Santa Barbara’s Dire Pre-Existing Conditions and COVID-19

“Put it this way, the glass is more than half empty. Let’s just throw the glass out the window. Let’s forget it. There’s distrust. There’s disdain. That kind of baggage,” Jason Harris admitted. He’s Santa Barbara’s newly hired, first ever, Economic Development Manager (EDM). He’s moving his family from Santa Monica to Thousand Oaks, not quite within Santa Barbara city limits, but at least within the 805. He was offering a frank assessment of the relationship between the City Administration and city-wide businesses.

Mr. Harris is defining the state of Santa Barbara’s “pre-existing economic conditions” leading into the coronavirus pandemic; the city’s chronic vulnerability, its broken government relationship with what are commonly called “stakeholders,” that’s all of us who work for, or own a business.

With shelter in place mandated and the wholesale closing of businesses and services that is the massive social distancing response to the pandemic, the coronavirus threatens to replicate itself into an economic disaster that could amplify the functional deficits of our citywide economy and plunge Santa Barbara into a hotspot of economic pain.

Tourism, one of Santa Barbara’s biggest assets, is also its biggest weakness in the time of pandemic. Innovations and problem solving will be required to reopen Santa Barbara tourism. It won’t be easy or quick. Projections from FEMA to McKinsey and Company predict we may lose 40% to 50% of our businesses here – restaurants, cafes, stores, hotels, not just on State Street but in all of Santa Barbara, where so many businesses were already struggling.

A widely cited FEMA statistic forecasts 40% of small businesses never come back after closing during a natural disaster and only 29% that re-open are still operating two years later. Those businesses represent jobs, people we know, ourselves. We may see parts of Santa Barbara we love disappear, but we certainly want to do everything we can to help our neighbors and our community safely to the other side.

The EDM was hired to redevelop and enrich the Downtown State Street retail environment that this newspaper wrote about extensively four weeks ago. Now he has to try to understand how to save it. He will have to move quickly to repair the City relationship with business.

“I’ve got a wall in front of me of frustrated, disgruntled property owners and questioning businesses,” Harris confesses, “In this crisis we have to change the status quo.”

Not the normal admission from a city official who was hired by and reports directly to the man who runs Santa Barbara, the longtime City Administrator Paul Casey. How will the impasse between the city and local businesses be bridged?

The Pandemic Exposes Leadership Flaws

Sound bad? It gets worse. More than four weeks deep into quarantine with COVID infections and death tallies being issued daily by Cottage Hospital, what is the City’s plan for dealing with the disaster economically? And will they be in lock step with the medical efforts and the business community?

“The economic recovery has to be wholly dependent on the medical recovery,” State Senator Bill Monning said recently in a cross-county REACH Webinar. “We have to be very cautious not to expedite economic recovery that is not consistent with public health.”

We’ve all heard that testing is important for hospitals to determine which incoming patients are most in need. It can’t be emphasized enough that testing is even more essential to economic recovery. Without the data that results from testing we cannot know who may be asymptomatic, but infectious. Testing for the coronavirus antibodies allows health and government officials to track who has had the virus and who has recovered. Rampant testing, the public health term for mass testing, is the only safe avenue toward a staged reopening of the economy.

L.A. County began dispensing the antibody test on a mass scale in six sites last week and expects to ramp up. Despite whatever we may have heard on the contentious national stage, testing is an absolutely essential and critical component of recovery. It will certainly be so in the State of California regardless how the Federal Government behaves. Most counties in California are making aggressive plans to acquire and roll out mass testing. Where is Santa Barbara in this important, urgent, lifesaving, and economy enabling effort?

In nearby San Luis Obispo County, Health Officer Dr. Penny Borenstein has led an aggressive program of testing throughout the county.

“I have pushed very hard for us to do as much testing as possible,” Dr. Borenstein recounts. “We have pretty good geographic spread of testing across our community and we offered ourselves in Public Health to hear from any constituent who feels they have the disease and are getting roadblocks getting tested.”

What is the plan in Santa Barbara on the city level, for mapping the pandemic to move toward reopening?

Mayor Cathy Murillo has walked the streets of Santa Barbara to connect with people and businesses within the confines of social distancing. She’s a “heart on her sleeve” people person and many folks need and appreciate that. Yet pressed on a pandemic plan, she offers virtually no specifics.

