backdrop of the tax drop in for the state and the county.
If you take a look at the graph on right there, this is the second quarter of tax.
So April to June, you can see in 24 in the second quarter, it was higher than what was collected in 2023.
It was nowhere near the amount collected in 2022 when sort of pent up spending was at its higher points.
It's higher than where we were in the nadir of the pandemic in 2020 and 2021.
But we're just shy of sort of pre-pandemic number of what was collected in 2019.
A little bit more about sort of how our sales tax is made up in the city of Berkeley.
If you look again, this is quarter two sales tax revenue by business category.
Top line, which is green, is retail, which represents 45 percent of overall pie of sales tax.
Food and beverage is the orange line at 37 percent.
And then services is the yellow line, really decreasing.
Looking at that includes things like transportation services, which includes fuel price and gas stations.
So that explains the dramatic drop there.
Turning a little bit to housing and institutional building and the sort of pipeline of what's coming.
Institutional education and development.
Right now, UC Berkeley will soon be the largest rate payer in our downtown Berkeley Business Improvement District.
Just taking a sort of swing on the slide here in clockwise order, you've got the Anchor House that just opened for transfer students.
You have the labs, which we talked a bit about.
It's very occupied and busy.
We've got a couple of projects under construction.
There's the Gateway Center office there.
And then the proposed UC Innovation Zone in Oxford.
And then, of course, in the right-hand corner is another educational institution, Berkeley College, that is under construction that I'm sure we are all quite familiar with at Novi.
Housing and development.
In 2024, 1,600 units were approved in 13 distinct projects.
A couple of highlights here.
The building opened on Chattanooga Avenue, and 2020, the university submitted for entitlements.
And if approved, it would join a number of extra-tall buildings in the downtown along our major transportation corridors.
Looking at housing costs, the median sales price for a single-family home in the city of Berkeley as of November 2024 was $1.4 million.
On the chart there, second only to Piedmont, 2.9 as the median sales price for a single-family home.
Though the prices increased, volume softened quite a bit, down 12 percent, and rents slightly increased.
That's the red line on the map with the dots.
So if you'll indulge us, we want to spend just a few minutes in concluding our presentation, talking a bit about Office of Economic Development's efforts to support our diverse economy here in the city of Berkeley.
And I'd like to start with our loan funds.
I don't know if you all are aware we have loan funds in the city of Berkeley.
Our RLP, Resiliency Loan Program, that was seeded by a CARES Act grant during the pandemic, and our Recovering Loan Fund that has six loans in its portfolio here.
We're always looking for new opportunities to lend these dollars to Berkeley institutions and businesses.
And so if you have referrals for us, we are certainly welcome to engage with those clients.
One of the things we do is we provide support to the commercial district of the city of Berkeley.
Within the city of Berkeley, we have different types.
We have the rental bids, we have commercial districts, and we have associations.
And what we try to do with our work is provide support for each of those.
One of the things we convene is the Berkeley Business District NET meetings, which Rachel coordinates for us.
And what those meetings would have allowed us to do is bring the different commercial districts together so they can tell us what some of their priorities are, what challenges they face, and how the city of Berkeley can help them better serve in their neighborhood and attract people.
And at that point, one of the things that we've done is we have some common themes which are running through the commercial district.
One is each of them want to be able to attract more businesses and attract more customers and create a unique identity which draws people to their community.
A second is that they want to prioritize what they're going to ask of you.
They want to be able to come to the table with a short list of high-value priorities that you can act on.
And so they've mentioned this to us.
A third is they want to create safer, more attractive environments, dealing with things like greenhouse, dealing with issues like trash, dealing with issues like parking.
So those are some of the issues which have come to our table, which we're sharing with you, so that you can have an idea what the commercial districts throughout the city of Berkeley are looking for.
And probably the third thing that is coming up is we have a number of them which are looking at renewals, looking at strategic planning, because they're looking at the long-term, and they're trying to come up with plans for the long-term that you can support as council members and the mayor.
Okay, thank you.
Thanks, Vincent.
Speaking about marketing our different districts, we continue to run our hashtag Discovered in Berkeley Marketing Campaign.
If any of you are not familiar with that, I hope you'll take your phone out right now and follow us at Discovered in Berkeley on Instagram.
Or any time you're at a really cool Berkeley business that inspires you and seems aligned with Berkeley values, go ahead and use the hashtag Discovered in Berkeley.
But we started this campaign in 2019 to make our community feel really proud of the incredible businesses that they can discover in Berkeley, as well as the innovative discoveries that those innovation sector businesses that I mentioned earlier are discovering here.
So 2024 was another strong year for the campaign.
