The Local Economy: Where Do We Go From Here?

Remarks by Mayor Bill Bogaard
Pasadena Chamber of Commerce Annual Dinner
July 14, 2000

It is a pleasure to attend this installation dinner, which marks a very successful year for the Pasadena Chamber. Of course, it is an honor to be called upon to speak about the state of the local economy.

By tradition, speeches about the economy rely primarily on crunching numbers. But tonight, you will be relieved to know that I do not intend to go through very many numbers.

What I want to do is offer a somewhat broader look at Pasadena’s economic situation, attempting to identify trends and developments that will directly affect our future well being. In that regard, I will mention the need in Pasadena for housing that is affordable and, second, what I believe is a critical new need to focus on quality of life in building our economy in the future.

All of us are aware of the performance of the U.S. economy in recent years. As a nation, we have experienced rising prosperity for nearly 10 years. And in California, the recession of the early 90’s has given way to great economic advances during the last five years.

In this truly impressive progress of the economy during the 1990’s and continuing today, technology has played a significant role, although one difficult-to-measure. There is every reason to think that technology will continue to impact the economy in a positive way—creating more productivity and helping stem inflation—for the foreseeable future.

The experience in Pasadena is a direct reflection of this strong economic environment: dynamic business activity and heavy new investment; increasing income levels for most residents; strong tourism, which gives added vitality to restaurants and retail outlets, to cinemas and theatres; and a healthy local government.

Pasadena’s bond rating of Double A was recently confirmed by Standard & Poor’s. According to its report, this bond rating reflects “a stable and diverse economy anchored by Cal Tech; stable financial management with good general fund balances; and manageable overall debt”. This speaks well for the continued strength of our local economy and the management of the City’s resources.

Here in Pasadena, technology is having a significant impact, providing a new foundation for Pasadena’s economy, which might now be described as Pasadena’s digital economy.

With this background, I would like to make two points: the first is a realistic admission that not all of Pasadena is participating in our prosperity. Recently, in connection with the update of the general plan, various studies have been done on what is going on in Pasadena. They provide lots of important information about the City.

I promised not to burden you with statistics, but we should look at some of the data that have come to light. The median price of homes in Pasadena is approaching $300,000. At the same time, more than one out of four households in this City have incomes of less than $25,000 per year. Another 16% have total incomes of less than $40,000. The effect of this is that the vast majority of residents today cannot afford to purchase a median priced Pasadena home.

Ironically, some of the very positive factors that I described earlier about Pasadena’s progress contribute directly to the shortage of housing. Land costs, construction, and financing are all very high. These factors, coupled with the increasing shortage of land at any cost, make the development—even the retention—of affordable housing in this City unlikely, at least without creative City intervention of one kind or another.

Directly related to these bleak numbers is a need for new job opportunities and the establishment of new businesses that allow low income persons and the unemployed to get a toehold in the economy. The unemployment rate in the northwest section of the City is three times the unemployment rate in the rest of the City.

I could express the needs of our community in other ways, but it is clear that we have a long way to go in bringing all of the community into the prosperity enjoyed by many. We who are gathered tonight need to recognize a heavy responsibility as community leaders in an effort to expand the benefits of Pasadena to all corners of the community.

Of course, in the long run, unemployment can be reduced only through education. In that regard, it is reassuring to us all that the test results for the Pasadena Unified School District announced recently reflect a continuing upward trend. These results reflect the various reform efforts that are and continue to be underway to help improve the performance of our public schools.

My second point focuses on the role of quality of life, rather than traditional factors, in continuing the process of building the Pasadena economy. Many graduates of Art Center College of Design, Cal Tech and PCC stay in Pasadena as they develop their careers. Some of these creative young people have established technology firms that have taken off like rockets. Others run their businesses primarily in support of technology enterprise. They rent and sometimes own their office space, contribute to the success of other firms in Pasadena, purchase goods and services here, hire local talent, and, in many cases, spend part of their time teaching the next generation to do the same.

I am convinced that technology related businesses are a major factor in Pasadena’s future economy.

Ask any one of these young entrepreneurs why they chose to operate in Pasadena, and they will not point to abundant land, low taxes and labor costs; they will instead talk about the community itself. Based on the predictions of economists and other experts—many of which have come to pass—future economic growth will be increasingly dependent on quality of life issues and less dependent on traditional economic development factors.

