Governor Highlights Economic Benefits of Props 1C & 46 Funding Allocations

DIRECTOR JACOBS: Well, good morning, everyone. Thank you so much for joining us today. I'm Lynn Jacobs, the director of the Department of Housing and Community Development and we are thrilled today to be making our first awards under the most innovative programs under the housing bond, infill and transit-oriented development. And we are especially delighted to have Governor Schwarzenegger here to address you today, so without further ado, Governor? (Applause)

GOVERNOR SCHWARZENEGGER: Well, thank you very much, Lynn, for that wonderful introduction and that long introduction. (Laughter) Very nice.

But anyway, I was really looking forward to coming here today and to be part of this great celebration. And I'm thrilled that the state is investing $47 million in Proposition 1C bond funds to help develop the railroad. And this is, of course, a spectacular project and I love when we can support projects with such historic importance. With the Transcontinental Railroad completed, America's ambitious journey across the frontier culminated right here in Sacramento's downtown railyard. And now, after years of challenges and tremendous cooperation by everyone here, that is up on this stage and everyone that is here in this hall, I think the railyard will shine just as brightly in the future.

These bonds will help transform Sacramento's historic riverfront, they will support affordable housing for families and seniors and they will beef up infrastructure in an area with easy access to public transportation. All told, this 240-acre development is one of the nation's largest urban infill projects, with plans for 12,000 housing units, parks, museums, offices and shops. And it will ease the burden on our freeways, because there is smart planning that went on here. We're not building a shopping mall down the road on this side and then a housing development over here and maybe an entertainment center down the road. No, this has all come together into one project.

And it will boost the economy with an estimated 2,800 jobs, from construction alone and 19,000 permanent jobs. When it's fully built out the city says that the construction will have created an economic impact of $5.7 billion and a lasting impact of $2.7 billion annually.

The economic stimulus is exactly why we have been pushing these projects and why we have been pushing out our bond money as quickly as possible and that's why I recently also signed AB 1252, to accelerate the process even more. In fact, the Township 9 development just down the street and the Triangle Project across the river in West Sacramento received a combined total of $25.5 million as a result of this economic stimulus effort authorized under AB 1252. So I'm working with the legislators now so that we push out more money from our Infrastructure Bond money to create more jobs and to stimulate the economy even more.

So I congratulate everyone here in the Sacramento region for this fantastic project and for this great news. And I think this investment will honor Sacramento's past and enhance the capital city's future also. So thank you very much again. I'm excited, because for too long I've been driving by this area here and I have said to myself, "When are they going to develop this area here? It looks ugly. We can do a great job here." And now I think that we are on our way to do a great job and to build one of the best projects.

So with that, I want to say thank you again. And I want to bring out Senator Cogdill to say a few words and then after that I want to come back, answer some questions that the media has and also make some statements about the fires and to give you an update on the fires and the heat conditions. Thank you. Senator Cogdill, please. (Applause)

SENATOR COGDILL: Thank you, Governor. Thank you all for being here today. This is an exciting day. This is one of the things that we certainly look forward to, those of us that serve in the public service arena, to be able to come out and do something as positive and be part of something as important as this project.

And I certainly want to commend the Governor for his vision and foresight and his determination to see to it that this state moves forward on a number of areas relating to infrastructure development that we have so sorely neglected for so long. So we certainly owe the Governor, I think, a great deal of appreciation and gratitude for, again, the hard work that he's done in this area. Governor, thank you. (Applause)

The Governor mentioned AB 1252, which was certainly a bipartisan effort, to get $300 million worth of stimulus out into the economy when, again, it's needed so greatly right now. We were just very pleased, as Republicans, to be part of that effort and are glad to see that there will be about $150 million that will go for transit improvements that are so, again, important and needed and have been long overlooked in this state; things like grade crossings and monies for local government to do a lot of the needed road work that we all experience on a daily basis, so we're very pleased to see that.

And as the Governor pointed out, we continue to make bipartisan efforts to work and try to find ways to get more of this money out and get it to work. This is a great time to do these improvements; interest rates are at their lowest. We all know what's going on as it relates to the economy and the difficulty in the employment sector and the need to provide jobs. Bids are coming in, they're telling me, well below what they were originally anticipated. So it's a great time to do this work for a number of reasons and again, I'm just very proud to be a small part of it and glad to be here today at this very historic moment.