We featured companies that were enabling venture travel, producing beloved baked goods like scones and bagels.
We featured a company that is making an induction stove that can also have a backup battery.
We featured others that are curating tea ceremonies with tea imported from Asia.
And so all of these together over the last several years have led to more than 4 million impressions and 180,000 concrete engagements.
And by that, I mean somebody who liked the post, who read the article, who shared it with a friend, who did something to really absorb the content that we're putting out there.
And you can see other campaign messages here or inquire about those later.
But I did want to mention that the Copper Induction Stove Company was our most viewed article in our slot this year.
And it also had the most ad clicks.
And that company thanks very much for the promotion of their stove because it helped generate some sales for them.
And then Berkeleyside, which is our key partner in putting together the stories and their ads, told us that folks are really gravitating toward these stories.
They're actually the most viewed stories of all the sponsor stories they do.
So we're excited to continue that campaign and always welcome ideas for new content.
We also continue to support businesses to operate in a more environmentally responsible manner.
We partner with Alameda County Green Business Program through the banner of the broader statewide California Green Business Program.
And they are the ones that put in place the standards that a business must adhere to to get the green business certification.
And so we were able to certify eight new green businesses in 2024 and get 10 businesses recertified.
We're talking to a grand total of 79 businesses today that are green business certified in Berkeley.
And 171 have expressed interest in the program.
So I guess this is all thanks to the Green Business Program.
We also continue a partnership with Berkeley High School and the Cal State University Institute for STEM Education under the banner of Berkeleyside Green Business Program.
And we're excited to continue to support businesses to operate in a more environmentally responsible manner.
And so we're excited to continue to support businesses to operate in a more environmentally responsible manner.
We're also excited to continue a partnership with Berkeley High School and the Cal State University Institute for STEM Education under the banner of Berkeley Startup Clusters, Berkeley Ventures, Berkeley Values Initiative, which was focused on making sure that our tech or innovation companies grow in a way that benefits our entire community.
a few years ago, where we take Berkeley High School kids out to see actual companies that are innovating and how their STEM skills can be applied in the workplace.
And just last year, we enabled 125 student visits, including kids from the National Society of Black Engineers, Jr., and the Hispanic Engineers and Scientists Club at Cal, as well as the Biotech Academy, on seven different STEM tours, which I want to take a moment to thank those companies that hosted last year.
They include Acorn Technology, Stillwater Sciences, UC Theater, Microbuyer, Terra Energy, TDK, and ArmorX AI.
And we are currently looking for hosts for 2025.
We just did two great visits to Skydeck and Harbor.
But if you know companies in your district or that you're connected to, if you're listening online or in the classroom here, please send them my way because the kids love to be inspired.
Speaking more about things that we do to support equity, we've partnered tremendously with the Berkeley Chamber of Commerce over the last year to make sure that all of our zoning rules and processes for getting a business license and what it takes to get permits is better communicated so that anybody can understand what it takes to get a business or invest in Berkeley.
One of the things we worked with them to communicate on was two major efforts we led in 2024 to improve our land use policy and to streamline zoning for Berkeley businesses.
So that was one category of updated rules that were supporting restaurants, bars, and entertainment businesses.
And then another under the package called Innovation in Berkeley, which made it a lot easier for research and development companies to locate near campus for a range of the activities they conduct to take place here in Berkeley.
And so again, by doing webinars, working through the chamber, e-communications and their newsletter, any way we could get the word out, we try to tell people it's not hard to do business in Berkeley.
They can now go to the new chamber Doing Business in Berkeley webpage, download any of the materials that you're seeing here, or listen to the webinar on getting a business license.
We also continue our partnership with Project Equity to help businesses with sustainable planning and more specifically their transition to be worker-owned.
And last but not least, I'm going to turn it over to Jen to tell us the amazing work we're doing for arts and culture.
Thank you, Liz.
Good afternoon.
So in addition to business services, Office of Economic Development also houses the Civic Arts program.
I think it goes without saying that Berkeley values the arts, and not only do the arts improve the livability of the city, but the arts are an important part of Berkeley's economy.
And to that end, the Civic Arts program helps support Berkeley's arts community through grantmaking.
In 2024, we awarded 111 grants across four categories, totaling $760,000.
And I want to highlight that we received funding last year from the National Endowment for the Arts.
That was our second year of being awarded funding from the NEA.
In our first year, we received $30,000.
Last year, we received $40,000.
And combining that with the required local one-to-one match, we are able to invest even more in Berkeley's arts community.
So in 2024, we were able to invest an additional $60,000.
And this fiscal year, we will be investing an additional $80,000.
