There was a bit of math involved in Mayor Carolyn Petty’s State of the City Address Thursday evening.
Toward the end of her presentation, the mayor discussed the future of a parking lot on 11th Street in downtown Hermosa Beach. Petty, who comes from a finance and accounting background, forecasted potential revenues to the city from three different uses of the land: as is, as office space, and as a hotel. She then plotted the options on a graph, with “Impact” running along the x-axis and “Revenue” along the y-axis. The point representing the hotel scraped against the top-right edge of her Powerpoint, while the dot for an empty lot lingered at the bottom left, with office space not much beyond.
The relationship was clear: projects with greater impacts — think traffic and noise — have the potential to create greater revenue for the city. And though the mayor set up the problem, she made clear throughout her speech that in 2016 and beyond, it will be up to the residents to solve it.
“Fifteen years from now, we will still be the ‘Best Little Beach City,’” Petty said in her opening, referencing the city’s Vision 2030 plan. “But how do we maintain that vision as our community changes?”
The idea of careful deliberation over how development will shape Hermosa’s future was the theme of Petty’s address, and the selection of a hotel to emphasize both potential and pitfalls was hardly coincidental. Discussion of a hotel on 11th Street began almost two years ago, when OTO Development announced plans for a site there. Meanwhile, H20 Hermosa, at the corner of 14th Street and Hermosa Avenue, broke ground last week. And, while the Strand and Pier project is still several years out, Petty said it would be a “catalyst project” that would “transform” downtown Hermosa.
Anticipating that added parking difficulties would be among the first objections to such projects, Petty tried to reframe the issue.
“It’s hard to talk about parking,” Petty said. “I love talking about it, but I think I’m one of the only ones.”
As more people rely on ride-sharing services like Ũber and Lyft, and as the city strives to be more environmentally conscious, Petty said that modifying parking requirements for businesses should be considered, possibly taking into account the number of bike racks a business provides.
Additionally, with the boosted Transit Occupancy Tax rate taking effect thanks to the passage of Measure H last November, new hotels would bring hundreds of thousands of additional dollars to city coffers, Petty said.
The focus on municipal revenue came despite Petty bringing relatively good news about the city’s budget. In a videotaped introduction, city finance director Viki Copeland said that her department’s proudest accomplishment in 2015 was when the city secured an AA+ rating on a bond issue to repay debt taken on to settle the city’s obligations to E&B Natural Resources over Measure O. A lesser bond rating, Petty said, could have cost the city up to $800,000 extra.
Although such moves have put the city’s budget in the black, the mayor found a sense of urgency by looking more deeply into the ledger. In the 2014-15 fiscal year, Hermosa dedicated only 3 percent of its general fund to capital improvements. Ten percent is a healthier figure for cities, Petty said, and the need for maintenance is becoming more apparent.
“Some city buildings are nearing the end of their useful life,” Petty said. “I don’t ever want it to get to the point of asking residents to pay for these things.”
While Petty mostly took a detached perspective, emphasizing the need for residents to participate in setting policy, her words occasionally revealed distinct preferences.
This was particularly so in the case of the Skechers project. The Manhattan Beach-based shoe manufacturer is planning a design center and executive offices along the west side of Pacific Coast Highway, stretching south several blocks from Longfellow Avenue.
Initial plans for the project drew criticism from neighborhood residents, who objected to the project’s scope. (Plans for the facility have recently been downsized to accommodate some of these concerns.) But Petty said she had a very different reaction to the project: she was excited about its ability to draw people to the area and contribute to economic development.
“There was shock and awe, ‘400 people are coming!’” she said. “And for me it was, ‘Oh wow, 400 people are coming!’”
