Mayor Robert Garcia sat down with Business Journal editor Hayley Munguia for his eighth annual interview on Wednesday, Sept. 22, at The Westin in Downtown Long Beach. The conversation focused on Long Beach’s ongoing recovery from the COVID-19 pandemic and how the crisis has impacted all aspects of the city, including operations at the Port of Long Beach, housing construction, employment, the budget and more.
The interview has been edited for space considerations.
HAYLEY MUNGUIA: We’re in Downtown Long Beach, obviously, and you see evidence of the Grand Prix everywhere. How are you feeling about tourism coming to life and the Grand Prix coming back?
ROBERT GARCIA: I think that obviously the last, now, almost two years have been very hard. But you’re starting to see the shift back to the Downtown economy picking up again, which is mostly a tourism economy. You’re seeing hotel rooms back. You’re seeing the Long Beach Airport now, obviously now close to where it used to be. You’re also beginning to see a lot more interest in tourism and conventions over the next few years. So I think that the economy’s absolutely coming back. But we still have to be mindful that we are still in the pandemic. So how we recover safely and how we make sure that when we’re bringing folks back, it’s done in a way that’s safe—I think that’s really important.
HM: Obviously it’s hard to predict, but is it your sense that measures like vaccine requirements in bars and mask mandates are the new normal for the foreseeable future?
RG: I think we have a lot to learn over the next few months. So I think that once we hit the 80% vaccination rate, that is going to be significant. And once we know it’s completely safe to vaccinate kids in our schools, that is a huge milestone and a game-changer for us, because we know that so many kids are able to transfer it on with no symptoms. So that is going to be a very big shift for us going into this fall—is getting families vaccinated, making sure kids are taken care of, and then being cautious about not removing too many precautions until we know we have this in place. We’re not going to make that decision. That decision is going to be made by the best scientists and doctors in the country, and so we should follow their advice and their direction on when it’s safe to do so.
HM: What have you heard from business owners about these mask and vaccine requirements that they need to enforce?
RG: Honestly, I have heard about as many business owners saying they support them and saying, you know, ‘I’m glad the city’s imposing this because we felt we were going to be at a competitive disadvantage.’ I’ve had bar owners who, months ago, were asking, ‘Can you please impose this type of mandate?’ but they also didn’t want to destroy their business. So I understand the hard place they’re in.
I’ve also heard from some that don’t like the mandates. Many of them are the same folks who also don’t believe in vaccines, in some cases. So it is what it is. People have different opinions. But it’s a decision guided by science, and a decision guided by good medical advice. So I support it, and I think it’s something that not just should be done here in Long Beach and in the county, but it should be statewide or across the country.
HM: Now, moving onto some questions about development. Supply chain issues are still having an impact on construction material pricing and availability, so what’s your sense of how that is impacting development in Long Beach?
RG: The supply chain question is one that we’re actually very involved with right now. The truth is that we still have a backup of cargo because the economy’s roaring back so fast and the demand is so high. So we are working with the Biden-Harris administration, as well as the Department of Transportation, right now. We’ve had numerous meetings around: How do we get goods moving faster? Because the issue is not supply. We’re having record-breaking years.
The issue is gate times, weekend gate times, and longer hours. And the issue that’s constrained the ports in the past has not been that we can’t open terminals longer. The issue is: There has to be warehousing on the other end to actually accept the cargo 24 hours a day, and that’s currently not the case. And so there has to be a complete logistics plan to ensure that we can get cargo from Point A to Point B in a way that works. So the cargo piece is really important. It’s great for the local Long Beach economy, and it’s great for jobs. It’s great for the American economy. But we are going to have to get more creative and really push hard on making sure the port can actually get more cargo through our terminals.
HM: Right, so the port has announced its pilot program to extend hours. On the warehousing end, though, is there anything the port can do or Long Beach can do to help? Or is it just a situation where all these different pieces need to work together?
RG: Well, the federal government’s involved. This has risen—the Department of Transportation is deeply involved in this issue. So we know what our piece is, which is increasing gate times, weekends, evenings. They are also working right now with the warehousing groups. And we’re working with them as well.