In addition to grantmaking, we also support our arts community by working on reports and studies.
And in December of 2024, we entered into a contract with a consultant.
We will be conducting a new study for the economic impact of the arts in Berkeley.
And we are currently moving through procurement for a consultant to work on a plan for a resilient sector here in Berkeley.
Okay, so in addition to grant, we also have a public art program.
And in 2024, we completed two major public art projects.
The combined budgets for those was about $700,000.
Those are pictured here.
On the left is a sculpture by Mildred Howard.
And that is installed at the intersection of Adeline and Martin Luther King Jr.
Way.
And the center image is from the dedication event, which took place Juneteenth last summer.
And on the right is a mural installation that was fully restored.
That's at University and First Street.
And that is the city of Berkeley's Amtrak stop.
So right now, we've got about 18 projects that we are actively working on.
We have 14 projects on the work plan.
And we are also caring for a collection of about 100 works.
And with that, I will pass it back to Amber.
Well, thank you very much, everybody.
I really appreciate you spending a little time with us and hearing about some of our programs and looking at the data from 2024, the website where you can access all of these reports in more detail is over there.
And I also included your email address.
We welcome anybody to reach out.

Segment 2

Questions relating to cultural or commercial institutions in Berkeley.
Thank you so much for coming and for presenting to us.
I know I need to take a look at the comments, so I want to make sure if there's anyone, some folks are moving up.
Go ahead.
And just to be clear, how much time do we have for commenters? There are fewer than 10 commenters, each one receiving 2 minutes.
And currently it looks like a couple in the room and one hand raised on currently.
Yeah, I don't think we even need that much.
Thank you.
So as far as, thank you, as far as business district vacancy rates, I think it would be helpful if we knew the boundaries of every district as it's listed here.
Because it could be confused.
I mean, there's some that would overlap.
Second, and thank you for the excellent presentation.
But second, where there is a significant increase or decrease in vacancy rates, it would have been interesting to hear why that was.
Thank you.
Thank you.
I would just want to say, you know, we're hearing a presentation at the time that we're realistically hearing of that could potentially be at risk.
So I'm interested in some of these positives.
Thank you.
Commenter? John Koehner, Downtown Berkeley Association.
As I've shared with several of you, the downtown vacancy rate with adjustments is actually 28.2%.
That's due to the removal of about a million square feet on commercial uses, parking garages, Berkeley High School, et cetera, and including vacancies due to pen development projects.
As you know, walking through the downtown, just intuitively, it's a lot more than 10%.
We have 16 stalled housing projects in the downtown with 2,900 units.
They are not pen-slinging right now.
Rents are down at least 20%, as high as 40%.
Interest rates are high.
Construction costs are high.
I've been talking to developers.
Every week it's both Jordan and Eleanor and others.
And they're all on hold, which is a real shame.
So this is a big problem.
We've got 28% visually.
How we calculate or what we state visually when you walk around downtown.
We are working with OED and Councilman Tregeb's office to improve the situation but may need your help.
We have a massive project, the Walking Center Street, Painting Center Street, Window Film, Council Member Harrison, an item that didn't get passed, $100,000 for Window Film, storefront art, pop-ups, broker roundtable we're going to do with Eleanor and Jordan next week or the week after, looking at ways to expedite the process.
A field trip to San Francisco.
I have a matrix.
I've worked with some of you with 11 programs in San Francisco that include everything from pop-ups to storefront improvements.
We need to build a barrow in steel.
Some of them are not cheap, and obviously we're very little budgeted situation.
We need to look under every stone.
Also, homelessness and mental health issues, as everybody knows, are paramount.
There's going to be a meeting tomorrow, but it's in the park, which impacts our downtown.
And also safety ambassadors have been proposed, as well as security cameras.
So thank you for your consideration.
Hopefully we will be back.
I want to thank Eleanor and Kim for doing a great job and the partnership with them and Igor and his staff.
Thank you.
Alex Knox, Executive Director of the Telegraph Business Improvement District.
And along with John, I want to emphasize and elevate the needs of our business districts in all of this.
There's clearly a multifaceted economy in Berkeley, a lot of different considerations.
But our core districts do, you know, there are some serious challenges, and they do need to maintain priority with you all and the work that we're doing.
We are focusing our efforts around placement, around brand development, activations, business support, and traction.
I think Vin summarized a very nice list.
Our work around clean, safe initiatives, long-term planning, absolutely sort of prioritizing our work.
And the truth is, too, our numbers on the ground today, as you can see, are slightly better than what was from when the data was collected.
So it's sort of a wash as far as vacancy rates year over year.
But, you know, it's not that different from what John was describing.
