Sometimes history doesn’t announce itself with a trumpet. Sometimes it whispers through a television interview lasting less than a minute.
Most people hear it and move on. They shouldn’t.
The other day I happened to catch an interview with Rick Rosenfield, the co-founder of California Pizza Kitchen, one of Los Angeles’ most recognizable entrepreneurial success stories. His comment was short, direct and devastating. Asked where he would launch the company today, Rosenfield didn’t hesitate.
Not Beverly Hills, California, where he formed the restaurant in 1985 – but Florida.
Read that sentence again.
The man, one of your neighbors from Los Angeles who helped create California Pizza Kitchen – the very brand that exported the California lifestyle around the world – said he would not choose California if he were starting today.
Symbols matter.
It would be easy to dismiss Rosenfield’s observation as merely one successful entrepreneur venting frustration. That would be comforting. It would also be profoundly mistaken.
Entrepreneurs are economic canaries in the coal mine. Long before politicians acknowledge a problem, business builders quietly begin making different decisions. They invest elsewhere. They hire elsewhere. They expand elsewhere. Eventually, they move elsewhere. (In fact, California Pizza Kitchen eventually relocated out of L.A., to Costa Mesa.) Only later does everyone else notice.
Los Angeles once represented possibility. It was where dreamers became builders and builders became employers. It was the state that attracted ambition rather than regulating it into submission. Today, far too many entrepreneurs see something different.
They see mounting regulations. They see rising taxes. They see permitting processes stretching from months into years. They see litigation risks around every corner. They see labor costs climbing faster than productivity.
Most importantly, they see governments that too often appear to view business not as a partner in prosperity but as a suspect requiring constant supervision.
None of this means Los Angeles lacks extraordinary advantages. It remains blessed with world-class universities, creative talent, technological leadership, extraordinary weather and breathtaking natural beauty. Those assets are real.
But assets alone cannot compensate forever for policies that make entrepreneurship increasingly exhausting.
Florida has become the beneficiary of this migration – not simply because of sunshine. California has plenty of that. Businesses relocate because they believe they will encounter fewer obstacles and greater predictability.
Whether every perception is perfectly accurate is almost beside the point.
One becomes more
In economics, perception often becomes reality. Investment follows confidence. Confidence follows policy. The consequences ripple outward.
When entrepreneurs hesitate, restaurants don’t open. When restaurants don’t open, suppliers lose customers. Construction workers lose projects. Young employees lose first jobs. Communities lose gathering places. The city loses tax revenue.
The damage extends far beyond a single business owner.
Too often, L.A. political leadership responds by insisting that criticism is exaggerated or politically motivated. That response misses the point entirely. The marketplace does not vote according to ideology. It votes according to incentives. Today, capital has no permanent address. Neither does talent.
When enough successful people independently conclude that another state offers a more welcoming environment, dismissing their concerns as anecdotal becomes increasingly implausible.
One entrepreneur can be ignored. One thousand cannot.
Rosenfield’s comment should have produced immediate reflection in L.A. City Hall, but alas, it won’t. Instead, I suspect it will largely disappear beneath tomorrow’s headlines. That, of course, is more unfortunate. It’s tragic.
Great civilizations rarely decline because of one catastrophic blow. More often, they become incapable of recognizing the meaning of countless small warnings. They normalize what once would have been unthinkable.
Factories close. Families leave. Businesses relocate. Employers stop expanding. Each event is explained away as isolated. Until suddenly it isn’t.
Los Angeles still possesses every ingredient necessary for renewal. Its people remain among the most innovative on Earth. Its universities continue producing remarkable talent. Its cultural influence remains unmatched. Its entrepreneurial DNA has not disappeared, though it is badly dispirited and fading.
But DNA alone does not guarantee survival.
Culture must be reinforced by policy. Opportunity must be protected by leadership. Success must be welcomed rather than burdened.
The tragedy is that none of this is inevitable.
L.A.’s massive decline in business competitiveness is not an act of nature. It is not an earthquake or a drought beyond human control. It is the cumulative consequence of thousands of policy choices made over many years.
Policy created the problem. Policy can solve it.
Rick Rosenfield offered more than an opinion about where he would build a pizza restaurant. He offered a diagnosis.
The question is whether Los Angeles’ leaders possess the humility to hear it. Currently, I wouldn’t bet the ranch.
History rarely sends engraved invitations before change arrives. More often, it leaves clues in ordinary conversations, passing interviews, and quiet decisions made by people who create jobs rather than speeches.
Sometimes those clues arrive in the form of a pizza.
Michael Levine is a veteran Los Angeles public relations executive who has represented Academy Award and Grammy Award winners. He has written many books including “Broken Windows, Broken Business.”