I want to now introduce someone that's certainly no stranger to any of you, a good friend of mine, I'm pleased to say and certainly one of Sacramento's favorite sons, Senator Darrell Steinberg. Darrell? (Applause)

SENATOR STEINBERG: Thank you very much, Senator Cogdill, for your nice introduction. I want to bring up my other partner, if you will, in all things Sacramento when it comes to the legislature, Assemblymember Dave Jones, to share the stage and make a few comments. (Applause)

Let me thank the Governor, as Senator Cogdill did, for your outstanding leadership in helping push through these infrastructure bonds in 2006 and in making sure that your administration is doing everything you can to get this money out quickly for the benefit of the community and the benefit of the people.

I want to also thank Senator Perata -- who is not here today, but I know was absolutely a driving force behind much of this -- Senator Cogdill, Speaker Emeritus Núñez, who was speaker at the time and Mayor Fargo, our city leader, who has positioned the city very, very well when it comes to getting the right projects funded.

This is an exciting time for the Sacramento region. And what this means to all of us -- to me, you can boil it down to three things. First of all, for Sacramento and for other regions throughout the state, downtown revitalization and housing downtown is more than just a cliché. This represents a reality. Riverfront development is more than just a dream. It's going to happen right here on the banks of the Sacramento, in the cities of West Sacramento and Sacramento. And economic stimulus, which is so central to helping alleviate our lagging economy, the state of California -- despite all of our other problems, natural and manmade -- despite our problems, we are showing that government can be a catalyst for economic stimulus in the right way.

And so I'm thrilled to be here and to represent a city and a region that is on the forefront of showing how to get it done and showing how to get it done right. Congratulations to everyone.

Before we bring up our great mayor of the city of Sacramento, Heather Fargo, I want to ask Assemblymember Jones to make a few comments.

ASSEMBLYMEMBER JONES: Thank you very much. If you look around you in this space you can feel and sense the history. You can visualize the great locomotives being built here, the train cars being assembled, the tracks being forged. This was a center of commerce and industry that knit the nation together and helped make us the great nation we are today.

But that day has passed. Here we're celebrating a new day that's dawning, a day of reinvestment in sites like this to make them active and vibrant again, to make them places where people can live, shop, dine, have jobs. This is a great day for Sacramento. Not only this project, but the T9 Project, the Broadway Lofts, the Triangle just across the river, the hotel in Woodland, all of these projects represent a tremendous opportunity and also represent a great deal of work on the part of those that represent us in all levels of government.

I want to join in thanking the Governor for his fantastic leadership, both in supporting these projects, but also being a champion for the bonds that the legislature passed two years ago. I want to thank as well the Senate and Assembly leadership, Senator Steinberg, who has been a tremendous advocate for these projects, Senator Perata, Assemblywoman Karen Bass and our Republican leader in the State Assembly, Mike Villines and the Senate leader in the Senate, Dave Cogdill. And of course our mayor and city council. Projects like this don't just happen, they require a great deal of planning and forethought and Mayor Heather Fargo and our council have taken the steps necessary to position this city to do as well as it has done in obtaining this assistance.

And finally, the developers who get it, who understand the importance of making the risky investments in sites like this, Thomas Enterprises, T9, Mark Freidman and his partners across the river and others. And then, our community. Sacramento understands the value of these sorts of investments, they're willing to support it, they're willing to pay for it and they're eager to see it happen. Congratulations to one and all. Thanks very much. (Applause)

Mayor Heather Fargo. (Applause)

MAYOR FARGO: Good morning to everyone. I also want to start by adding my very sincere thank you to our Governor, Arnold Schwarzenegger. His vision in reinvesting in California and understanding the significance of infrastructure and the significance of the state, not only dealing with transportation infrastructure but flood protection and others as well, really understanding the role that the state has to play in helping cities across the state get their feet back on the ground and move forward into the next economy. So Governor, thank you, thank you, thank you.

