This is Part I of a two-part story
The Westside Council of Chambers (WC3) met for its inaugural 2011 State of the Westside “Making Business Work” event Oct. 25 to discuss the state of businesses on the Westside, which included a panel of four city managers and a deputy mayor.
Christina Davis, the president and CEO of the LAX Coastal Area Chamber of Commerce, is this year’s president of the WC3. She said the organization is a collaboration of 11 chambers of commerce and three business sponsors, and its mission is advocating for businesses on the Westside to further pro-business ideas for transportation, entertainment, tourism, and the environment on a local, state and federal level.
Geoff Maleman, WC3 governmental consultant, was the event moderator.
Panelists included Beverly Hills City Manager Jeff Kolin; Santa Monica City Manager Rod Gould; West Hollywood City Manager Paul Arevalo; Los Angeles Deputy Mayor Matt Karatz; and Culver City’s City Manager John Nachbar.
Maleman explained that rather than having one individual speak during the entire event, the panelists would be more interactive and speak about general and specific issues regarding their individual cities and the general business atmosphere on the Westside.
Asked which letter grades the panelists would currently assign to the Westside, Nachbar said that the Westside has been extremely fortunate and the economy is very vibrant in comparison to the rest of the state, giving it a grade of B+.
Arevalo noted some positive changes, and said he would give a grade of A in comparison to other regions regarding assets and resources, adding that meetings such as this one create better marketing opportunities.
Karatz said he is new to public service and joined the city administration just over a year ago to oversee housing and real estate. Over the summer he was appointed deputy mayor, with responsibility for the Department of Water and Power, Los Angeles International Airport (LAX) and the Port of Los Angeles, among other duties.
Congestion is a critical priority that needs resolution, but the Westside is thriving, exciting, and offers high paying jobs, he said.
Gould told the audience that the Westside cities are particularly well positioned for high-tech and creative arts, and are still in a good or better position than many in the region. The city is planning and building to develop a better future, but he believes it will be a number of years before the economy gets back to what it was in 2007, and the Westside is moving toward that goal much faster than other cities across the country.
Kolin, who has been in local government for 34 years, said he contrasts the wealth of resources on the Westside and how fortunate the area is compared with other cities in the state.
He recounted going to the city of Bell recently for a press conference announcing the new city manager. When Kolin arrived, individuals with placards were outside city hall – “never a good sign,” he said. He noted the reason they were there was because of a city council meeting that night with the issue of a three-year property tax increase on the agenda.
Maleman said that many in the audience are representatives of businesses, particularly small businesses throughout the Westside. He noted that a lot of “lip service” is given to the fact that small businesses are the engine of the economy and will drive the economy, ultimately leading to recovery.
He asked what each of them are specifically doing in their cities to attract and retain small businesses.
Arevalo answered that small businesses are the backbone of West Hollywood. Describing it as a small town, he said there are many start-ups, and that they only have two “big box” businesses, Target and Best Buy. The number-one role is to do a good job of running the city, he said. Being fiscally conservative, not creating and placing future burdens, having a strong chamber of commerce, an active business community, a number of business improvement districts, and a visitor’s bureau are all necessary components, he added.
Allowing the businesses to thrive and getting out of the way is the best solution, he said, and ideas that have come from the local businesses include a hardship task force, streamlining applications, special events, and working with cities.
Karatz said there are 400,000 businesses registered in the city of Los Angeles, and more than 300,000 of them are small businesses. The majority of businesses are small, and to try to figure out what to do locally to incentivize them to grow, the city has done a few things, for the very first time, Karatz said.
The mayor’s office has established an Office of Small Business to focus exclusively on the needs of small business, with a team of executives that work on policy and procurement issues tied directly to these businesses’ needs, he said.
Most of these small businesses don’t have a back-office infrastructure to work through the city’s procurement process, said Karatz. The city procures approximately $2 billion in contracts every year, and most of the time it’s the big companies that compete and win.
The city’s procurement process has been reworked so that small businesses and really large businesses only need to apply once. Once the business is approved as a vendor, “you’re good to go,” he said.
The large stack of applications only need to be done once, not every time a business is bidding on a city contract. A local preference ordinance has recently been approved that gives local businesses a competitive edge for government contracts, Karatz noted.
Between the Port of Los Angeles, Los Angeles International Airport, the Department of Water and Power and every city department, over $2 billion per year is spent on contracts, he explained. The city is giving an 8 percent competitive advantage over companies in other states, and it encourages other businesses to come to Los Angeles, as small business is critical to the city.
Gould said that Santa Monica is fortunate to have the lowest commercial vacancy rate in the whole region. Much of that has to do with high tech start-ups flocking to the city, and he said small businesses are driving the economy.
“Santa Monica has had a horrible reputation for planning and permit processing. It’s been described as Byzantine, unpredictable, impenetrable and worse, and consequently, the city has been trying to improve the way it treats applications for new businesses by trying to take off 20 percent of the time it takes to complete the process,” said Gould.
There is a tremendous alliance to identify the businesses that are leaving or coming to the city, and the city is assisting them in making that choice, said Gould. Supporting local businesses is another important component.
Kolin said Beverly Hills is also working with the same issues, with delays in processing development and getting permits. Two task forces have been formed: one that focuses on the overall attraction and retention of businesses, and the other to specifically streamline the development review process.
“The city’s procedures are as difficult as the other two cities, particularly for the small business that doesn’t have the experience in navigating through the process. The city is trying to cut out steps, and is instigating a system of programs. The chamber of commerce plays a large part in the process,” Kolin said.
Nachbar noted that Culver City has been working on many of the same things, such as speeding up application processes, and trying to be as business-friendly as possible. The chamber is a vital component as well, working to nurture the small business relationship.
“Working on the infrastructure, creating more energy and synergy in the business environment, we’re able to do this with a very strong and aggressive redevelopment agency,” Nachbar said.
He noted that the activity at the state level regarding community redevelopment agencies has prompted Culver City to move assets inside the city. Nachbar said Culver City is working on a mixed-use development project on a 110,000-square foot site as well as adding retail in downtown.
“The important point is to keep investing and trying to enhance various aspects of infrastructure that continue to keep the city strong,” Nachbar explained.
Maleman said there has been a lot of discussion about the proposed AEG football stadium in downtown Los Angeles. He asked Karatz where the project stands right now, and what impact it might have on the Westside cities.
Karatz said he has been spending a lot of time with his colleagues working on the potential Farmers Field plan, but he noted that the impact is not so much in bringing a professional football team to the city, but what it will do to the convention center business.
“With the transformation of an ancient convention center facility which does not and cannot compete for the biggest conventions, you look at an opportunity like this and you say, ‘these don’t come around that often’ where a private enterprise is prepared to solely fund a $1 billion-plus stadium which can be used for more than just football,” Karatz noted.
“This would take the city of Los Angeles from 15th in the nation in convention center business to the top five. For us it’s a game changer, for the region it ought to be a game changer,” Karatz said.
“We know that with the reconfiguration of the convention center space, which will create a much larger contiguous space, it will attract at least five or six major hotels to establish themselves in downtown Los Angeles to handle the convention business.
“We don’t have enough hotel rooms in Los Angeles to accommodate large conventions. With that ripple effect to the Westside cities as a bonus, we thank everyone early on for their support in this endeavor because we think the hotels in Santa Monica, in West Hollywood, the restaurants and new hotels in Beverly Hills will absolutely benefit,” said Karatz.
“There is no deal until there’s a football team,” said Karatz, “but we’re working very closely on this with everyone, day in and day out.”