If this is true, it suggests that communities expecting to attract entrepreneurial, technical and creative talent as an integral part of the economy must give great attention to quality of life issues, such as strong public schools, safe streets, manageable traffic and good transportation systems, and vital and diverse cultural opportunities.

It is reassuring to me, as I observe what is happening in our great City, that Pasadena appears to be undergoing a revitalization of arts and culture. Time allows only a few examples, but the investment of many millions of dollars at the Norton Simon Museum to improve its exhibition space and to establish a wonderful garden is one indication of Pasadena’s new cultural strength.

Even more important to me, the Norton Simon’s increased availability for public viewing, more days and more hours per day, is a wonderful new resource for the community. I am very grateful to Jennifer Jones Simon for the new direction the museum has taken.

Another example of cultural vitality is the nine month long celebration that gets underway in September of this year called “Universe”. It is an examination of how mankind has viewed the cosmos down through the centuries, from both an artistic and a scientific point of view. During the nine months of this program, there will be exhibitions, musical performances, lectures, and other activities conducted by a collaboration of great Pasadena institutions: the Norton Simon, the Art Center College of Design, Cal Tech, Pacific Asia Museum, Southwest Chamber Music, and others.

Just in recent weeks, Pasadena has welcomed the Chalk Festival, the Old Pasadena Jazz Fest, the Method Fest, a week-long film festival emphasizing acting styles and skills, and a wonderful free concert on the steps of City Hall presented by Pasadena Pops Orchestra.

In the days ahead, we can look forward to Pasadena Art Night, a City-wide celebration of Pasadena’s art museums and galleries, which occurs on Friday, July 28. According to Jonathan Glus, the City’s Executive Director for the Arts, “Pasadena’s reputation as a major destination to view the visual arts in southern California is growing. Based on our broad cultural traditions, audiences are expanding tremendously.”

I have mentioned Art Center College of Design, which most persons recognize as an internationally prominent institution in our community. At City Hall, we are working as hard as possible to demonstrate to Art Center that Pasadena has the resources Art Center needs to create the kind of institution it intends to be in the 21st century. I am cautiously optimistic that the Art Center’s board of trustees will reach the conclusion that Pasadena is a community in which it wishes to pursue its future.

This afternoon, I interviewed a long time Pasadena resident who has applied for membership on the Pasadena Arts Commission. He is an artist of international standing, with scores of shows during his 35 year career occurring around the world, and he is also an influential academician at a major university. I asked him why after being in Pasadena more than 25 years he is now expressing an interest in becoming directly involved in the City’s arts and cultural activities. His answer was simple, “this is where the action is.” He asked me if I knew Richard Koshalek, the new President of Art Center, and if I realized the international prominence of Art Center as a leading trainer of graphic artists around the world.

Recently, the Star News reported on the change in the Rose Bowl football game that will occur in the year 2002, with the game occurring two days after the Rose Parade on the first of January. This two-day period is a great opportunity to spotlight Pasadena’s great arts and culture resources for the benefit of the many thousands of visitors to Pasadena.

In closing, there is no doubt that Pasadena’s economy is in good shape, and we are well advised to think about how to maintain that momentum. We need only to look at the continued vitality of old Pasadena, the emerging excitement at the Playhouse District, the construction at the site of Plaza Pasadena to create the Paseo Colorado, and the news that the project on South Lake, called “The Stores on South Lake”, is moving forward to satisfy ourselves about the state of the local economy.

There is an interesting economic prediction dating from a long time ago that seems to be coming true in Pasadena. It was made a century ago by the brilliant science fiction writer, H.G. Welles, who stated that in the future, cities would boast downtown areas that are “great galleries of shops and places of concourse and rendezvous, pedestrian places—spacious, brilliant and entertaining”.

With the momentum that now exists, with a frank admission that we have a long way to go in sharing prosperity with the entire community, and with a good understanding of the changing needs for building our community in the new economy, I am confident that Pasadena’s economic future is bright. I ask you to join with me tonight in a new commitment to build a better, a greater, City of Pasadena. 

Posted: 7/14/2000 09:05:00 AM
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