San Jose Downtown Association

Annual Meeting of the San Jose Downtown Association

Scott Knies “State of the Association” Speech

October 13, 2006

Good morning. Next month will be the 20th anniversary of the first Downtown Association Annual Meeting. The organization had formed the previous summer when two local businessmen walked a couple blocks of South First Street collecting $35 dues. Imagine downtown in the midst of the light rail and Transit Mall construction and 12 blocks of First and Second Street torn apart storefront to storefront all at once. The Fairmont Hotel, 50 W. San Fernando office building and former Pavilion Shops were also simultaneously under construction. It was a horrific mess and downtown gasped for survival. My business at the time – where Ballet San Jose Silicon Valley is located today – had a basement that needed to be evacuated and filled in to support the weight of the train. My customers walked across a wooden plank bridge over a gaping hole to get to the front door for a year and a half as the mall project dragged on for three years, plagued by scandals such as the out-of-state contractor bribing city inspectors. Now, this was the mid-80s and there was little or no community outreach or mitigation programs. So in the midst of this rubble, the idea of a downtown association was born. Initially, we were completely reactive and driven by desperation to keep our businesses from going under. We wanted a seat at the table. Well, there wasn’t a seat at the table for us not even a stool. While we busied ourselves with formation tasks – electing a board, drafting bylaws – two things happened to help propel the organization forward. The head of the RDA at that time, Frank Taylor, wasn’t keen on community input, especially the concept of a downtown association. Frank liked to control things pretty tightly but he also realized the natives were restless with all the construction and so he hired a staff person to start doing promotions that winter of ’86 to help pacify the merchants. One of the promotions was a free rubber tire trolley to help customers get around all the closed streets and construction mess, except we didn’t have any customers. It was a rainy winter and all the bums – we didn’t call them homeless back them - rode these replica cable cars around town all day long and the Mercury News did a front page story with a photo of an unhoused individual, the only passenger under a big headline “Trolley to Nowhere.” Another promotion revolved around Christmas and a Santa Claus was hired to sit in the display window of the closed De la Rosa’s bridal shop where E & O Trading Co is now located to wave at passersby and spread holiday cheer. This was a very lonely Santa Claus. He also had a bit of a drinking problem and was nipping on a bottle while seated in the window and eventually passed out with his beard askew.

The other thing that happened just as the city was figuring out they weren’t very good at promotions was a classic sandbagging of the downtown councilwoman Susan Hammer. The old guard of downtown merchants, called the Greater San Jose Business Association, invited Susan to a meeting but it was a set-up with dozens of angry business owners yelling at her in front of TV cameras and reporters. Susan was furious and stormed into then Mayor Tom McEnery’s office and said, in no uncertain terms, YOU WILL DO SOMETHING about this. Mayor Tom knew his RDA czar didn’t like the idea of a downtown association, but the Mayor also knew it couldn’t get much worse then that winter’s continuous bad publicity. He also saw the opportunity to support a new group that offered a more positive message than the old guard, inspiring a vintage McEnery quip about the Greater San Jose Business Association: “The fewer their members, the longer their name grows.” Thus, a formal partnership was born between the city of San Jose just underway with its redevelopment era and a fledging private non-profit corporation devoted to representing the new downtown. Telling that origin story today, it occurs to me, we were the first San Jose SNI 12 years before the Strong Neighborhood Initiative became the city’s darling project.

Well, both the city and the association have grown up a lot these past two decades, like the downtown we serve. The role of the Association has evolved into being a problem solver, not a problem maker. This is easy for us because we do not focus on politics, but on our members. And since our members are primarily business and property owners, you understand two things real well:

1) You pay a lot of taxes and fees; and 2) business is about forming partnerships and relationships -- with investors, with employees, with customers, with the community.

Problem solving is a big deal and it comes down to getting people to talk to each other. Communication is a chief function of the association. Getting people out of their silos and working together toward collective goals. Unlike the early years when we focused too often on our differences with the city, we have learned to concentrate on where we agree. Business and government have mostly shared values when it comes to improving the city’s downtown. We all appreciate that a healthy downtown reflects on the health of San Jose. It has been in everyone’s best interest to build an effective partnership with the city -- it is a symbiotic relationship. Business is vital to the success of the city and vice versa. By working together we all compliment each other’s skill sets between government, business and nonprofits to leverage our stretched-way-too-thin resources and achieve more comprehensive results.

