The Santa Barbara City Council will hold a special meeting Thursday to take suggestions on how to revitalize the Downtown economy.
According to a pre-meeting agenda report prepared by Nina Johnson, senior assistant to the city administrator, real estate advisory firm Kosmont Companies will present the results of their Downtown retail market analysis at a 4 p.m. hearing in council chambers in City Hall, 735 Anacapa St.
Kosmont was hired in January to study how the city can improve Downtown retail vacancies and business retention. Its report found millennials, customers aged 18 to 34, are the largest customer group in Santa Barbara and business owners must develop customer experiences that integrate digital and physical elements to reach them.
“What we like and what we want is played out on social media,” reads a Kosmont presentation released with the agenda report.
“Millennials are digital natives; consumers begin paths to purchase online.”
Millennials and Generation Z buyers together represent 40 percent of the United States population and $750 million in buying power, according to Kosmont. Facebook alone had 168 million users in 2018 and accounted for 42 percent of social media traffic in the United States. Instagram had the second-most users at 117 million followed by Twitter with 70.2. million.
The Kosmont presentation explains that in order to thrive, stores must develop a digital and physical presence, invest in technology and change their business strategies from just selling products to “solving customers’ problems/answering questions.”
Kosmont researchers say omnichanneling strategies are sales strategies that unite “User experiences from brick-and-mortar to mobile-browsing and everything in between. All products to all consumers at all times in all ways.”
Kosmont suggests programs to educate landlords, businesses and city officials on omnichannel destination and experience-based retail trends to rehabilitate the city’s “anti-business” reputation and image.
The presentation also suggests special events and promotions, such as monthly music or arts events in Da la Guerra Plaza, to increase spending from residents. The city may also consider more allowing “pop-up” shops and rooftop terraces.
The presentation notes that the city usually offers downtown marketing and economic development services to local business organizations like Visit Santa Barbara, Downtown Santa Barbara and the Santa Barbara Chamber of Commerce.
“Kosmont believes that Economic Development is an important function for most cities and it typically requires a full time City government managerial position,” reads the presentation, which suggests the city hire an assistant city manager to oversee Downtown economic development or create a position that specifically addresses that need.
“The real estate development/entitlement process in California is extremely time consuming and expensive for the private sector, and anything that can be done to enhance transparency and communication between the City staff and development community will be beneficial to downtown, neighborhoods and yield economic benefits.”
The presentation suggests using Measure C funds, charging fees for expedited business permits, reducing city subsidies for marketing budgets with private organizations and using Downtown parking revenue to fund a city economic development division.
The division could provide workshops between developers and property owners, help nonprofits get permits for special events that would draw residents Downtown, and track and follow through on economic project proposals.
Kosmont estimated the annual budget for such a division could range from $300,000 to $1 million.
Other suggestions include infrastructure investment such as a free waterfront shuttle service on State Street; and creating a pedestrian mall on State Street, which would close up to three blocks on State Street to vehicle traffic.
City administrative policy recommendations include overhauling the city zoning and permitting process, easy permits for temporary pop-up shops and facilitating infill housing or living and workspace in the back of vacant buildings along State Street.
Kosmont noted that the city must act now to avoid further Downtown economic depression.
“5 years of declining sales is trending toward a snowball effect creating blight throughout the entire State Street corridor,” reads the presentation.
In Tuesday’s regularly scheduled meeting, the council is expected to adopt an amendment to the city inclusionary rental housing ordinance. .In projects with 10 or more units,10 percent of the units will be restricted to units affordable to moderate-income households.
The council also will consider an amendment to the ordinance for outdoor dining license annual fees.
City staff estimates replacing rent with a nominal annual renewal fee would result in a loss of $76,000 in revenues to the Public Works Land Development Program.