In terms of the projects that we're here to celebrate today, it's hard to say enough good things about them. Where we are right now, we're standing on the ultimate anti-sprawl project. We are standing at the site of, between this project and Township 9, of almost 15,000 housing units. Those people will be able to work right here in the Railyards or along Richards Boulevard, or they can walk to the Capitol. Maybe someday the Governor's mansion itself will be on the top floor of a loft here in the Richards Boulevard area, or if you'd rather have a view of the American River we could do it over by Township 9.

But this particular project, the project that we're here to celebrate today, the Railyards Project and Township 9, in addition to the project across the river, the Triangle Project and a little further down the Broadway Lofts, all of these projects are urban infill projects. And what they are is, they are projects which help us to reduce our carbon footprint, they help us to build a city which is more sustainable, they help us to give people the opportunity to walk to work, to walk to dining, walk to entertainment and have a very wonderful lifestyle right here in the city of Sacramento and the city of West Sacramento.

So I want to thank the senators, particularly our senator, Darrell Steinberg and the Assemblymembers and in particular Dave Jones, because they have really worked with us. We have put together a public-private-public-public partnership project here that includes the federal government, the state government, the city of Sacramento, as well as the private investors. And Thomas Enterprises and T9 and Nehemiah and everyone else involved really has done us a great service by providing projects that were incredibly competitive on a statewide level, because these are the right projects to do at the right time in the right place. So thank you one and all. (Applause)

And with that, I would like to introduce the next speaker, who is Robert Rivinius. He is the president and CEO of the California Building Industry Association and after all, this is about building future neighborhoods and future cities. Welcome. (Applause)

ROBERT RIVINIUS: Thank you, Mayor Fargo. In a state where it's very difficult to build affordable housing, this is certainly a major achievement. We've lost over 200,000 construction jobs in the state in the last two years, so this will put many of the people back to work. We too would like to thank the Governor for his vision and the legislature for putting these bonds on the ballot. And certainly, let's not forget the voters of California, who approved them. Couldn't do it without them. We also know that the 17,000 Californians who will benefit from the housing all of the bonds will provide will be very grateful.

With that, I'd like to introduce Danny Curtin, who is the director of the California Conference of Carpenters. Danny? (Applause)

DANNY CURTIN: Okay, that's good to hear. Thank you very much, Bob. You know, this site -- aside from the incredible dignitaries up here, you have a fabulous leadership team in this town and of course a great governor -- but this site itself is a fabulous site. We've been doing these infrastructure-type press conferences around the state, usually in a transit area or a certain kind of thing. But this site has a way of bringing it all together in a way that nothing else has that we've done up to this point.

There's a little park right around the corner over here, a little jewel in the middle of Sacramento, the Caesar Chavez Park and in that park there's a statue, long forgotten, of a guy named -- I think it's A.K. Stevens. And when you look at it, it's wonderful, you have no clue what it is. It turns out that A.K. Stevens was the master mechanic in the railroad yards here and I believe it was at the turn of the century.

It also turns out that this was the largest employer west of the Mississippi. This was the economic engine of the West Coast that really changed the nature of not only the nation but of California, as Dave Jones mentioned. And A.K. Stevens was a master mechanic, which I'm proud of. He was a union member and a union leader. But he also became a civic leader and in a way combines the kind of labor-management relationships and public-private relationships that the Governor constantly talks about and is so important to actually building the future of California.

The other part about this place that I think makes it so ideal is that it really was the hub of the economic activity that brought people to California, the diverse community that is California. And it was really, you know, the jewel of the area. What's happening now is we're doing it in a similar way, rebuilding this particular site in a way that also will make it a jewel and also will make it an image for the future. We're talking about a hub for transit of all kinds, where you come into this area and you can get from here to anywhere. You're combining the housing elements, you're combining retail, you're combining the whole public-private domain of what would be an urban center anywhere in America.

And I have to say, the Governor's guidance and leadership and vision at the state level has been fantastic, but the people you've had here over the years -- and it's interesting, we have an interesting group here -- Senator Steinberg, who is -- I don't know if I should mention, the pro tem elect for the State Senate, which is a pretty important position. Okay and Assemblyman Dave Jones and Mayor Fargo have had a vision of redevelopment for this area -- not just this spot, but the city itself.

