‘Big Picture’ Economic Issues, Trends Discussion Planned for Council Committee Meeting Tuesday

As Pasadena looks hopefully toward Governor Gavin Newsom’s proposed “reopening” of California by June 15, the first of several online Local Economic Update panel discussions is set for Tuesday, led by Eric Duyshart, economic development manager.

The “big picture” discussion is scheduled to occur during the regularly scheduled 4 p.m. meeting of the City Council’s Economic Development and Technology (EdTech) Committee.

The first panel will feature five retail property managers—Danny J. Bakewell, Jr.- vice president of The Bakewell Company; Brian Flanagan, head of leasing, Paseo Colorado; William Gervin, vice president of leasing, Shopcore Properties, One Colorado;  Jeffrey Kreshek, sr. vice president, Federal Realty Investment Trust; and Taylor Pham, vice president, Merlone Geier Partners.

According to Duyshart,  the goal of this and future panels is to give the committee an opportunity to discuss issues and trends with the business stakeholders.

“The pandemic impacted consumer and investment behaviors. Consequently, it is expected to result in shifting demands for commercial and retail real estate and local employment,”  Duyshart said in an email Saturday.

“The panel format represents an effort to have an informal exchange with people that have a valuable perspective of the Southern California retail market.  In addition, these participants understand how Pasadena retailers are doing and see many of the issues local retail businesses are dealing with,” Duyshart said. “We want to understand this dynamic for the benefit of local business, consumers, and future planning.”

In his official assessment of the current pandemic economic landscape, Duyshart wrote to the committee that economists have emphasized that a financial recovery for this pandemic-induced recession will need to chart a novel course. Recovery will be dependent upon both the public and the private sectors to mitigate “the negative impacts of the employment decrease and changes to consumer behavior. :

California experienced a higher unemployment rate than the rest of the nation, wrote Duyshart. Duyshart also noted that California mandated more “non-pharmaceutical interventions,” such as restrictions on business operations, social gatherings, as well as implementing mask mandates.

These restrictions produce higher unemployment rates than states with less restrictive measures, according to economists.

“Consequently, industries subject to the more restrictive NPl’s are expected to recover at a slower rate,” wrote Duyshart.

Pasadena’s economy will likely follow that of the state, he predicted.

There are a few segments of Pasadena’s economy that will need to be monitored closely to support a path to recovery, including office spaces, retail, hospitality and medical.

Dyshart noted that a rapid return to pre-recession office use is unlikely to occur and that office demand “may remain weak for the immediate future.”

However, wrote Duyshart, “despite the convenience of working from home, compelling reasons do exist for retaining commercial office space including on-the-job training, company socialization, the benefits of socially-induced creativity, and need for specialized equipment.”

Duyshart continued, “Without the full return of office-workers, there will be a spillover effect to other business sectors such as restaurants and retailers that benefit from an urban core of daytime office workers.”

In terms of retail, it was pointed out,  many retail spaces were already struggling before the pandemic.

National and multi-site retailers were flirting with consolidation, reduction in the number of stores and stores with smaller footprints. The pandemic accelerated those choices with the loss of household income, concerns about community spread of COVID-19, and reduced consumer confidence. Moving forward, wrote Duysahrt, the importance of providing an in-store consumer shopping experience, with or without social distancing,  will become more important to drawing consumers back into shopping areas.

Pasadena’s dependence on tourism was also heavily affected by the pandemic, added Duyshart.

California is host to over 20% of all foreign tourists to the United States. Given travel restrictions, quarantine requirements, and shelter-in-place orders, tourism to California experienced a significant decline.

“Fortunately,” concluded Duyshart, “there is pent-up demand for human interaction and it is forecasted that consumers will shift spending towards recreation, travel, accommodations, and restaurants. With the State of California announcing the potential to fully reopen its economy by June 15, 2021, this should clear the way for events and conventions to once again take place in Pasadena.”

At least one business community leader seemed pessimistic that the planned panel discussion would result in significant positive actions to support the local business community.

Paul Little, President and Chief Executive Officer of the Pasadena Chamber of Commerce, told Pasadena Now over the weekend that  “the committee has hosted similar panels on various industries in Pasadena as they try to gain insights into the local economy and industry trends. It is a good effort that does provide some useful information, but like the recent Economic Development Strategic Plan, [these tend] to be received and filed with little or no actions arising from the discussions.”

The Economic Development and Technology Committee will meet online Tuesday, April 20, at 4 p.m. The meeting will be accessible at www.pasadenamedia.org.