Governor Schwarzenegger Announcing Actions to Jump Start California’s Economy through Job Creation, Offset Housing Slump

GOVERNOR SCHWARZENEGGER:

Thank you very much -- I forgot. He has not been in Sacramento for so long that I forgot; I always have to adjust the microphone by 12 inches. But anyway, thank you for the wonderful introduction, thank you for being here today. And as I have said to you many times, and I say it publicly, that we miss you up there, because you have been a great leader, a great Speaker, and we also -- not only was it serious business, because when I got into office we had a serious crisis on our hands, and we took care of a lot of those problems. But we also had a good time, and we had some great laughs, which I think is important no matter what you do. So I want to thank you for being here. I want to thank also, of course, Secretary Vickie Bradshaw and Secretary Dale Bonner for being here today. Thank you both very much.

It is great to be in Los Angeles here. Even though I live here, it's nice to also have events here in this beautiful town. And today my administration is awarding 73 million dollars of bond money from Propositions 1C and 46 in order to help build affordable housing projects up and down the state of California. Now, this is not the first time we have done that; we have done this just two weeks ago, where we have allocated 69.5 million dollars in Proposition 1C money for housing projects.

And this is all to create jobs and to stimulate the economy. With these monies we will create 5,300 new jobs, more than 244 million dollars in wages, and leverage a total investment of 662 million dollars. This will put people back to work, and it will also create hope for some of the people in California that really need it most. And I think this is what this is all about. In politics we have the responsibility to make the lives of people better, because building a better life and pursuing opportunity, but also what is very important is to have a place to live, and I think this is what this building is all about. This site is a perfect example of that. This 6-story New Carver Apartment Project will begin soon, and it features fantastic architecture by Michael Maltzan.

This is also part of our work to allocate billions of dollars of infrastructure bond money that has been made available, that the legislators voted for and the people have approved it in November of 2006 to rebuild California. And we are going to push that money out as quickly as possible, because there are 29 billion dollars of un-appropriated money still there. We want to push it out as quickly as possible to create jobs and to, like I said, stimulate the economy. And it will be used for housing projects, for transportation, port security, for building more schools and fixing classrooms, expanding our university system, and also for vital levee projects.

So, all of this is wonderful news for California. And we're also improving the communities, protecting public safety at the same time, and pumping up the economy. We're using bond money to leverage private investment, and to create jobs and to build projects that people really need in this state. This stimulus is especially important in the construction and in the housing industries. Because of the subprime mortgage crisis, those were the industries that were hit the most.

I'm also please to announce that we have received 5.5 million dollars in federal job training funds to help Californians that were hit by the mortgage and by the banking crisis to help them retrain for different jobs. I think this money will be very helpful, because it gives people a chance to go into different professions, and this money will be going to counties that need it the most, and also here in Los Angeles, of course.

So as you can see, we are not sitting around waiting for the economy to bounce back, or hope for the best. We are creating action. We are pumping out the money. We want to get the economy stimulated, we want to create jobs, and we want to rebuild California so it stays the Golden State, as it has been always known.

Thank you very much. And now we have the next person that will come out is Secretary Vickie Bradshaw, to say a few words. Please. (Applause)

SECRETARY BRADSHAW:

I'm very pleased today that the Governor announced the national emergency grant that we received from the U.S. Department of Labor to help us deal with the people who lost their jobs resulting from the subprime mortgage problem, as well as those who are part of the real estate and loan business who have lost their positions as a result of the downturn in residential construction. This money will help them transition using the very skills that they have coming out of those industries into other growing industry sectors, and we have many growing industry sectors in California such as health care, biotechnology, and many others.

The nice thing about having this announcement at this location, it also points out that even though we've had a downturn in residential construction, we need those people with those construction skills to help us build these wonderful projects coming out of our bonds. And Governor Schwarzenegger has made it a priority to make sure that we don't lose the people who have skills, because they are asset to our economy, an asset to our community, and we want to make sure that we move them into industries that have opportunities. And there are many industries, sub-sectors in construction, that are growing; non-residential construction and many dealing with the bonds.

One other thing that the Governor has done recently to create jobs is in the health care industry. We recently released 2.7 million dollars in the nursing area to, again, build capacity in our nursing, to make sure that we grow the health care industry, which is growing across all nine of our regional economies. So this is just another great example of making sure that we keep our assets, our human assets, growing in our communities, and we're very proud that the US Department of Labor is partnering with us.

And with that, I'd like to introduce Lynn Jacobs, who is the Director of Housing and Community Development.

DIRECTOR JACOBS:

I get to move the mike down again. I'm delighted to be here. As Secretary Bradshaw said, the Department of Housing and Community Development is primarily responsible for Proposition 1C, the housing part of the Governor's infrastructure package. And when you, the voters, approved the infrastructure package in November of 2006, we got a call from the Governor immediately saying, "Action, action, action." And we started getting this bond money out in December of 2007, and we continue to work very hard with our wonderful developer partners who build housing for those in the most need in California, as well as for first-time home buyers.