That description of effective partnering may seem obvious and clear to everyone in this room but it has been exceedingly difficult times recently for relationships and results in San Jose. The rhythm of term limits has exacted a heavy, distracting toll with more than half the city council running for re-election or higher office, taking eyes off the municipal ball. Both Cindy Chavez and Chuck Reed would usually be in attendance with us this morning, but now that independent expenditure limits are off, their campaigns are busy aiming hit pieces at each other. I regret that the next 3 1/2 weeks will be the most savage, negative electioneering San Jose has ever seen. All this while our current mayor, Ron Gonzales, was indicted and then censured by his city council colleagues this past year, turning a lame duck into a dead duck. Some would say the mayor reaped what he sowed by failing to nurture and cultivate more community relationships; trying to over-control policy and micromanage staff; and leaving most of the city’s natural allies on the outside with our faces pressed against the glass, only occasionally welcomed inside when it was politically convenient. Indeed, these are very sad times at the top of San Jose City Hall today . . . however, there is hope. Since partnerships are about relationships and relationships are about trust, we will soon enough have new leaders that must begin the process of restoring public trust. Their biggest test will be one of their first ones: hiring a new City Manager. Ask yourself: What type of candidate will San Jose attract in the current culture? It will be incumbent on our new mayor and city council to possess the political will and leadership to demand a strong City manager. One that insists on community citizenship and stands up against their own mini-mayor tendencies. We desperately need new leaders that intuitively understand that if you have healthy relationships with your community partners, you share power, and that power has babies. Let’s begin to multiply San Jose’s assets and close out once and for all this bitter detour in our city’s history.

The Downtown Association must walk the talk as well. An example is our approach the past six months on gaining incentives for high-rise housing downtown. A few years ago, the way to get high level deals done at city hall were a couple insider meetings and then a surprise supplemental memo co-signed by a near majority of council members and released just minutes before the council meeting on a given Tuesday with a fait accompli recommendation. The Association adapted well to these rules of engagement and we benefited – we were insiders; we had access. But these shouldn’t be the rules. The only way for the process of citizen democracy to work is to honor it; is to practice it; is to participate in it. Working from the ground up, the Association took its incentive proposal to the all volunteer San Jose Parks and Recreation Commission and eventually earned their endorsement. We also reached out to some of our friends in citywide neighborhood organizations to better understand their positions on overall park fee increases. This type of community citizenship strengthens all our institutions and the association’s proposal is that much richer for the buy-in. Now we’ll see what happens at the city council level. But the issue is illustrative of how the association will behave in the future, especially the increasing partnership between business and residents; downtown and neighborhoods. If downtown is to continue to grow, our role of keeping diverse interests pulling for the greater good will be essential to the success of that growth.

I remain optimistic about the long-term future of downtown. Many of the demographic trends bode well for downtown’s resurgence. The baby boomers -- 77 million of us born between 1946 and 1964 -- are living longer and healthier than any previous generation. Most of us are becoming empty nesters by now, many are looking to downsize and urbanize. And our kids, the millennials, 70 million strong, those born between 1977 - 2003 – anybody here born after 1977? The millenials are the first generation to grow up attached to technology and multitasking – and they are drawn to the excitement of cities. Also, a burgeoning global middle class will create markets in the U.S., especially Silicon Valley. And our mostly welcoming social policies here in the Bay Area continue to attract large numbers of immigrants, especially from Latin America and Asia. And perhaps the best stat of all, 58% of all US college graduates are now women and by 2010, females will represent a majority of the workforce.

What people are looking for – no matter what the demographic trend – is a connection, an emotional attachment to place and other people. Downtown San Jose has to make it personal – certainly all the new high rise housing on the horizon is going to help dramatically – but how far away are we from the magical “tipping point” where we finally have enough residents, employees and visitors that retail stores start popping all on their own?