The reality of vacant spaces, the vacancies in buildings that are being held up for any number of reasons, and, you know, it seems like more than it is.
But the challenge is I wouldn't want you to look at that under 10 percent vacancy rate and think it's not serious because it's actually has a larger outsized impact than what it seems.
We are absolutely standing with economic pressures and trends that are eroding the viability of retail and the success of our core commercial districts.
This is not unique to us or to Berkeley.
As you know, this is an issue that is plaguing everyone in the place management industry.
But I think that through giving serious thought, what I would encourage you to do going forward is really give serious thought to these challenges that are faced by our business districts and prioritize the opportunities to invest in them and the work that we do is doing.
So, yes, I'll wrap it up and say thank you for the report.
And we look forward to working things together through the rest of the year.
Thank you.
Thank you so much.
I know we have one person online to make sure public comment is limited to items on the agenda only.
Thank you.
Our next speaker is Kelly Hammergren.
This may sound off topic, but it is on topic.
We are in a rapidly changing world.
This morning my business club met and changed our selection.
It was an unexpected choice.
And this selection we made was American made, what happens when work disappears.
And what made that change is one of our Berkeley members said that four of her neighbors lost their jobs this week.
I know there isn't a back and forth with attendees, but my hope is that you as council members will express that our experts in the room and how the current gutting of federal employees, federal funding and grants might impact Berkeley and how that will impact our economic outlook for the city in the coming months.
So that's really the thrust of my comment.
Please have that discussion.
Because I really couldn't get the feel of that from the presentation or the documents.
Thank you very much.
Thank you.
Are there other comments online? That was our last raised hand in Zoom.
Okay.
Well, then I will move on to council comments.
All right.
Council member Joplin.
Thank you.
Thank you so much, OED team.
I'm really encouraged to see the sales tax revenue on the rise.
I'm glad to see hospitality doing so well and beverages.
As you know, I'm very proud of both our arts and innovation ecosystems.
I look forward to working with all of you to keep our R&D company and arts works here in Berkeley.
Thank you.
Thank you.
Thank you.
Next is council member Beck.
Thank you.
First a comment, just to thank Vincent and the team for helping me and pitching in on the mighty Northside neighborhood area, the biggest undiscovered gem in Berkeley, just to be very selfish.
But the one business area is 6, so I love it very much.
I give it a lot of attention.
But anyway, thank you.
I look forward to working together with you on that.
Certainly the innovation ecosystem is near and dear to my heart.
We've talked about that.
And you commented on, you know, we have so many advantages, proximity to UC Berkeley, all the smart people from that institution, proximity to San Francisco, proximity to Silicon Valley, but also separateness from that.
We have a lot of kind of unique advantages.
Any thoughts, ideas, recommendations? What more could we be doing to encourage that growth and encourage those companies to stay here and not go to Emoryville, not go to Alameda, not go to San Luis Obispo? How can we foster more of that environment? I would love any thoughts or ideas on that line.
Yeah, go ahead and answer.
Thank you.
Thank you for that comment.
We look forward to the partnership with you.
We're really excited that we actually passed a lot of the policy that was recommended by our Berkeley Startup Cluster advisors in the last few years.
So it's a good time to start thinking about what's next.
And we actually have a Berkeley Startup Cluster advisor meeting coming up on March 12th where we'll be asking the very questions that you asked.
But I think there's a couple questions that come to my mind just on conversations that we've been having.
So, one, I think we've discussed a lot already, but opportunities for pilots, especially in things that are aligned with city priorities like carbon emissions reduction and climate adaptation.
I know there's a lot of hungry startups out there coming up with solutions in that space that would love to pilot their technology here in Berkeley.
So that's one opportunity where we figure out procurement and liability risks associated with that and what's possible on that front.
Second area is how do we get our building stock in alignment with the types of research development or office space that young startups need.
And so I think I alluded to this in my presentation, but we have a lot of large facilities with floor plates available today looking for tenants.
And we have a lot of small companies looking for very small plate-sized chunks that they can graduate into.
And so we currently have a bit of a mismatch in terms of what's available and what's sought after.
And so those companies end up finding more flexibility and options in Emeryville, Alameda, where they have things like the Grad Labs concept that was put together by one developer where, you know, you can get a few thousand square feet, and if you need a little more, you can add on, as opposed to signing a monthly lease for 20,000 or more square feet, which we're not quite ready for yet.
And then I think we think about the university is doing a lot to support innovation, entrepreneurship, and investing in the Baker Climate Labs and a number of different programs that will support entrepreneurship on campus.
And the question is, how do we translate that into real economic value for our city? And I think it theoretically is more clear, like we have an engine of innovation right next door.