So we are especially delighted to be here in this wonderful project today. We continue to see housing as an important part of not only our infrastructure, but our economy and our job base, so we're very happy to be working with Secretary Bradshaw so that we can train more people to work on these wonderful projects.

So, speaking of this wonderful project, I'd like to introduce Mike Alvidrez, who is the Executive Director of Skid Row Housing Trust, the developer of this project. He'll tell you a little bit about what the project entails. Mike?

MR. ALVIDREZ:

Thank you, Lynn, and good morning to you all. I'm glad to welcome you all to the site of the future New Carver Apartments. The New Carver Apartments will be our 22nd affordable supportive housing project dedicated to ending homelessness in Los Angeles. Since our inception in 1989 the Skid Row Housing Trust has developed 20 affordable housing projects of over 1,230 units. In addition to the New Carver Project here we have under construction the Abbey Apartments, 115 units. We will soon break ground on the Cobb Apartments, 76 units, and later this year break ground on the New Genesis Apartments. In combination with the Carver Project, that is 400 units that is in the pipeline today, none of which would be possible without the help of the California Department of Housing and Community Development.

Funds committed to the New Carver project come from the Multi-Family Housing Program, the Supportive Housing Allocation, and it will enable us to target permanent supportive housing with integrated services for homeless senior adults and individuals, men and women with disabilities and chronic illnesses. And folks, these are among our most vulnerable population. They need to be off the street and into housing, and I think the inclement weather today is a testament to that fact.

And so I applaud the Governor and Lynn Jacobs, the Director at HCD, for making a commitment to supportive housing and providing permanent housing for those most in need. I also want to acknowledge our development team, who include Michael Maltzan from Michael Maltzan Architects, who is the designer of this beautiful building. John Bolling is up here from West Park Construction Icon Builders, who will be the contractor. And our Housing Director, Christian Almada, who is over here to our left, to amazingly close construction financing two day ahead of schedule, which in this environment is a great accomplishment. We should be recording right now, and so we're looking forward to breaking ground on this project within a couple of weeks.

Basically, our housing philosophy is to create beautiful buildings that provide permanent affordable housing coupled with a wide array of supportive services targeting that housing to homeless folks in a way that benefits the larger community and the local economy. We believe that this project, from the time the construction starts to completion, there will be about 350 people from the construction trades employed at some point or another on this site, and countless others in the manufacturing and distribution sector of the construction economy. I invite you to learn more about our work and the New Carver Apartments. I'd be happy to discuss this with you and possibly set up a tour after the event, and you can see some of our existing developments.

I want to thank you again for joining us today, and let you all know that you're all invited to the grand opening, which will happen in about 15 months, 3 weeks, 2 days and 4 hours, so we can all synchronize our watches. Well, I'll tell you what; we'll just let you know when the grand opening will happen. I want to thank you again for joining us here on the New Carver Apartment site, especially those distinguished guests who are up here with me standing in the rain. It is a bonding process.

Now I'd like to introduce to you Richard Slawson. He's the Executive Secretary of the Los Angeles/Orange County Building Trades and Construction Council. Richard?

RICHARD SLAWSON:

Governor and distinguished guests; on behalf of the State Building and Construction Trades Council President Bob Balgenorth, and the construction families throughout California, I'm very happy to be here this morning at a construction site that will create 97 new homes for families in our area. Along with that, it will create hundreds of good paying jobs for construction families in the area as well.

I want to thank Governor Schwarzenegger for pushing to make this happen, and creating the 42 million dollar fund that will go out throughout California to create jobs and to push our economy forward. This will provide a tremendous boost in jobs and economic activity throughout the state. When the billions of dollars in state initiatives Prop 1C and Proposition 46 were passed by the voters in 2002 and in 2006, we could not have known how important that would be in helping our economy today. This investment in our future will create over 2,500 construction jobs, and another 2,500 related jobs in our industry, and will pump needed cash into the economy at the same time. The building trades and crafts have supported the state propositions when they were passed, and we continue to push to invest in California's infrastructure in many other ways.

Congratulations to the Governor and Californians throughout the state for your part in creating these housing projects and the economic growth that it will bring to all of us. Thank you.

I want to next introduce Richard Lambros, who is the CEO of the Building Industry Association, one of our partners in the construction industry. Richard?

RICHARD LAMBROS:

Thank you, Richard. Governor, distinguished guests, it's great to be here today on behalf of the Building Industry Association. California home builders have long been supportive of the expansion of home ownership opportunities throughout our state. That's why we were terrific supporters of Prop 1C when it came to the California ballot a couple of years ago. We believe, as the Governor does, that housing is not only essential for what it does in providing shelter and that first rung on the economic ladder for individuals and families.