OK, I said retail - this is where I talk about Santana Row again. Not just to make a point, but because I know it is constantly on our member’s minds. We conducted 3 focus groups last Friday with 12 of our largest paying members and at each focus group Santana Row was mentioned as the great lost opportunity for downtown. Let me assure you, we are not alone in our struggle with this type of competition. The shopping centers have studied the very best characteristics of downtowns and are now building lifestyle centers all around the world that emulate real downtowns. In some cases, like Santana Row, they beat the real downtown at its own game – creating the experience of place. I would argue “place” is a more important brand for downtown than retail but that’s another speech. But no matter what you call Santana Row, it will never be a downtown. A real downtown is so much more than “live, work, shop, play” and how to maximize the highest CAM charges for a narrow socioeconomic sector. The essence of a downtown is inclusiveness. A place for the full experience of human connection -- for hockey games and church services; office towers and cafes; schools and libraries; artist lofts and social agencies; theaters and galleries; and yes, grit – the whole diversity of human spirit – a kind of democracy of public uses that you will never find in a lifestyle center. And just as shopping centers learned to do “place” from downtowns, the shopping centers have shown downtowns how important it is to be clean, safe and friendly. This is the base downtown must build all other experiences on top of, and we’re going to have to do a better job of that before we achieve our tipping point.

I am encouraged we will make quicker progress toward that goal because of stronger links with our partners in neighborhoods and non-profits. Business, residents, and the third sector working together will increase our leverage for change because when it is clear what the people want, that always makes for good politics. If business, residents and non-profits combine forces around our consensus priorities for downtown, then our partnership with the public sector will yield results like never before.

Perhaps the greatest achievement of the SNI program – remember Downtown is the first – is the support of a community citizenship model where the silos between agencies have been eroded down a bit so all these groups and departments that we support with our tax dollars and never used to talk to each other are pulling in the same direction. You are seeing it happen more frequently – the Nvidia courtship is a great example. Rather than a two days notice Grand Prix type deal, you’ve got RDA and Economic Development and the City Council all talking openly about their offer and the reasons it is so important to help land this corporate headquarters downtown. What a boost Nvidia would bring. I told RDA Executive Director Harry Mavrogenes that the Downtown Association is all in. We can sweeten the offer with a beer at Music in the Park next summer for every Nvidia employee, or a nectarine at the Farmers’ Market or an ice rink pass, whatever it takes!

What will downtown’s focus be as we sit on the cusp of electing new civic leadership for the next 4 years? We hope it will be similar to the vision unveiled in August by 1st ACT Silicon Valley, one that continues the sound city planning to date and builds upon downtown as the regional hub for all of Silicon Valley. 1st ACT’s Creative Urban Center is a compelling vision of big deals – like BART, convention center expansion and a return of San Jose’s iconic light tower for the 21st Century – combined with small wonders – two way traffic, murals, flowering planters. Most of all, the Creative Urban Center concentrates on downtown’s sense of place, focusing resources on completing the historic core and filling in the gaps. We hope the next mayor will not want to put progress on pause for yet another prolonged planning exercise, and instead help implement the sensible strategies we already embrace.

So what is it that you want from downtown and your association? It is said whoever is the most passionate, the most heartfelt, is the most convincing. Do you want:

Green building incentives?
Cheaper permit fees for re-use of historic buildings?
Hanging baskets on Market Street full of bright geraniums?
Twinkle lights on all the buildings for the holidays?
Sidewalks power washed regularly?
Synchronized traffic signals?
Policies to provide more housing for working families?
A downtown medical clinic?
Historic trolleys that run year round – and for free?
A magnificent BART Grand Central Station on Santa Clara Street?
Uniformed community ambassadors patrolling the streets?
A downtown community court to deal with public disorder crimes?
Parking control officers that issue you a warning rather than a ticket on first offense?

These are just some of the ideas on our agenda for the coming year. We look forward to partnering with the new administration and presenting our 2007-2008 downtown action plan, “The First 500 Days,” together with our neighborhood and non-profit leaders. You can count on us to be an active, positive and productive partner.

You are about to hear from some passionate folks who serve on the association committees. That’s where the real work happens. These are volunteers merrily toiling in the trenches of community citizenship and as you listen to the results they have helped achieve, it is my wish you are inspired to join them. Thank you for supporting the resurgence of downtown by virtue of your attendance this morning.