What the City Needs to Do on Economic Development GUEST COLUMN By Roberto Barragan Two years ago, I had the opportunity to discuss my ideas for economic development in the City of Los Angeles during my interview for the job of Deputy Mayor of Economic Development. Though eventually, I was not selected for the job, I have continued to propound those same ideas here in the San Fernando Valley and in the City of Los Angeles. I believe those ideas are more relevant than ever. Economic Development Department: While trying not to sound like a broken record, this city needs an Economic Development Department that combines the funding resources and the city’s expertise under one authority. Today, it still takes a room of 20 people to get a project done. Better that the Deputy Mayor in concert with a mayor appointed and City Council confirmed commission provide strategy and control to a process that is completely haphazard and hit or miss. An economic development department can bring us to a more city driven strategy versus a developer driven response mentality. Smaller cities decide what kind of economic development they want in their community, then go out and seek to implement and execute that strategy. The commission could establish the strategy, as approved by the council and affirmed by the mayor, and the deputy mayor and city staff would implement. I believe that business and residents would appreciate to know what is desired and what is not in the many areas of LA before they invest millions or before they receive notice of a multi-million-dollar project on their doorstep. Neighborhood and locally based economic development: While collaboration with local merchant associations and chamber of commerces is a priority with council members, it is not a priority citywide. That is a mistake. Not only do these groups provide a strong constituency for the support of small and medium sized business, they tend to support policy and planning decisions that support economic development. Rather than worry about the new Neighborhood Councils, the city should work with local business groups to create a more inclusive economic development reality. Mitigation programs in the face of business dislocation by LAUSD, MTA, and CRA: Over the past two years 300 businesses have either been closed down or dislocated by the school construction of the Los Angeles Unified School District, the construction of the East West Busway by the Metropolitan Transportation Commission, and the redevelopment of mid Wilshire, Hollywood and North Hollywood by the Community Redevelopment Agency. In each case little help was provided for the relocation of or the economic impact upon business. The excuse has always been that they are precluded from compensating business for their losses. That has always been hard to believe especially in light of the astronomical budgets these respective agencies manage. Just their allocations to public relations would compensate and potentially avert the wholesale destruction of small business city wide. Mitigation programs that resemble the disaster programs of the Small Business Administration should be emulated. In the case of SBA, professionals calculate the “economic injury” a business has suffered as a result of a disaster (No one can tell me that what the MTA did to Sunset and Lankershim boulevards wasn’t a disaster.) Thereafter, SBA makes a very low interest loan to the business in that amount. Another method of mitigation might be paying the rent of an affected business for the period of impact or paying all moving and move in costs for a relocated business. It is hypocritical of all of us who propound the virtues of business and cry about businesses leaving the city when we don’t even take care of the businesses who are already here. Catalytic economic development: The mayor’s office should provide leadership and support to the City Council to move projects in communities that not only create jobs for local residents but leverage area wide economic impact. This will require a move away from retail oriented development and its tax and ribbon cutting benefits to manufacturing, housing and medical/research opportunities. Some projects that continue to face uncertain futures and inadequate political, and accordingly financial support, include: -Goodyear Tract Potentially acres of industrial development and thousands of jobs -Sears Housing should be a priority -Van Nuys Airport Needs separate commission to focus on long term development and business support -Canoga Park Industrial Zone The MTA should sell the railway to existing industrial users. -Sunquest The City should take back this property and re-RFP this site to a capable developer. Back to the Zones: With the demise of the L.A. Community Development Bank, the City should rededicate resources to the various city Enterprise and Empowerment Zones. Except for few city staff, there is little if any general business assistance support to businesses located in the federally sponsored Empowerment Zone or the various state sponsored Enterprise Zones. The city should outsource both informational as well as technical efforts to help business take advantage of available tax credits. Citywide union apprentice program: This city has never been more union friendly. But do we have the partnerships between city workforce activities and union apprenticeship programs? And do those partnerships include the billions of dollars of construction being spent by the City, LAUSD, and MTA? Customized recruitment: The business services strategy of the Workforce Investment Board has failed. The WIB should chuck its high cost/no result strategy and seek organizations who can establish customized recruitment programs with larger business to achieve business oriented job placements in quantity. Industrial development: As a member of the Mayor’s Industrial Development Taskforce, I have become educated as to the challenges to developing and protecting industrial space in the City of Los Angeles. I support the LAEDC’s call for a more proactive strategy and believe that the city should seek to discourage the conversion of significant (more than 10,000 sq. ft) of industrially zoned property to commercial uses. And, education This city cannot hope to impact unemployment, homelessness, unmet workforce needs, income inequity and even crime and gang activity in low income areas until the high school drop rates, some as high as 55 percent in areas like Pacoima are lessened. LAUSD has made strides to improve test scores, better manage class size and build more and better school facilities. Community organizations have helped hundreds of students to get in to college. What we need now is partnership between the city, LAUSD and relevant organizations to make sure thousands more graduate from high school. These would have been my priorities over the past two years. In the meantime, I am enjoying making a difference in the lives and successes of hundreds of businesses a year here at VEDC. Roberto Barragan is president of the Valley Economic Development Center