More importantly, and of course more importantly today, is what housing production does for our state's economy. In 2004 home building employed 500,000 Californians in our state and produced 20 billion dollars to our state economy. In our 6-county Southern California region in 2005, home building accounted for 91,000 building permits -- that's houses, apartments, townhomes -- and it contributed 12.5 billion in new real estate activity, 45 billion when you count in and include the total stimulus to the broader economy.

By last year our housing production in this region had dropped to 12.5 billion. That's 8 billion dollars in residential construction that has left our six-county Southern California economy. It's actually 18 billion when you count the multiplier affect on jobs, retail sales, all of the things that we invest in and that we put into our homes when we take on the new opportunity of home ownership.

So, Governor, we applaud your wisdom and that of your team, using the stimulus of our housing bonds right now at this time, not only for what you're doing for folks in this community and new housing opportunities, but what you're doing for the economy of our state. That's something that matters not just to homeowners, not just to our industry. It really needs to matter, and it does matter, to all Californians. So we thank you for this today, and we thank you for your support.

GOVERNOR SCHWARZENEGGER:

Thank you very much, everybody, for being here today, and thank you all for being here. If there are any questions, in addition to what was said already -- I think it was very well explained from every angle, that we are creating action and we are creating jobs, we are rebuilding California and we are giving people a chance to live in wonderful places, people that don't always have that luxury. And that the money, infrastructure bonds, is all about making everyone's life better, not just lives for businesses, or for transportation, or for the kids, but for everybody, and that's where housing is a very important aspect of it. And I want to thank again Senator Perata, who actually was the one that has fought heavily for Proposition 1C and for the 2.8 billion dollars in infrastructure bonds for housing. So I want to thank him again, because he was a big part of making it possible.

Any questions? Thank you very much, and have a good day, okay? Yes?

QUESTIONS/ANSWERS:

QUESTION: Governor, in an hour Elizabeth Hill holds her news conference. We're expecting an increase in the budget deficit past the 14.5 billion. You said yesterday there won't be any new taxes, but if the legislature can't agree on cutting loopholes for yacht owners, what prognosis is there for the legislative leadership and yourself to come together on cutting this budget deficit?

GOVERNOR: Well, I think it is very important for the legislators to get to work immediately. As I have said, it is a three-step program here. The first step is to have the mid-year cuts. I think the legislators did a great job with that, and we signed all the bills. And now the next step is, without any rest, to go into and start looking at the budget of 2008-2009. And the reason why it's important to make those decisions right now is because it takes months for any of the cuts to take effect, and this is why it's important to do this now.

And there will be disputes up there, upstairs in our Capitol. There will be debates over it, how do we cut certain things, how do we go and create new revenues, and all of those things. And I welcome all that, because like I said, my budget was a proposal, and I think we want to have everyone's input. I respect the whole team up there in Sacramento. I think we have a good team there that can get things done, and I hope that they can get the budget done as quickly as possible.

With the yacht tax yesterday it was unfortunate, because I think that the 26 million dollars could be used for important things, if it is for education, or for health care, if it is for after school programs. There are so many important programs from kids where the money would be more wisely spent than in helping people with big boats. But it's a matter of opinion. It's my opinion that some of the Democrats believe that. Republicans maybe don't. So the key thing is that this next month they're going to work hard and get it done. Thank you very much.

QUESTION: The leadership says a cuts-only budget is a nonstarter, and that they will not tolerate that kind of budget, and you've already taken taxes off the table. One gets the impression this is the immovable object versus the -- I forget the analogy, but you know what I mean.

GOVERNOR: I think that you never start the negotiations by saying certain things are off the table, and so I think that one has to always say everything is on the table and let's talk about all of those issues. And I think that there will be a debate over do we need more revenues, or should we do everything with cuts? And I'm a strong believer that we have to make the cuts, and we have to get spending under control, because we have an increase in revenues. Every year the revenues are increasing. So it's not like we're short on revenues, it's just that our spending formulas require us to spend more than our revenues.

So we have to become fiscally responsible in order to show Wall Street, in order to show the financial community, and in order to show to the world that this state is fiscally responsible, that we can live within our means, and that we are disciplined in that area, and that's what we have to accomplish this year.

I think it's absolutely crucial because we can't go and increase taxes every time our revenues slow down. This is what is the big problem here. We have seen every 5 years, since I have come to this country in the last 40 years, every 5 years we have an economic slowdown. And we also have a situation where we have a spike in revenues, and then they spend it all, and then we have no rainy day fund when we have an economic slowdown. So it's a systemic problem and a spending problem, not a revenue problem. And this is why let's not go and create more revenues, let's fix the problem that exists. Thank you.