But then if those things are happening on campus or if they graduate and then they go to Alameda or Emeryville, when do we actually benefit from that innovation as a city if we're not doing pilots, if we're not capturing them in our office and wet lab spaces? Those are some of the things that I think are top of mind for me right now, and I welcome any other ideas from you, any of the council members, or others that we'll hear from at the advisory group meeting.
Yeah, I totally agree with you on the pilot.
We talked about that.
I'm really looking at figuring out a way to work with that, because I do think the city, being a customer of some of these new technologies, in a place where it makes sense, consistent with what we're doing, what the departments want to do, making sure if there's friction in that process, we remove it.
I look forward to figuring that out.
Thank you.
Thank you.
All right.
Moving on.
Oops.
Oh, no.
I'm so sorry.
I just pressed the reset button.
But I think either maybe it was Council Member Hart that was next, and then Dartlett.
Thank you.
Thank you, Madam Mayor.
It was me, but I'm not sure.
As always, and I've heard these reports, I want to thank staff at OED for your great work, for Rockstars, but really everyone in the department.
I think we're kind of unique in getting much useful insight and data about our local economy as we do your reports, and we're really lucky to have both a strong economy and dedicated folks like you to retain our businesses and keep us abreast of their work and the health of our businesses.
One thing I noticed with asking rents for studio apartments increased just a little under 2% year over year, 1.7%, I think.
I have two questions.
Does this account for unit mix? Does it account for the balance of new versus existing inventory on the market? I can answer that.
Sure.
No, it doesn't.
This is just average studio apartment, just to get a picture of trends.
When you start getting the unit mix, the number changes quite a bit, and it's hard to see, and it's sort of a clear format.
So this is sort of a high-level view of where rents are, but not the granular detail you're probably looking for.
A glance.
Thank you.
And this increase is less than inflation.
Is it, in your view, an indication maybe rents have stabilized? They're going up less than the inflation rate, and maybe that has something to do with the increased supply of housing.
I don't know.
I don't know.
I don't know.
But anyway, that's kind of a softball question.
I think you might be on the right side of the table.
You can do the next report with us, but that's a good analysis.
Okay.
Thank you.
That's all I have.
And thanks again for the report.
Thank you.
I believe that Council Member Bartlett is next.
Thank you, Madam Mayor.
And thank you once again for great work, as always.
Thank you.
So starting with the ground-floor commercial vacancy rate, the decrease in some of the communities, like South Berkeley, for instance, it's a pretty dramatic decrease from 2023.
19.9, 19.2 percent, 10.9 percent.
That's probably an outlier, right, the 19.2? 19.2 percent.
19.9.
But noting the decrease, I'm wondering if the decrease is due to sort of office uses and, you know, architecture firms, things that are not in neighborhoods serving ground-floor retail.
Any insights on that? There are a couple of things we can note.
One is that there were a number of properties here that were listed as commercial, which were actually residential.
And so we lost some properties there in the vacant because we don't have the residential vacancy.
So there were a number of those that did happen.
Operating as businesses, but may not have had a license.
But as we went out and surveyed, I noticed, like, a couple of the avenues, like Sacramento and a couple of other places, and I saw a business there.
And then I go and Excel our database and find out that maybe they didn't have a license.
Now, we're not the enforcement people.
So that's something we need to kind of clean up in the city of Berkeley is making sure that we track those who have a business, are operating, and who have a license, as well as keeping track of those connections from commercial to residential.
I can also add, I just wanted to invite everybody to the companion location, which is the commercial dashboards in detail that cross both.
They have a map that represents the boundaries of the districts.
And then this is the sales tax, the business mix, and the vacancy rate over time.
And so you are right in South Berkeley, there are a number of parcels.
If a large floor plate changes from vacant to not, that really can affect your percentages in a dramatic way.
Great, but again, we're happy to dig into the data and district however you all wish.
But I think taking a look at publication might be very helpful.
Okay, great.
Thank you.
Because just anecdotally by myself, I just perceive, you know, not necessarily a trending trend, but more, more ground for professional services than I'd like to see it.
We need walkability.
We need more neighborhood serving retail.
We need the cultural component of our retail environment.
And I think that's the larger context here is we need to figure out a way to incentivize and promote lowering the rents, essentially, in these retail spaces, so that anyone can start something up and sell clothes or whatever, something for the community to enjoy.
We're about to lose our key hardware store in South Berkeley, too, and there's nothing I can say about it so far.
The family, the business, it's going to be a big loss.
So moving right along, the public art.
You're welcome to open your comic book store.
We're ready.
Yeah.
If they lower the rent to 600 bucks a month, I have a lot of comics.
