Great cities have one thing in common – the presence of ambitious and civic-minded business leaders who collectively shape an economic development strategy. That is what helps drive economic and income growth and the creation of jobs. Up until now, Los Angeles has been able to achieve its position as a world-class city without a clear economic development structure or long-term strategy in place. But a slow-moving economic recovery and 48 straight months of an 11 percent or greater unemployment rate demand action.
The Los Angeles City Council and Mayor Antonio Villaraigosa last year endorsed the concept of establishing a new model for organizing and delivering “economic development services” in the city. This action was a successful first step in advancing a concept that has eluded the city’s policymakers for the past 20 years. But the reality is a comprehensive blueprint is needed to make it real. Last month, a report commissioned by the city’s chief administrative officer and chief legislative analyst – titled “Economic Development in Los Angeles: A New Approach for a World Class City” – did just that. This report specifically highlights a set of recommendations that have proved to generate economic and jobs growth in other major cities throughout the United States, namely New York, Chicago, San Diego and San Francisco.
Its timing could not have been better. With the upcoming election of a new mayor and a large block of City Council members this spring, it is time that we stop reinventing the city’s business plan every few years and reform the city’s governance structure as it relates to economic development. Currently, the city’s economic development resources, responsibilities and incentives remain unaligned with no clear vision or lines of authority. This disconnect forces public policymakers into implementing a series of disjointed and unsustainable policies, including gross receipts tax reductions for only a handful of industries and a business tax holiday that benefits new businesses but not established ones. Though well-intentioned, these policies lack measurable results. As most business leaders know, you can’t manage what you can’t measure.
Additionally, L.A.’s bureaucracy is not conducive to the establishment of strategic public-private partnerships that leverage the city’s public financial and real estate assets with private investment. The time is now for a new model that fits the larger metropolitan mind-set other cities have embraced to better compete in a rapidly changing global economy.
The mayor and City Council should implement the following report recommendations:
• Appoint a Deputy Mayor for Economic Development: Three years ago, Villaraigosa set the bar high with the appointment of Austin Beutner, a seasoned private investor, to lead a citywide effort to bring together the city’s multiple economic development-related agencies, departments and commissions to work more strategically. Formalizing a new governance structure and strategy will create a single point with a more enhanced role, larger portfolio and increased authority. This streamlined approach will begin to bridge key economic development efforts among our city’s top assets, such as the Los Angeles International Airport, the Port of Los Angeles, Los Angeles Convention Center, etc., which create millions of jobs throughout the region.
• Advance the Discussion of the Establishment of a Public-Private Partnership Between a New Economic Development Department and a New Citywide Economic Development Non-Profit: Los Angeles – the nation’s second largest city – needs an economic development model that matches its standing as a world-class city. City leaders should consolidate the city’s numerous economic development programs into one primary focal point to better provide entrepreneurs and the business community a one-stop center with financial incentives and guidance. Secondly, business and public policy leaders should work with other economic development-related organizations, such as the Los Angeles Economic Development Corp. and the Los Angeles Area Chamber of Commerce, to lead an effort that builds upon the great work already being done throughout the region. This effort could possibly establish a new citywide economic development non-profit. This new organization should house private-sector experts contracted by the city to provide expert strategic analysis, negotiation and management skills to help the city manage its long-term economic development strategy and real estate assets.
The economic opportunities are abundant. The city owns numerous underutilized and noncore mission real estate holdings (land and office buildings) across the city. As our political and public policy leaders continue to struggle to sustain citywide funding levels for critical municipal services, such as public safety, education and infrastructure, they must not lose sight of embracing innovative ideas that will generate the necessary economic and jobs growth to pay for them.
The sound recommendations within this report have the opportunity to establish a more competent government, help re-engage the business community and most importantly positively transform our economy. With today’s challenges, all Angelenos should be demanding a higher level of urgency and engagement – and in particular – actively pushing for real solutions that will drive more investment and produce a better quality of life for all of us.
John C. Cushman III is co-chairman of Cushman & Wakefield and a member of the Los Angeles Coalition for the Economy & Jobs. Michael H. Kelly is executive director of the coalition.