HM: So while that’s getting sorted out, have you noticed a significant impact on construction in Long Beach because of these issues?
RG: We’ve been actually pretty fortunate that construction has been pretty consistent in the city. Now, there has been a challenge—certainly there were impacts on the price of steel. We’ve seen those slow down projects, but they haven’t stopped completely—the majority of the projects in the city. We’re about to open what will be the tallest building in the city. We’re building a 22-story tower in the East Village. There’s dozens of projects across the city that are being actively built.
So, has it slowed down some projects? I think the answer to that is yes. But it hasn’t had a dramatic impact on construction or development across the city. We are open for business. People are investing in Long Beach. We’re talking to investors and developers all the time, and we want to encourage more housing construction, especially, and quality office construction. So we do know the impacts have slowed some progress down, but we were already on a fast-moving train before the pandemic hit, and that continues.
RG: We’ve done a few things, particularly leading up to the pandemic, that I think are going to help us in the next few years. One of the big initiatives I proposed to the council was inclusionary housing. Now, over the course of the next few years, new projects are going to have a minimum of 11% affordable units. Every project that gets built will have an affordable component.
We’ve tried to make and create incentives for developers to build housing. You’re seeing a lot of housing construction. I think we have, either built or in the pipeline, 8,000 housing units across the city in just these last couple years. So we are building more quality housing. It’s just not enough.
And it just can’t be a Long Beach solution. It has to be statewide. So when you look at—I recently went to the Sacramento valley. They are just building all across, every which way, because they have a lot of available land. So we support that. And here in our own community, we’ve got to build in a way that’s smart and understand where density makes sense: Downtown and along the Blue Line.
But also, and I believe this strongly, you also have to preserve historic districts and residential communities. As someone that’s lived in the Downtown for a long time, I think that downtowns are built for density and public transit. And then we have amazing neighborhoods across the city that are traditional, middle-class neighborhoods, and those should also be protected. So I think there is a balance that we can find, but we have to create more housing in areas where density is appropriate.
HM: In terms of the economic recovery, business owners are still reporting difficulty hiring workers. Is that a concern for you in the bigger picture of Long Beach coming back from COVID?
RG: There is a transition happening in the workplace, and I think it’s two things. One, you have a lot of uncertainty with workers. It’s not a black-and-white issue. Workers have a lot of choices in front of them, and many of them revolve around health. When you’re a two-parent household, and one parent’s got to go to work, and the other parent is taking care of a sick grandparent or has to worry about their child going to school or doing virtually learning, different choices get made in households.
We also know that there is a shift happening around wages, and there’s a lot of workers who, because California is an expensive place to live, are making different choices about where they’re going to work and how they’re going to work. So I think the economy is shifting. I think it’s going to take us still, the better part of this year to kind of even things out. But we are making progress every month.
As an example, prior to the pandemic, we had about a 4.5% unemployment rate. At the height of the pandemic, we shot up to 15% unemployment. And now, I didn’t look at the last number, but I think we’re probably now around 7.5, 7% unemployment. So we have cut the unemployment rate in half. And so yes, there is still a challenge hiring workers, and it’s hard, and I see it when I talk to friends that own restaurants or are in retail—it’s hard to hire folks right now. But that will get better over the next few months as more people go back to the workplace.
HM: Infrastructure is, obviously, also a really big priority for business owners and residents. The City Council held a study session earlier this month about street and alley repair, which would cost about $1.8 billion to fix. What are your thoughts on how that should be funded?
RG: We have to think about what is actually happening first. So I think it’s important to note that Measure A, which voters obviously approved, is the single largest infusion of infrastructure dollars that’s happened in the city in over 50 years. So is there a lot of street work that needs to get finished? Absolutely. Are we also fixing more streets and sidewalks than we have in a generation? Absolutely.
Now, the voters have also made Measure A permanent. And so we’re going to continue to, every year, do more and more streets than we would have ever been able to do prior to the passage of that measure. So it is going to take time—cities are never completely built or completely fixed. Just like your house—you’re always fixing something. There’s always something else to do, and the same is true for the city.