It would be great.
But the public art piece in a similar vein is another really important element here of cultural vitality and economic growth as well, because they attract people, people nearby engage in commercial activity, et cetera.
And so while we are approaching some budget headwinds pretty importantly this year and the next year, there is an avenue of free public art.
There are plenty of artists that would love to store their artwork on our streets, large pieces.
So I do want to encourage you to explore that as a way to generate more activity in the community and the results in economic benefit.
It would be wonderful.
Cultural expression.
And I think those are the bulk of my point I'm covering.
Thank you.
Thank you.
I think Council Member Traylor might be next, if that's all right.
Yeah, thank you.
Thank you.
I was intrigued that there is an application for a comic bookstore.
Perhaps I can go in with you.
I'm sure people would buy comics about the City Council.
Anyway, I'm done.
Stick to my day job.
Thank you so much for the presentation.
This is the first one I've reviewed on the dais and just really appreciate the attention to detail and all the hard work this has taken.
I have a few comments, and then I just wanted to maybe ask staff a series of questions.
Well, really, it's more just I wanted to invite staff to expand on some things.
And so I will start with, I was, you know, to Kim's comment about the federal government right now.
It's really terrific, and this has worked for 12 years in the federal government.
We all know people that have been impacted by this, whether we ourselves have worked there or not.
I, unfortunately, you know, don't foresee a lot of optimism on the macroeconomic level, at least in the near future.
I'm bearish on interest rates, which then, of course, are directly related to vacancies, particularly for cultural development and life sciences.
So that's unfortunate.
That's the reality in which we're able to operate.
There is a lot of labor becoming available right now in these highly technical areas.
In particular, folks that had a job in the federal government two weeks ago and now don't.
We as Berkeley need to be thinking about how we can be poised to help businesses that can capture talent and care.
I wanted to also spend some time talking about, I know you have a small and mighty staff.
You can't be everywhere at once.
And I appreciate the focus that you've had on R&D.
In fact, I wanted to ask, I co-sponsored an item with then-Mayor Eberstein last year, as you know, to update BMC 7904165 to exempt the taxation of business gross receipts relating to philanthropic and government resource and development grants and public interest.
I wanted to see if the impact of that change or other changes has been making a difference, a positive difference, or if it's too early to tell.
I did want to better understand how small businesses are doing that may not be in the R&D space.
From the flower shop that has a little booth in downtown Berkeley, where we've been working closely with the administration to help them get connected to power so that they can run power, to the discussion that we've been having with John and staff, certainly around what can be done with these large storefront vacancies to provide them and to allow for smaller businesses to introduce other flexibility, bring in some pop-ups.
Sorry, Council Member, if I can, just so we don't lose the value of your questions here.
You're asking about your previous item and then also what's being done to support small businesses.
Yes, that's question number two.
I'm almost done.
Number three, and I know we've been already working and will continue to work to see what can be replicated from San Francisco's vacant to vibrant programs.
I wanted to ask if you have observed any initiatives that other neighbors, not limited to us, might be doing where that creates a more competitive landscape for businesses than they do in Berkeley? Are there any quick win policy solutions that may or may not require Council action, if you're able to speak to that? I think those are my questions for now.
That has been a point of, you know, obviously I'm concerned and we can't bury our head in the sand.
We have to keep figuring out what we can do and really focus on areas that are within our locus of control.
It may not be macroeconomic forces to keep interest rates high, but are there any quick local solutions that can be implemented fairly easily and affordably that would make a big difference? And that will continue to be my focus, certainly the focus of my district's office.
I look forward to working with you and my colleagues on that.
Thank you.
We heard four questions, I think.
The first one was about the federal government.
I do want to point out that this dashboard covers just the year through 2024.
So that's the response to your first question.
The second one, Liz, will manage how the R&D grant labor plan is going.
And then your point about the vacancy and the ideas of other neighboring jurisdictions that might have adopted new policy procedures.
We very much look forward to collaborating with you and your office and the council and our downtown partners on coming up with innovative solutions.
I would hope that we can discuss some quick wins.
We might have some other work to do, but we're very excited to tackle this challenging issue.
So R&D grants? Sure.
Thank you.
And we were really excited that that passed unanimously and your co-sponsorship.
We've definitely heard anecdotally from a number of companies that thought that was the right thing to do.
As I grow here, this makes Berkeley more competitive.
I've had conversations with a number of professors, postdocs, people in the last few weeks that were, oh, my goodness, I can't believe how much I would have been taxed if I was to start my business here and get a BIR grant.
And now that I have it, I would feel more comfortable launching it.
So those are anecdotal.
