BEST/26inches/1stjc/mark2nd

DANIEL TAUB Staff Reporter

INDUSTRY This city is so dedicated to serving its business community that a McDonald’s located just off the freeway here doesn’t serve hamburgers.

Or French fries, or Coca Cola. In fact, this particular McDonald’s doesn’t serve food at all.

That’s because it isn’t a restaurant, but a life-sized set used by McDonald’s Corp. to film television commercials for its nationwide franchises.

In many ways, the Industry McDonald’s says a lot about this city, which has more businesses (1,150) than residents (690).

Industry, in fact, doesn’t even have residential zoning those 690 residents, 200 of whom are in a convalescent home, all live in housing built before the city was incorporated in 1957.

“Our business is business,” said Donald Sachs, executive director of the Industry Chamber of Commerce, which handles all promotion and marketing.

It’s therefore no surprise that Industry was ranked by the Kosmont Cost of Doing Business Survey as the least expensive city to do business in Southern California.

The reason for the top ranking can be found in a laundry list of benefits touted in promotional ads:

“No utility tax. No professional service tax. No manufacturing fees. No wholesale or retail fees. No city business license fees.”

The city also has no site plan or development review fee, no environmental initial study fee, no specific plan fee and no development agreement fee.

The only standard fee is a $250 filing fee and $1,000 deposit for zone changes and conditional use permits.

Industry also allows no curbside parking, which could interfere with the city’s flow of trucks moving to and from factories and distribution centers.

Industry is one of a small group of Los Angeles cities termed “industrial cities” municipalities with small populations, but very large business bases, primarily composed of manufacturing companies.

Vernon, Commerce and Irwindale are also in that class.

Cities like Industry don’t have to worry about maintaining large police or fire departments or full-time city councils.

It has just 15 city employees, and all services such as firefighting, law enforcement and road repair are contracted out to county agencies. “There is no desire on behalf of the city to have anything of their own,” Sachs said.

That means Industry is able to maintain itself without charging businesses the same taxes that most cities must charge in order to survive.

“I think Industry has an unusual set of circumstances,” said Larry Kosmont, president of downtown L.A.-based consulting firm Kosmont & Associates Inc., which produced the Kosmont survey.

“It is a city built to do business. The way it is created is that it can operate as an economic incentive machine,” Kosmont said.

Jack Kyser, chief economist for the Economic Development Corp. of Los Angeles County, said that in addition to having almost no business taxes, Industry also has the advantage of being in a prime location.

It’s located near a confluence of freeways and is loosely bordered by the Union Pacific Railroad on the south and the Southern Pacific Railroad on the north.

Industry also has a rich employment base to draw from in West Covina, Walnut, Diamond Bar, Whittier, Hacienda Heights and other neighboring communities.

John Gill, president of Industry-based Howard Fabrication Inc. said that many of the customers for his company’s stainless steel tanks especially customers in the food-processing business are in Industry.

“The companies that are here are our main core of business,” said Gill, whose company has 50 employees.

Although Industry’s lenient tax structure has allowed companies like Howard Fabrication to grow, it is not without its costs.

Industry has an ad valorem property tax rate of 1.9 percent the highest such rate of any city in Los Angeles County.

Vernon’s ad valorem rate a property tax based on the value of a business’ property is 1.03 percent, for example, and even the City of Los Angeles, the most expensive place to do business in L.A. County, only has an ad valorem rate of 1.05 percent.

“If you’re a manufacturer with a lot of equipment, it might not be as advantageous to be in Industry as being across the border in Irwindale or Vernon,” Kosmont said.

But even with a high ad valorem rate, 95 percent of businesses are still better off being in Industry than in any other city in the county, Kosmont said.

Both Kyser and Kosmont said that because of Industry’s unusual circumstances it would be difficult for other Southern California cities to follow its example.

“It’s a formidable formula for competitiveness,” Kosmont said. “I think only pockets of cities can operate competitively, but I think it’s unlikely that whole cities can operate this way.”

At A Glance:

City of Industry

Population: 690

Registered voters: 179

Employees who work in city: 70,000

Area in square miles: 14

Number of businesses: 1,150

Revenue from business license taxes: None

Revenue from sales taxes: $20.8 million for fiscal year ended June 30, 1996 (70.5 percent of city budget)

Budget per resident: $39,126

Date incorporated: June 18, 1957

Mileage of city streets: 53

Major features: Puente Hills Mall, Industry Hills Conference Center

Events: Annual snail and armadillo races.