Local business interests scored some wins and suffered some setbacks in last week’s off-year elections throughout Los Angeles County.
In Malibu, voters rejected by a margin of 57 percent to 43 percent a Whole Foods-anchored shopping center project in the first test of a law enacted last year to sharply limit development in the coastal town.
The 38,400-square-foot shopping center project, led by developer Steve Soboroff, was proposed for the Civic Center area and featured a 20,000-square-foot Whole Foods. But the project had to be put before voters under 2014’s Measure R, which requires a citywide vote for any project with more than 20,000 square feet of retail, commercial or mixed-use space.
When contacted by the Business Journal to discuss the election result, Soboroff referred to comments he had previously made to the Malibu Times. In that interview, he indicated that the defeat of the shopping center proposal at the ballot box likely means other projects coming down the pike would meet the same fate.
“It’s categorically not possible to win an election to build anything in Malibu,” he said.
But last week’s vote might not be the final word on the shopping center. Soboroff and another Malibu developer, Malibu Bay Co., filed a lawsuit in April challenging the constitutionality of Measure R. That lawsuit is pending in state court. If Measure R were to be overturned, it’s possible the project could proceed despite Tuesday’s election results.
Meanwhile, Hermosa Beach voters overwhelmingly approved a hike in that city’s hotel bed tax. Eighty-five percent of voters backed Measure H to increase the tax to 12 percent from 10 percent. The measure had no organized opposition, as local hotel operators remained largely silent during the campaign. The new 12 percent rate matches several surrounding cities, but is less than the 14 percent tax for L.A. hotels.
In other election results, parcel taxes for various municipal services were approved or extended in San Marino and South Pasadena as well as the Las Virgenes and Walnut Valley school districts. But a parcel tax was defeated in Claremont. In addition, voters approved a $350 million bond measure for the Compton Unified School District.
Turning to the candidates on the ballot in dozens of local cities and school districts, one local business group compiled a pretty good track record. The Los Angeles County Business Federation’s political action committee saw 18 of the 24 council candidates it endorsed emerge victorious – or leading in tight races.
Those wins were in Baldwin Park, Calabasas, Diamond Bar, Lynwood, Maywood, Montebello and Pico Rivera. The only city where the group’s candidates lost was Hermosa Beach.
LAUSD Revisits Small Biz Contracts
Los Angeles Unified School District is poised to revamp its small-business contract policy after an audit found district officials overstated the participation rate for small businesses.
The massive school district serves more than 700,000 students at nearly 1,300 facilities across much of the county. The district awards more than 4,000 contracts worth at least $1.3 billion to companies each year. A 2003 policy set a target of 25 percent of those contracts going to small businesses, giving preferences of up to 10 percent in the bid scoring process.
For several years, the district’s procurement division had been reporting small-business participation rates far exceeding that 25 percent – indeed, in 2014 the division reported 48 percent of contracts going to small businesses. That’s superb by any standard; most government agencies struggle to reach 25 percent.
But an internal district audit released in June found that figure vastly overstated the rate of contracts actually awarded to small businesses because it ignored at least one-third of the total contracts awarded, representing about three-fourths of the dollar volume. The audit cited several “data integrity” issues with the procurement division’s contract analyses.
The findings disturbed LAUSD board member George McKenna, who authored a motion calling for more monitoring to ensure all contracts are included in the small-business participation numbers.
“By policy, small businesses get preference in bids,” McKenna said in a statement accompanying his resolution. “The numbers don’t reflect that advantage.”
McKenna also took the opportunity to introduce a 5 percent bid scoring preference for firms owned by disabled veterans.
“I believe in recognizing the sacrifices of men and women disabled during military service,” he said.
The school board approved the entire motion last month; district staff must present to the board a new monitoring scheme by the end of the year.
Workers’ Comp Rate Cut
The good news for employers on workers’ compensation continues.
State Insurance Commissioner Dave Jones late last month recommended a 2 percent rate cut for workers’ compensation premiums on insurance policies renewing after Jan. 1. That’s on top of a 5 percent rate cut he recommended for policies that renewed after July 1.
In making that earlier recommendation, Jones cited lower medical costs for insurers likely resulting from reforms enacted in 2012. He did not issue a separate statement for his most recent recommended rate cut.
The commissioner’s recommendation is advisory only. Under California law, the commissioner does not set or have authority to reject workers’ compensation insurance rates charged to employers. But most insurance companies generally follow the trend line set by the commissioner.
The recommended rate cut, although welcome, did not go as far as employer groups wanted; they had backed a proposed 6 percent rate cut. But Insurance Department staff took a more conservative approach to estimating savings in medical treatment costs and Jones sided with his staff.
Staff reporter Howard Fine can be reached at [email protected] or (323) 549-5225, ext. 227.