The actual hard numbers is that we did receive applications approved for 15 companies last year.
And I think based on my knowledge, that's not all ones that earned a grant in 2024.
They might have earned the grant in the prior year but just drew it down against our gross receipts.
But I would say in terms of the impact it's had being anecdotal, I believe it's been really valuable for our office in going out on a road show, as you will, and encouraging people to get a business license and be able to offer it, not just the sticks.
We got in the Big Labs newsletter to all their tenants a reminder about the business license requirement and the renewal process.
Then, hey, if you got an R&D grant, apply for that waiver.
I went and spoke to the Cyclone Road cohort of Activate Berkeley Lab a week or two ago.
Again, was able to promote all businesses doing business in Berkeley must have a business license.
You're getting an R&D grant.
You can apply for this waiver.
And with Skydeck, so it's really an opportunity for us to promote the business license program.
And I believe I actually know anecdotally again that a couple of companies, oh, you came and spoke.
I didn't know I needed a business license.
So it's given us sort of another opportunity to remind them.
We didn't do that before, but now it's just like news to bring that up to them again.
So I would say it's definitely having impact.
We've had a lot of calls from businesses.
We've been commended for that leadership.
And I actually was just putting together some slides about our Berkeley Startup Cluster Advisory Meeting.
We got a lot of press from that.
There's been a number of publications, the San Francisco Business Times, I believe, the Mercury, what else, Journal News.
Yeah.
And then one or two other real estate publications have all listed in there that Berkeley made great strides to support its innovation sector by exempting R&D grant.
So I think it's very strong for our reputation as a city that supports us to grow here.
You asked a question about more general small businesses.
And among the things that we're seeing when I work for the business commercial district is they're looking to, as I mentioned, some of the attraction to make sure that they get more track, they get more reason for people to stay.
And so what they're seeing is a little bit of a decline in certain areas in their sales per visitor.
But if we can get people to stay longer.
And so they bring up a lot of different issues.
Easy part, as people are looking to start a business, they want our licensing process to be faster, intensely faster.
They think getting an answer to a question about your business license needs to be faster, needs to be more straightforward in the city of Berkeley.
We put together an effort last year.
I know Liz was one of the champions for this in our business licensing.
But we can still make that better and faster for those businesses because for them,.

Segment 3

Business License Improvement, and we're going to be talking about how we can make this process a little bit faster with money.
And each week, or each day, they have to wait to get an answer to something like getting their fire permit approved or getting their business license approved.
That's costing them money, and so I think the best thing we can do in terms of the generic business environment is to make it faster, and one thing that's talked about in terms of, say, downtime is, as developers are creating properties, we need properties that have shared facilities.
So I'm a small business.
I don't have to put in my own bathroom.
I don't have to put in my own this, that, and the other.
Rather, I can have a shared space, and now that large space can be home to many businesses versus having to find that ideal client who can occupy 5 or 10,000 square feet.
So those are some of the things that we're seeing and some of the ideas we have about how we can make it a more friendly environment for small businesses.
Thank you so much, and look forward to continuing the collaboration.
Thank you for the questions and for the answers.
We're moving on to Member Lenapara.
Thank you so much, and thank you for the thorough presentation and for all of your hard work.
I just have one question around California Green Business Program.
I'm just curious how a business can get Green Business certified.
What the process for that is and the requirements? The Green Business website, if you just go, I think it's greenbusiness.org.
But if you type in Green Business Program, Alameda County, you can just literally press interest.
And the consultant that works with the office is a wonderful woman named Rylan.
There's another person named Lauren, and they are on it.
They will fill up right away and go meet with that business and do an assessment of their water usage, their energy usage, their fuel usage, their waste diversion.
And then there's a number of other things to do, like how do they educate their employees and a number of factors related to sustainability that are not just really easy to calculate metrics.
But they have a long list, and it's also sector-specific, so they're not going to ask a restaurant to do the same thing that an office building would need to do.
And so they'll tell her, they'll work with that business.
There's also tiers.
There's like an inner tier, and there's a basic tier.
There's a lot of different ways to become a basic Green Business or a business that excels at being green.
And so I would really just encourage anybody who's interested.
That's why we have the larger number of interested ones and ones that have asked for Green Business certification.
And so I would just encourage anybody who's interested.
That's why we have the larger number of interested ones and ones that have actually gone through with it to at least put their name and information in there and step down the process.
And then the last thing I'll mention, there are incentives out there from East Bay, Municipal Utility District, PG&E, other state incentives to help with, you know, changing to LED lighting or, you know, low-flow showerhead or toilet.
And so I would just encourage anybody who's interested to check up what those incentives are so that they can offer some compensation for businesses that want to make the capital investment.
