For the first time in a decade, there’s a new power broker at Los Angeles City Hall: Mayor Karen Bass.
A native Angeleno and longtime state and congressional representative from South Los Angeles, Bass rode into office last December promising to do whatever it takes to tackle the city’s number one problem: the spread of homeless encampments throughout the city. In the election, she defeated the business community’s candidate, billionaire shopping mall developer Rick Caruso.
So far, Los Angeles business leaders and business owners are impressed with Bass’ level of outreach to them, her willingness to hear their concerns and promises of actions to make Los Angeles an easier and more affordable place to do business.
“On the campaign trail, I heard from the business community that they have not only felt completely ignored by City Hall, but that City Hall has been openly hostile to them,” Bass said in an interview with the Business Journal.
“I get it,” she continued. “My message to the businesses in Los Angeles is that the city is open for business, and we are willing to do what it takes to retain existing businesses and attract new ones.”
In the interview, Bass and her new economic development deputy, Rachel Freeman – a former executive with Tejon Ranch Co. and the Los Angeles County Business Federation – outlined several steps that her administration has already taken to convey that message.
Bass noted that in her first week in office she met with representatives from major business groups, including the Los Angeles Area Chamber of Commerce. In the weeks and months since, Bass said she and her administration have reached out proactively to major companies in the city, asking them what it would take to make sure they remain here and not join the long-running exodus of big corporations from the city.
Freeman added that the Bass administration intends to form two business cabinets – one of which is exclusively for small businesses – that should bring concerns directly to the mayor and help shape policies to attract and retain businesses.
Bass also said she’s taking steps to reduce the wait times for city contractors and vendors to get paid for the goods and services they provide to the city.
Through all this, Bass said she intends to remain laser-focused on addressing the homeless and housing problems.
“Our first focus is obviously on housing-insecure and unhoused people – that’s where the emergency is,” Bass said. “But I recognize the need for workforce housing, too. I spoke recently with a woman who qualified for a $600,000 loan. That would be a mansion in Texas but can’t buy a home here in L.A. That needs to change, and this will be a long-term focus of my administration.”
Local business leaders and business owners are impressed – at least initially – with the outreach and actions from the city’s new mayor.
“I’ve already had several one-on-one meetings with her,” said Maria Salinas, chief executive of the Los Angeles Area Chamber of Commerce. She noted Bass came before the chamber board in early April, less than four months after taking office.
Another local business leader – Stuart Waldman of the Valley Industry and Commerce Association, which is based in Van Nuys – was also impressed with Bass’ initial efforts, but said the real tests lie ahead.
One top priority for Waldman and VICA is the need for Bass and her administration to step in and help soften the blow from progressive measures coming out of the Los Angeles City Council. In early April, for example, several council members introduced a motion to increase the minimum wage to $30 an hour for hospitality workers around Los Angeles International Airport and service workers at the airport.
Combatting the city’s reputation as a costly place to do business will pose a significant challenge.
“The city is beset by the high business licensing costs and remains procedurally bureaucratic,” said Larry Kosmont, founder and chief executive of Manhattan Beach-based economic development consulting firm Kosmont Cos. He co-authors the periodic Cost of Doing Business Survey, which ranks local cities according to the cost burden on businesses; Los Angeles consistently ranks in the top three costliest cities in the county.
Kosmont pointed specifically to the high cost of development.
“Council turnover and new real estate transfer taxes make real estate development and investment excessively risky and costly,” he said. “The mayor needs a strategy for the attraction and retention of private investment.”
There’s also some skepticism among business owners that Bass and her administration will be able to move the needle substantially on the major difficulties faced by businesses in the city.
“No, I don’t think there will be the level of follow-through that we need,” said Don Kipper, owner and president of Kip’s Toyland Inc., based at the Original Farmers Market in Beverly Grove. The vintage toy store has been in that neighborhood since the mid-1940s; today it has a staff of five.
Kipper said he has been impressed with Bass’ ability to bring disputing parties together, such as in the Los Angeles Unified District campus workers strike earlier this year. But he said some of the problems faced by business owners appear to be more intractable, such as the homeless encampments or high taxes and fees on businesses.
Kipper offered a couple of suggestions for the new mayor.
“Why doesn’t the city offer the homeless people who can work some city jobs – maybe maintenance jobs or something similar?” he said.
And for small businesses directly, Kipper said he would like to see the city do more to promote them.
“How about a Small Business Friday or Small Business Saturday for small businesses in the city? Or showcasing certain types of small businesses each month?” he said.
For her part, Bass said there are things that businesses can do to help the city out, especially with the massive homeless crisis.
“Businesspeople can help identify properties that can be used for housing,” she said. “We have a number of commercial buildings that are underutilized, which we can convert to housing or mixed-use.”
On a broader scale, Bass said she is inviting business owners and leaders to join with her administration in helping craft city policies that impact business.
“We want business leaders at the table developing plans alongside us,” she said.
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