And I'm often fond of saying it's really nice when a plan comes together, because it happens so rarely that a real plan is put together and thought through and it actually comes together. This did not come easily. The mayor and the city council have been working on a plan for this area for decades. And Mayor Fargo has been dogged and persistent and yet yielding when it needed to be to put a deal together, but keeping the character of Sacramento the way Sacramento likes it, which is an urban center that will be a center, as it was 100 years ago and 50 years ago, at the same time keeping the character of the neighborhoods in place. This will be a fabulous example of that.

The last thing I want to say is we've been working with the administration. I represent the Carpenters Union; we're always thrilled when we hear about jobs. But it's not just jobs, it's the kind of jobs. The Governor has pushed a vision for the future, you've heard about the infrastructure, the $37 billion Infrastructure Bonds and more on top of that. This is an example of it. But it's not just that. More importantly for the future, public-private partnerships involved in infrastructure, involved in developing the community, is going to be critical. The Governor and the leadership that you see behind us, both Republican and Democrat, have been very, very forceful in pushing that idea.

And I can't help but link it to one more thing that we've talking about quite a bit, since it was a rail center. What we're looking forward to in California is a high-speed rail that will move people from this center here, one of the wonderful centers in California, to L.A. within hours. (Applause) The Governor has been very supportive and we're going to talk about it.

So, having said all that, I want to say something very, very simple to end it out. This is not a red state or a blue state; this is a Golden State and it's time to get the red and the blue back together so that everybody works together and it's a Golden State. This is an example of what can be done. Senator Cogdill mentioned the bill to the Governor. There were no negative votes. There is a way to do this. The press plays on the differences, but in reality government is what this is all about. So it's really a pleasure to be here and be a part of it.

I want to thank, of course, all the leaders, but now I have the pleasure of introducing Suheil Totah, who is the vice-president of Thomas Enterprises. See how quickly we forget? Thank you very much. (Applause)

SUHEIL TOTAH: Thank you. Thank you, Danny, for the nice introduction. First, I want to start by also thanking the Governor for his leadership in supporting Proposition 1C and the other Infrastructure Bonds. Without those infrastructure dollars, projects like the Railyards and other projects in the state would not take place. It's really critical to have those initial public infrastructure dollars to get these projects going.

On behalf of Thomas Enterprises, I'm delighted to welcome you here today to the Railyards and to the historic paint shop. The paint shop is one of many buildings here at the Railyards that we plan on restoring. This one in particular we plan on converting into a public market, very similar to the Ferry Building in San Francisco or Faneuil Hall. And don't worry, there will be air conditioning.

We stand here, as many people have said, on the shoulders of those brave pioneers who came before us, including the heroic contributions of the Chinese community in the building of the Transcontinental Railroad, which started right here at this site, as well as the founders of the Central Pacific that owned this site and built the Railyards, including the former governor, Leland Stanford. The Railyards was once the heartbeat of the region, employing thousands of people and was the economic engine for the west.

Today, the Railyard sits abandoned in the heart of downtown Sacramento with virtually no infrastructure, beautiful artifacts that are slowly deteriorating and an economic engine that has sat idle for years. This site, equal in size to the central business district, will create 40 new downtown blocks for the city of Sacramento, for the region and for the state. But now, today, with modem-day pioneers, including the perseverance of our company founder, Stan Thomas, the partnership with the city of Sacramento, our partnership with the state and the leadership of this Governor, the Railyards will be reborn. Jobs will be created and the Railyards will once again become the economic engine and will move into high gear.

After a seven-year journey for our company in working on this project, we can now together begin to transform this site and more importantly the region, into that first-tier region it deserves to be as the capital of the great state of California. Thank you very much. (Applause)

I would like to now introduce Scott Syphax, the president and CEO of Nehemiah Corporation of America. (Applause)

SCOTT SYPHAX: Thank you, Suheil. It is, as Suheil and others have said, an historic day for Sacramento, because for those of us who have worked in this community for decades, to try and revitalize this central area and to bring life to the region in the way it should be, this is the first day of the rest of our lives.