Great, thank you so much.
Yeah, thank you.
Council Member Keefe.
So the worst thing in Berkeleyside is that store they post every month of all the businesses that died.
And I'm wondering, you know, we've talked a lot about vacant storefronts.
We haven't talked a lot about the actual, like, loss of business that creates the vacant storefront.
And I'm wondering what kind of services you provide or what strategies you have to actually, like, maybe save a business that's about, you know, if you can give them assistance if you provide something like that.
So that's a tough one.
One of the reasons is that when businesses are struggling, they tend to get quieter rather than louder.
So they can't from Berkeleyside until they turn off the power.
So one of the things that we're trying to do with our engagement with the business commercial district is keep an eye on what's happening, get more people to show up.
As an example, I was in the district, which commercial district only three members and have nine because each can nominate someone.
The more we can get businesses in those rooms, we can hear more about what the challenges are and where businesses start to struggle.
And one of the things that we do last year and the year before is we got the chance to help us to do more workshops.
Workshops on social media, social workshops on how to do business with the city of Berkeley as a contract.
And so we're trying to get more information out there to the community that they can take advantage of those resources and that information to make better decisions.
Another thing we do when businesses are coming to us, trying to figure out what our location is, we help them get data about what locations might be desirable or less desirable for business operation.
Yeah, it's a tough one because sometimes when businesses struggle, they stop talking until it gets to the point where they're about to go under, then they get louder because they're at the last end of the rope.
And the other thing is going out to the Euclid business district, looking down with them and figuring out what those issues are so we can bring to the table that can help.
And in their case, one of the biggest issues was, what do they do with trash cans? Because they couldn't do with their trash cans, the street didn't look appealing.
And so UC Cal has worked with them and talked about, we can, if you put them in the back, and our waste management division will come and pick them up from the back.
So now the street will be cleaner, be more attractive, and that will make their ability for better sales happen.
And I just want to highlight one last program.
We mentioned it earlier about Project Equity.
It's a group that works on both helping a business with succession planning.
Maybe a business owner is getting tired, retirement, doesn't want to pass it on to their family.
It could be a variety of issues that lead to a business deciding to close, which is very sad.
You are absolutely right.
And so that's what Project Equity is.
And so Project Equity helps them sort of make that value assessment, and whether it's a good opportunity to sell that to the employees that work there and become a worker-owned cooperative.
That's a service that's available to Berkeley businesses.
And so if there is a business that maybe is getting quieter and maybe is struggling, I would also encourage them to come to us, that OEC mailbox at berkeleyca.gov, and we can get them in touch with Project Equity.
I just like to add, you know, all of us, even Brent, we all have businesses in our district that we want to advocate for.
And it would be really nice if there was some kind of, like, coordinated messaging that we could give to our constituents or, you know, work with our businesses.
If we could just let them know, you know, the Office of Economic Development can do this for you if you ever need it.
If we could have some kind of messaging, that would be great.
Maybe it would connect more businesses with you guys before it's too late.
Please do make all of your business owners aware of the Office of Economic Development newsletter.
So we put that out quickly.
And then there's an Office of Economic Development webpage on the City of Berkeley site.
And then we also have a one-pager that we can send electronically to you or to any of you.
You're welcome to share that, but it explains the types of support services that the City of Berkeley has.
Make sure that that's available to you.
Okay.
Any other comments? I just want to make some brief comments just to say thank you all so much for your work.
I know that you're out there on the street talking to businesses all the time.
And I just want you to know I hear from businesses often how the changes that you've made, you know, in terms of land use and in terms of, you know, making it easier to navigate, how to get your business license, things like that really does help businesses.
So thank you so much for that.
We really love that we're creating more of a startup culture here and trying to provide space and thinking about longer-term growth as Black can be brought up and provide things like loans and connections to become a green business.
That's so important in terms of our values here in the city.
And I would love to see more businesses get involved with the Green Business Program.
I'm a big supporter of the discussion in Berkeley and using that hashtag.
So I just want to highlight that for all of you, for your folks, to make sure that you're using that Discovered in Berkeley hashtag so it can get shared.
And, of course, our arts program.
I just want to say thank you so much.
I really love the piece of Berkeley, and, yeah, I'm very excited for the work that's being done there.
So thank you all so much, and thank you, everyone, for your comments.
I appreciate it.
Is there a motion to adjourn? So moved.
All right.
And unless there's any objection, I have this listed all unanimously as ayes.
Okay.
We are adjourned.
Thank you so much.
We'll be back for the council meeting at 6.
Thank you so much, everyone.
Boarding stopped.