“Pandemic is the purview of the County,” the Mayor responded, “specifically County Public Health, the County is the agency with medical doctors and behavioral health professionals.”

Considering that the mayor came into office on the Montecito debris flow, and that the Montecito and Santa Barbara area seems to be on a disaster-a-year schedule with drought, fires, and mudslides, one would think that the mayor and strategic minds in City Hall would have such a plan. With three once-in-200-years life-threatening calamities under their belts it would be reasonable to expect they might have protocols and task forces ready to spring into action. Who ever said the fourth time’s a charm? No one.

Assistant to the City Administrator Nina Johnson has always been the point person for emergencies. She is preternaturally calm, poised, and good humored. Unlike the rest of the City Administration, she has excellent relations with locally owned businesses.

“She’s just an extremely positive person,” remarked John DeWilde, owner of the Santa Barbara Valet and recently opened Haley Hotel. “Nina is well connected with the business community and well liked. She has a tremendous grasp of local issues.”

That said, the stakes this time are higher. A pandemic isn’t your garden variety city crisis. It’s all encompassing and in many ways her situation as spokesperson is impossible.

When asked about the City Administration’s current emergency plans, she responded in the narrowest of terms.

“We are currently looking at how we move forward with our budget for the upcoming year. We have reserves that can be used, but that can only provide for city operations through a few months.”

It’s no secret that City budgets are not immune to COVID-19. Some residents probably wish they had enough to get through a few months. But aren’t there even greater stakes than the city budget to be considered? When asked how the city would deal with business and health issues, potential testing and reopening, Ms. Johnson also deferred to the County.

“The City specifically did not plan for a pandemic. We have not planned for long-term social distancing requirements. The County is our operational area to help us with emergency planning.” Five weeks into the crisis that seems like a weak response at best.

And is there a war room or task force we can rely on?

“Within the executive management team, there is a policy group. So, it’s the city administrator, the public works director, the HR manager, and the city attorney, about twelve people.” And the mayor? “The mayor is not part of the staff team.” Note as well, there are no doctors, health experts, no businesspeople and no nonprofits on the team.

Put Santa Barbara’s situation in perspective with how San Luis Obispo is handling the crisis. Working with REACH, a service organization that covers the Central Coast region (including Santa Barbara), the city administrators of San Luis Obispo join state legislators, county health leaders, business interest groups, medical leaders, university representatives, and over 100 participants from all quadrants of SLO County for weekly emergency webinars to coordinate action and share information. When the Montecito Journal inquired, the REACH representative acknowledged that her organization would welcome working with Santa Barbara but has not been approached. Santa Barbara does not appear to be part of any similar cross disciplinary, cross county group.

Santa Barbara’s present city administrator has been in office over four years; it’s not his first rodeo. But if leadership action is being taken in the halls of City Hall, it is not being communicated.

Press releases do not leadership make. CYA (covering your a**) occurs in city leadership every bit as much as in the private sector. The public likely checks its Facebook pages more often than the pages of santabarbaraca.gov.

When leadership is elective the voters have a chance to evaluate and rethink where we are in the world and what we need in a leader. In bureaucracies that opportunity does not exist. When a city is run as a business, the city can lose sight of who they serve and why. This administration seems to view itself as just another business entity looking for rescue, rather than a leader for all of us.

In a crisis of pandemic proportions, transparency and self-sacrifice are absolutely required. The ability to take collaborative action and communicate those actions is crucial. Lives, businesses, and economic survival depend it. Will the lack of collaboration and transparency put us behind other cities in California?

The Quarantine Economy

Whether we like it or not, at the moment we’re in a Quarantine Economy. The 500 city workers let go last week included parking attendants, librarians, and graffiti removal staff. All of them were notified that when we emerge from this mess they would have to reapply.

“We cannot wait for things to get back to normal,” said Mayor Murillo, justifying the move. “In the meantime, we need to keep our wastewater treatment plant running, our law enforcement strong, people are relying on the stoplights to work and the streets to be functional.”

More city employees are likely to be let go before shelter in place is over.

When asked whether top tier managerial pay cuts were being considered, Ms. Johnson acknowledged that “she had not heard that discussion.”

In what is a perennial point of contention and several widely circulated petitions, Santa Barbara’s City Administrator Paul Casey is paid $379,428.52 in annual pay and benefits, almost double what California Governor Newsom makes. Other administration directors are paid roughly $200,000 to $300,000 or more.