I wanted to say first, thanks to Governor Schwarzenegger for his leadership and that of my own delegation, Senator Steinberg, Assemblyman Jones, the mayor of Sacramento, Heather Fargo, the city council, Rob Fong, who spent a whole day sitting in chairs with us in Los Angeles recently and also the local leadership and my business partner Steve Goodwin of Township 9 and Johan Otto and the leadership of the river district that the Railyards and Township 9 sit within.

The jobs and the housing and the economic vitality of the Railyards is going to be complemented by Township 9, which is a 3,000 unit housing and mixed-use development which will have a million square feet of office, 150,000 square feet of retail and is going to be the first stop of light rail MOS-1 -- Minimum Operating Segment 1, for you techies -- on the way to building the DNA Line out to the airport.

We're excited because of the fact that not only are these dollars going to be the catalyst to kick start a new, robust downtown, but we're also excited because of the fact that it does really embody the type of public-private partnership and bipartisan work that can be done in making California work. And so I want to applaud the legislative, gubernatorial leadership, our local leadership and say let's roll up our sleeves, let's get started, let's start knocking things down so we can start building them up. Thank you very much. And I'd like to turn this over to Lynn Jacobs. (Applause)

DIRECTOR JACOBS: Thank you, everyone. Before I bring the Governor back up to answer questions, as he kindly offered to do, I'd like to introduce my colleague, Will Kempton, from the Department of Transportation. I'd like to also introduce Ruth Coleman, from the Department of Parks. Ruth? And Maureen, where are you, from DTSC -- there you are. Maureen Gorsen from DTSC. (Applause)

The reason I'm introducing them, because I could introduce everyone in the audience -- we're all important people here today -- is that they also are investing state funds in the Railyards Project and we're working collaboratively on the infrastructure, parks and brown fields cleanup on this project as well as housing, although today we're here to celebrate housing and infrastructure in particular.

So I'd like to bring the Governor back up to answer questions and he's going to update us on the fires also.

GOVERNOR SCHWARZENEGGER: Thank you very much. Let me just bring you up to date on the fires. As you know, that we have fires all over the state of California; there were approximately 1,700 fires that burned all over the state because of lightning. And they have been contained, there are now 300 or so fires left. But last night we found out that the fires flared up again in Butte County and we continue battling those blazes and those fires. We have evacuated now 10,000 people that had to be evacuated, 68 patients at the Feather River Hospital also had to be evacuated. And of course there are shelters for animals and people that are up and running in those areas.

We have so far of the BTU Fire, the Lighting Complex, there are 49,000 acres that have burned total so far, 40 percent of them have been contained, 60 buildings have been destroyed and 3,800 structures are threatened right now. We have 2,773 personnel, firefighters, fighting those fires, 313 fire engines are working there. So far 10 firefighters have been injured and we hope they recover very quickly.

I think it is very important that we put all the resources in that area because of the very dry weather that we have right now and the high temperatures, so those fires anywhere in the state could flare up again, so it is very important that we pay close attention to that.

And I think it's very important also for people to know that, because of the tremendous high temperatures, that everyone should be very cautious. They should drink enough water, they should have their rest, stay in cool places. Especially the people that are working outside, it's important that they have their rest periods and they have places to go where there's shade and they drink enough water. I think it's also important for people to look at their neighbors. We have a lot of vulnerable citizens that are around. We need to check on them, we need to check on animals all the time to make sure that everyone is safe. So we have to help each other.

I also want to urge the people of California to conserve energy. Do everything that you can, because there is a tremendous demand on our energy and on our power plants right now because of the high temperature and to put your thermostat at 78 or turn off your air conditioning when you're not at home. It's very important that you conserve energy.

So with that I would like to open it up to questions, please.

QUESTIONS/ANSWERS:

GOVERNOR:                         Yes?

QUESTION:                           You mentioned the Transcontinental Railroad in your remarks and the importance of infrastructure, so my question is also about infrastructure, a ballot measure coming up in November, Prop 1, as you know, a high-speed rail system that would take people at high speed from San Francisco to Los Angeles. Is that good public policy? Do you support it? Is it something that you think Californians should endorse in November?