What we’re focused on right now is the infrastructure bill in the Congress. Like the American Rescue Plan, Long Beach is set to benefit greatly from the infrastructure bipartisan deal that’s currently sitting in the Congress. If that passes, and I think it will, you’re again going to see significant infusion of infrastructure money to help us with roads and bridges and repairs.
HM: If that happens and a backlog still exists, would you support putting a bond on the ballot to address it?
RG: I certainly wouldn’t rule out the idea of a bond, but that still has to be well studied and developed. I think before we jump to a bond, I think we need to see what we’re going to benefit from out of the infrastructure bill. And I think that’s where the City Council is at, as well. So let’s get past this infrastructure deal, and then I think we can have an honest discussion about what a bond could look like. And if a bond is able to deliver a lot more street repair without burdening additional taxpayers, I think that’s something that we should absolutely look at.
HM: Moving onto the budget, there is a projected $27 million deficit for the next fiscal year. In this year’s budget presentation, [City Manager] Tom Modica said the city would need to think about strategies to address that pretty early this fiscal year, so can you speak to where those discussions stand and what options are on the table to address that deficit?
RG: First, since I’ve been mayor, the city has maintained a AA credit rating—AA, AA- credit rating—and has ensured that our reserves have been strong. So we have been in a strong fiscal and financial position every year. Once the pandemic hit, we spent down the entirety of our reserves, and in what I think was a responsible fiscal move, my first request to the council when we received federal funds was to not spend that money, but to replenish our reserves first. And that’s what we’re doing. So we are in a structurally sound financial position.
Now, I think almost every year that I’ve been mayor or on the council, the city starts off with a deficit. We budget, always, very conservatively. I think that’s the right approach. And by the time we pass the budget, we have solved, oftentimes half that deficit or most of it. So I do think that throughout the year, we are going to work on bringing that number down.
But we’re going to have to deal with whatever deficit we may have. I also know, though, that some other things are happening in our favor. Sales tax projections are a lot higher than we expected. Tourism and the economic strength is actually growing stronger than we anticipated. So all of those kind of economic forces that are happening right now are actually going to have a positive impact on whatever deficit we may have.
And we have to be honest: We have a deficit, in large part, because we just went through a massive pandemic. So what the federal support allowed us to do was to bridge the impacts of COVID a year so we’re not having to deal with lowering services during a health crisis. So are we still going to have to deal with this pandemic deficit? Absolutely, but I think the economic factors are in our favor, and we’ll do what we need to. If that includes continuing to lean down in certain departments or having to make sure that we’re finding other ways of supporting services, I think we’ll do that.
HM: The pandemic is still ongoing. So are there still significant costs associated with that that the city is facing that were offset by federal money last year, that might not be around this year?
RG: The answer to that is yes, and we hope that the federal government reimburses or helps, or FEMA helps out as much as possible. You just never know, at the end of the day. And you have unexpected costs that happen all the time. So during the pandemic, we spent down so much of our revenue and our reserves, hoping that the American Rescue Plan would pass, and it did, which is going to help us for what we spent down. We’re continuing to spend, so that is going to continue, oftentimes, to cause deficits.
What we’re not going to do right now is impact paramedic times. What we’re not going to do right now is cut garbage pickup when it’s already been impacted throughout the year. So we will deal with those challenges, but we’re also hopeful that FEMA and Congress and others continue to help cities and support cities during the pandemic.
HM: OK. So I have one last question for you: Your term ends next year. What are your thoughts on running for reelection?
RG: That’s definitely a decision I’m going to make in the next several weeks. I think that my focus needs to be on getting us through this pandemic, and there’s plenty of time for the 2022 election. And so I want to make sure that we are in a better place right at this moment before any sort of campaign season starts. And I know others are involved in campaigns, and that’s just not, I think, where I’m at or where the city needs to be or where the public is at. So we’re going to beat the pandemic, and over the course of the next several weeks, I will certainly have a decision on 2022.