Even Anna Wintour of Vogue has taken a pay cut during this crisis. Seems like pay cuts will be impossible to avoid. Highly paid executives should sacrifice at least some percentage before poorly paid workers suffer 100%.

Innovation and Change

In the silver lining playbook of the Quarantine Economy, there has been considerable innovation taking place. Community Development Director George Buell has made a fast start of moving his department forward. Within the last three weeks they have converted over a thousand plans to PDFs online and moved inspections to Google Duo and Facetime for safety. Turnaround times will be reduced, and these benefits will be retained when the quarantine is over. As applications have dropped as much as 30%, the department will hopefully catch up with their much complained about backlog.

Building is a category that could return before other sectors of the economy. Not only are inexpensive loans available for construction but many building practices can be performed safely with social distancing. Schools and many other businesses have moved online at an unbelievable pace.

Big Brand Tire on Milpas is another example. They’ve introduced “Touchless” repair. In six easy steps they’ll service and sanitize your car. It’s an example of another business not waiting for the quarantine to be lifted.

Other problem-solving innovations entail simply a return to old school. The library, for instance, could reinstitute Book Mobiles. Food trucks that the city had basically shut down two years ago could be reconstituted, giving restaurants and other food services new ways to reach their former customers.

Eventually as more restrictions are lifted through testing, outdoor dining options could be extended. Street closures could help move the restaurant business toward a new normal – allowing for more vibrant street-life including outdoor dining. The sooner the city focuses on collaborating with businesses to discover possibilities for new paradigms, the sooner city revenues will return.

The City and Business Need a Couples Counselor

Creative ideas don’t matter if the city administration doesn’t listen to business. Apparently, even in a time of crisis, the disconnect continues.

It’s important to realize that two usually mentioned “business organizations” that normally liaison with the city are largely defunct. The Chamber of Commerce has had a succession of leaders resign. Downtown Santa Barbara, the organization in charge of the now nostalgic “First Thursdays,” lost its latest executive director who resigned after only 15 months.

With no viable business organization to work through, Amy Cooper, owner of Plum Goods and a tireless advocate for Santa Barbara business, and Keith Higbee, managing partner of SGV Global, a brand strategy and innovation consultancy firm, partnered to contact the city at the very inception of the crisis.

On March 13, Ms Cooper contacted the mayor and offered to put together a group of bankers, hotel owners, and small businesses to come up with an economic task force strategy for the COVID crisis.

Attending the meeting was an all-star business lineup that included Sherry Villanueva of Acme Hospitality, Clare Briglio of the Economic Development Collaboration, Women’s Economic Ventures CEO Kathy Odell, Geoff Green of the SBCC Foundation, Bob Tuler of Radius Group, and others.

They discussed a broad-based agreement to establish a joint public-private economic task force, a clear recognition that the economic impact from Covid will be severe. It was discussed that issues including unemployment and underemployment of working-age residents will put the city to the test. It was agreed the task force would meet bi-weekly. The meeting was led by Mr. Higbee whose company specializes in these initiatives. The focus was on relief, return, and revitalization. City Administrator Paul Casey walked through the meeting at the very end.

The mayor endorsed the proposal and it was dubbed “The Mayor’s COVID Economic Task Force Plan.” It was even presented to City Council by Nina Johnson the following Tuesday, March 20. The entire project had the moderate price tag of $15,000 to provide an honorarium for participants to ensure attendance when, naturally, each of these owners have other urgent obligations. Mr. Higbee was included to allow his firm to support the effort. 

Guiding documents were made and submitted, yet by March 24 their calls were unanswered. When the Montecito Journal inquired with the Mayor and Ms Johnson about the plan, the mayor didn’t seem to recall, and Ms Johnson said the plan was dropped because it was too expensive.

Given the salaries of City executives, it seems like a few strategic paycheck cuts would more than fund the initiative and go a long way toward building bridges with the business community.

Which brings us back to the newly arrived EDM Jason Harris. He remarked to the Journal, “There’s great frustration that there hasn’t been an internal advocate for property owners and businesses in the city organization.”

Does he consider himself that advocate?

“Most definitely,” he replied.

Perhaps he should start by reaching out to the stellar task force that was gathered on March 20 in the mayor’s office and ask them what to do next.