In the euphoria after his victory last week, Los Angeles Mayor-elect Antonio Villaraigosa was making lots of promises to lots of constituents.

He said he would reduce traffic congestion, extend the Red Line subway out to the ocean, bring thousands of “good middle-class jobs” to L.A. (and make sure the people holding those jobs could afford to live in the city), improve education, and keep a lid on crime in part by adding 1,000 cops.

An ambitious agenda, but is it realistic? Jeff Kavin doubts it.

“The mayor doesn’t have much power to affect these big issues,” said Kavin, co-owner of Greenblatt’s Deli in Hollywood. “You have to wonder just how much the mayor can do to reduce gridlock, for example.”

Villaraigosa can look forward to leading a city of cynics. Last week’s meager voter turnout illustrated the low expectations of Angelenos when it comes to local government. There is some reality behind those expectations: No mayor has the political muscle to carry out the kind of structural makeover that most agree is needed for L.A.’s economy.

Traffic cannot be improved without major funding help from Sacramento and Washington.

Out-of-control housing costs are a function of the marketplace and beyond the realm of any single mayor.

Workers’ comp costs are a state matter.

Education is left up to individual school districts and the state.

Local taxes are pretty much determined by city councils.

So how does Villaraigosa fulfill all those promises?

The answer, according to a cross section of businesspeople and business advocates, is not trying to do the impossible but rather setting incremental goals that at least stand a chance of being met and then assembling the people and resources to achieve them.

“There’s a very small list of problems the mayor can solve on his own. A smart mayor realizes this and starts to set priorities and build coalitions around those priorities,” said Martin Cooper, chairman of the Valley Industry and Commerce Association. “It may not be as much as we in the business world may want, but at least if the mayor is moving in the right direction, business will be right there with him.”

Big Apple’s renaissance


An instructive example is what happened in New York in the early ’90s.

The nation’s largest city was plagued by rampant violence, falling property values and an exodus of companies for friendlier and cheaper locales. Shortly after he was elected, Rudolph Giuliani decided to make reducing crime his top priority; he teamed up with then-New York police commissioner William Bratton to hire more officers and launch a crackdown on crime.

The crackdown proved controversial at times, even raising national headlines for notorious incidents like police beatings. But crime rates plummeted, people felt safer and businesses decided to keep their investments and facilities in the city.

“This brought a huge economic benefit to New York for a prolonged time and it showed that if you can make significant inroads on one or two of these really big issues, you can break a logjam,” said Brendan Huffman, legislative advocate for the Los Angeles Area Chamber of Commerce.

Mayor James Hahn consciously tried to repeat the New York approach, even bringing in one of its chief architects, Bratton, as his new police chief. “Make the streets safe and everything else will follow,” Hahn said repeatedly.

In L.A., though, it hasn’t worked that way. Violent crime rates have fallen by double-digits in most crime categories and businesses have come back into certain areas of the city, like Hollywood and downtown.

But bringing crime more under control has only served to point up the city’s other major problems, chiefly traffic congestion, education and the lack of affordable working-class housing.

“I’m losing some of my best employees to Nevada where they don’t have to commute for hours to get into work,” said Kavin, the deli owner.

Hahn did work with the City Council to set up an affordable housing trust fund that was supposed to have $100 million put into it each year; it only has about half that. More importantly, the dollars are earmarked for rental units for residents whose incomes are below the poverty line not for people with middle-class incomes.

“Look, buying a single-family home on L.A.’s Westside is unrealistic for most people. But the rank-and-file person might be happy in a condo on top of retail in a nice neighborhood,” said Greg Lippe, a certified public accountant who co-chairs the state issues committee for the Valley Industry and Commerce Association.

“That’s something that Villaraigosa could promote through public-private partnerships or with some creative incentives,” he said. “For example, he could say, ‘If you as a business owner would set aside some funds to help your employees afford homes or condos nearby, then I’ll give you a moratorium on the business tax.'”

Jobs, housing


When it comes to reducing gridlock, the key is setting priorities to make the best use of limited funds and then going all-out to secure as many state and federal dollars as possible.

While it’s generally agreed that extending the Red Line subway to the Pacific Ocean would reduce congestion along the busy Wilshire Boulevard corridor, the cost $5 billion or more is viewed as unrealistic.

“We need a reality check here. Is building the Red Line really the best use of limited dollars? Or would that money be better spent on a variety of projects, like busways?” Cooper said.

Once Villaraigosa sets his transportation spending priorities, he has to use his extensive Sacramento contacts and his more limited Washington contacts to line up fiscal support.

“He has got to be the champion of these things in Sacramento,” said Robert Rodine, a principal in the Polaris Group, a San Fernando Valley management consulting firm. “I wish I could be optimistic here, but I don’t see the necessary dollars coming out of Sacramento or Washington, no matter who is mayor.”

David Abel, publisher of the Metro Investment Report newsletter, said there’s plenty of money already here that can be used to improve the city’s infrastructure.

“We’ve got $11 billion to $15 billion in unspent bond monies for new schools, dollars set aside to build tens of police stations, park monies to employ all these dollars are just waiting to be used,” he said. “What’s been lacking for years now is the harnessing of these resources around common, positive public goals. Villaraigosa has to surround himself with the best and the brightest people and come up with the best ways to use these monies.”

If it were only that easy. For years, businesses in L.A. have complained about the comparatively high cost of business taxes. After an 11-year effort, the city finally approved a business tax savings package last year that exempts thousands of small businesses entirely and reduces taxes 15 percent over five years for the rest.

Yet even with this package, many L.A. businesses will be paying significantly higher taxes than anywhere else in the region, according to a study by local economic development consultant Larry Kosmont.

Local business advocates say they want further changes to achieve greater savings. Villaraigosa hasn’t committed to further business tax reductions.

But Kosmont said that he doesn’t expect any more significant reductions in the business tax. “Given its structural budget deficit, I’ve concluded that L.A. simply can’t cut its business tax much more,” he said.

“Right now, I don’t believe that’s the top issue,” Kosmont continued. “The main problem is our inability so far to target the growth industries, to bring more high-paying jobs into the city. We don’t want to let any more of these stem cell research monies pass us by,” he said, referring to the Hahn administration’s late bid for the headquarters of the state’s new stem cell research institute.

The city’s bid was rejected in the first round; the headquarters ultimately went to San Francisco.

During the campaign, Villaraigosa touted his work on behalf of a proposed biomedical park near L.A. County-USC Medical Center. But that project has met with years of delays, thanks to complications from the site’s multiple owners. In February, an agreement was finally reached among two of the major land owners the city and the county to move ahead.

At his first post-election press conference at a job training center in Crenshaw, Villaraigosa again stressed the need to create high-wage jobs. He mentioned reconstituting the business team concept as it was under former Mayor Richard Riordan to focus on recruiting companies in high-growth industries.

Kosmont said that Villaraigosa needs to start attracting those industries. “Do they need more capital, do they need special training, a lot of space? All these questions need to be answered on an industry-by-industry basis,” Kosmont said. “Only then can we aggressively go after these high-paying jobs that Villaraigosa has promised to go after.”