GOVERNOR:                         I think that it is one of those projects that Democrats and Republicans again can get behind. I think that we need high-speed rail. If you think that right now our trains in America are running at the same speed as 100 years ago, that's not progress. I think we can do much better than that. There's no reason why Japan and China and Germany and France and all those places have high-speed rail and we don't. I think California is always cutting edge. I think we should be out there, we should be the first state in the United States to build a high-speed rail.

I think that the bond package is a good beginning. The important thing is, though, that we have follow up and that we have all of the tools available so we can do the public-private partnerships that Danny Curtin has talked about just earlier. I think that's the way we can get this built as quickly as possible, because it needs approximately $40 billion to get this project done and the bond measure is only $10 billion. But I think with a public-private partnership we can do it, so I'm very enthusiastic about it. I'm 100 percent behind it, yes.

Yes, please. Can we turn the mike on?

QUESTION:                           There we go.

GOVERNOR:                         There we go.

QUESTION:                           That hasn't happened to me in while.

GOVERNOR:                         No, exactly.

QUESTION:                           For those of us who are covering the state budget, I'm interested in your initial reaction to the Conference Report that was released last night, specifically the large package of tax increases. Is there a way out of this problem without raising some taxes?

GOVERNOR:                         Well, first of all, I think I'm very pleased that the negotiations are moving along. I have met this week with all of the leaders, Democratic leaders and Republican leaders. I think they are meeting regularly and they are working on it, to see how it can be done. As you know, in my budget I have proposed additional revenues through our lottery, to take future earnings and to securitize them. And I think that's one way of going, but they have maybe another way of looking.

So I think that's the good process now, that Democrats and Republicans -- we have handed in our budget proposal, so everyone knows what mine is. But now the Democrats and Republicans have to work it out and I hope that they work as quickly as possible, because we are running out of time. I think they know that and they are making an effort, so I think the key thing is that they continue working at that.

We have to all recognize that compromise has to be made on both sides in order to get this done, because there are some that have recommendations that are more to the right, others have recommendations that are to the left. I think the action is in the center, like I always said and I think that's what I'm looking for and I think this is the only way we can really serve the people of California.

Yeah, please.

QUESTION:                           It sounds like you're receptive, at least, to some of these ideas that the Democrats were talking about, such as raising income taxes for the upper tax bracket. Are you receptive at least to some of these ideas that they proposed last night?

GOVERNOR:                         Well, as you know, that since I have proposed my January budget on January 10th I have said that everything is on the table, that I have an open mind and we have to be open minded to all the different ideas. I don't want to exclude anything. I want to have Republicans, who are working very hard to fix the budget, I want to have the Democrats, who are working very hard to fix the budget, bring all their proposals, put it on the table. There are a lot of creative minds over there at the Capitol. You know, we have had some answers and we think great answers, to find a solution. But they have maybe additional answers and ways of resolving the budget, so I want to be open minded to all of this.

Yes?

QUESTION:                           I have a question about energy conservation. A number of states and local governments, states like Utah, have implemented flex work schedules for their employees, four-day workweeks. It cuts down on gas use for employees and energy use in state buildings if they're only there four days a week. Should California be doing more to move in that direction, or is the state moving in that direction?

GOVERNOR:                         Well, we have been talking about that. But I think that the people of California have responded really well each year when we have asked them to conserve energy. Within a short period of time we have seen energy use being reduced by 5 percent and I think that's very helpful. So I think that the people of California are very responsible. They know that we have a short supply of energy and they respond very quickly to that. So this is why I urged the people of California to conserve energy. Now is a very important time because of the high temperatures. But we are looking at alternative ways of also conserving energy.

QUESTION:                           You've said everything is on the table with regard to the budget, but in the past you've also said you've been against new tax increases. The Democratic budget has a number of tax increases. Are you saying that you're now open, or changing your position of no new tax increases?

GOVERNOR:                         No. You know, I have always been against tax increases. But I always want to keep everything on the table, because you cannot go into negotiations and say don't talk to me about this, don't talk to me about that. You have to be open minded and that's the only way you can get a compromise done. So I'm open minded but I'm against tax increases. All right?

Yes, thank you very much. Thank you all. (Applause)