Guest Opinion | Councilmember Rick Cole | Part One: Safeguarding Pasadena’s Economic Future

Pasadena can’t sit on its assets.

Fiscal challenges abound for California’s public sector. The State has seen a drastic fall in revenues after the post-COVID economic recovery and Federal bail-outs faded. The City of LA patched together this year’s budget by shrinking its workforce and extracting labor concessions to close a whopping $1 billion shortfall. The Pasadena Unified School District is grappling with ongoing deficits that require deep cuts to avoid takeover by the County.

The City of Pasadena’s $1.5 billion budget is precariously balanced with warnings by our staff that next year will be far more challenging.

All this comes before we feel the full impact of Federal funding cutbacks, layoffs and tariff wars. Perhaps President Trump will force the Federal Reserve to cut interest rates to spur more borrowing to prop up the economy. But that will only lead to a worse crisis down the road.

All kinds of red flags indicate economic trouble ahead, including an insane boom in crypto and a massive corporate bet on AI. Either could come crashing down and throw the national economy into recession.

Pasadena’s finances have been responsibly managed, with prudent reserves and a long-standing commitment to not spending one-time money on ongoing costs. Yet looking to the future, we can’t be complacent.

Residents take the scope of City services for granted – green parks, clean streets, rapid emergency response. But these are ultimately the return on past investment. Previous generations upgraded public infrastructure, technology and staff capacity. Even more fundamentally, today’s revenue base is the product of deliberate long-term economic development strategies.

Unfortunately, those strategies have reached the point of diminishing returns.

Decades ago, panicked City leaders feared that Pasadena would lose its pre-eminent place as the economic “crown of the valley.” During the decades of the Sixties and Seventies, the City’s Redevelopment Agency embarked on a radical “makeover” of the city’s core. Whole neighborhoods of low-income residents were bulldozed to make way for corporate headquarters and new higher-priced housing. Thousands were evicted from their homes and businesses to make way for the 210 Freeway and 710 extension. Four blocks of our Downtown were demolished to build a suburban-style enclosed mall.

It was a brutal and often racist strategy — and it encountered fierce resistance. Ultimately, a coalition of neighbors and preservationists halted the bulldozers before Old Pasadena was wiped out. Plans were defeated for a dense corridor of high-rise offices on Los Robles south of Colorado. Opposition kept the City from razing the low-income Lincoln Triangle neighborhood for an auto mall.

Yet when the dust settled, the landscape of Pasadena was fundamentally reshaped. Redevelopment had lured thousands of new office and retail jobs to Pasadena’s downtown. These became the foundation of our local economy.

With the demise of massive demolition, the city shifted to revitalizing what was left of the City’s historic fabric. The shining example, of course, was Old Pasadena. Slated for destruction, instead it saw a revival sparked by artists, entrepreneurs and young people looking for something unique.

The City shifted direction, embracing an ambitious effort to support Old Pasadena’s renaissance, including accommodating additional visitors by building parking structures instead of tearing down buildings for parking lots. However, shoppers and diners resisted paying for parking in the new structures, preferring the scarce street parking — which was free.

A deal was struck to install parking meters. Merchants dropped opposition in exchange for devoting 100% of the revenue to improved maintenance, security and beautification of Old Pasadena. The strategy worked! Old Pasadena blossomed — sales tax quadrupled and property tax tripled over the following decades.

Which brings us to today.

In the short run, we can economize to balance our budget. Years of prosperity have led Pasadena government to be generous with staff pay and benefits and sometimes extravagant when it comes to spending on consultants and high-priced goods and services. It won’t be painless, but spending can be reined in without drastic cuts to community services.

What’s more worrisome is the neglect of maintaining and modernizing our infrastructure. Pasadena is hardly alone in this – and in fact the City’s leadership can take credit for some impressive investments in recent years. Upgrades to the Rose Bowl have kept our 100 year-old stadium competitive in an era when similar landmarks have been shuttered or torn-down. A big hike in sewer rates is funding a major catch-up in relining our 400 miles of decrepit piping. Water rates were also raised last year to tackle similar challenges with our water pipes and wells. The Central Library is undergoing a $200 million modernization and seismic retrofit.

Yet we face a more than $2 billion backlog of repairs and improvements in our capital budget. Especially glaring is the condition of our streets. While City Manager Miguel Marquez gets credit for essentially doubling our annual paving funding in each of the last three years, that was needed just to keep streets from deteriorating further (which rachets up future repair costs). The Eaton Fire underscored the critical need to invest in our outmoded fire stations and a permanent fire training facility.

The City is not the School District. There is no dire crisis – yet. But if that lulls us into complacency, it won’t be long until we discover we’ve been asleep at the wheel. And then it may be too late to steer away from real pain.

In Part Two I’ll sketch out pro-active steps we can take now to ensure our City remains fiscally sound. Acting now will not only ensure Pasadena can continue to provide high-quality services, but also provide the resources to tackle our backlog of infrastructure needs.

Rick Cole is District 2 Councilmember. He has served as City Manager of the cities of Azusa, Ventura, and Santa Monica as well as Deputy Mayor for Budget and Chief Deputy Controller for the City of Los Angeles. He’s a member of the Council Finance Committee.