With their favorite son knocked out of the mayor's race for the second time in a row, Los Angeles-area business leaders were already gravitating toward Mayor James Hahn last week, despite the stronger electoral showing from City Councilman Antonio Villaraigosa.

Less than 48 hours after squeaking into the runoff ahead of former Assembly Speaker Bob Hertzberg, Hahn picked up the biggest business endorsement: the Los Angeles Area Chamber of Commerce. That came on top of earlier endorsements from the Central City Association, several of the city's leading developers and other prominent business leaders including billionaire philanthropist Eli Broad.

Villaraigosa, meanwhile, is trying to overcome his image as a supporter of labor. No business executives have endorsed Villaraigosa; his contributors include high-tech entrepreneur David Bohnett and shopping center magnate Peter Lowy, among others.

Given his convincing first-place finish in the primary and a general disenchantment with the Hahn administration, Villaraigosa is considered to have a chance to gain significant support in the business community.

"You've got an incumbent who received just 24 percent of the vote. A lot of people may conclude that he just can't win with that kind of percentage and will hedge their bets with contributions to both candidates," said Lisa Specht, a land use attorney with Manatt Phelps & Phillips LLP. Specht resigned her post as a city commissioner last year to join the Hertzberg campaign.

The key, Specht and others say, is whether Hahn can show he's moving up in the polls or can generate some other positive momentum.

Both Hahn and Villaraigosa are expected to make a push for Hertzberg voters, especially business supporters. Hahn won those votes in the runoff four years ago, but this time Villaraigosa has made gains in the Valley, winning two council districts outright.

Some Hertzberg supporters may go along with whomever Hertzberg decides to endorse. Others will use the opportunity to re-evaluate their views.

The same could be true on a smaller scale for supporters of L.A. City Councilman and former Police Chief Bernard Parks, who placed a distant fourth in the primary.

"The natural inclination of business is to support the incumbent," said Larry Kosmont, an economic development consultant. "But a lot of businesspeople won't automatically do that. They felt that the last four years have not produced sterling results for business."

Lack of focus

The choice is made more difficult because neither candidate made economic concerns a top priority in their campaigns.

"Nobody is speaking directly to business interests," said Democratic political consultant Richard Lichtenstein. "We're not seeing a lot of discussion about permit streamlining or tax relief."

Hahn has focused on reducing crime and building more housing, arguing that taking these steps will make the city more amenable to business.

Hahn campaign consultant Kam Kuwata said last week that the mayor will take a message to the business community about how he has helped turn around various parts of the city. "We will tell them what we've done in Hollywood, what we've done downtown through our adaptive reuse policy and say that we can do this for other areas of the city," Kuwata said.

The chamber, which endorsed Hahn four years ago, took the unusual step of endorsing him again in a voice vote without conducting candidate interviews. Chamber board chairman Chris Martin said that Hahn and Villaraigosa were known quantities and thus didn't need to be brought in for separate interviews.

Martin cited several factors in the chamber's decision, including the achievement of business tax reform (although others were the driving force), his successful campaign to defeat secession, moving the Los Angeles International Airport overhaul plan forward, and building more affordable housing units.

He added that the chamber has not yet decided whether to ask its members to contribute to the Hahn campaign, but he did note that several chamber members made contributions to Hahn during the primary.

Villaraigosa has yet to roll out a business and jobs platform. Spokesman Nathan James said this will happen in the coming weeks.

Villaraigosa has talked about his ability to forge compromises between labor and business, particularly in helping to resolve the month-long transit strike that plagued L.A. in the fall of 2003. He has also touted plans to go after biomedical and high-tech jobs.

"There's going to be $3 billion out there to invest in stem cell research," James said. "As mayor, he would make sure that much of that money flows to local universities and medical institutions in Los Angeles, so that we can bring those high tech and biomedical jobs here."

Union complications

Another difficulty for the candidates in going after business is that they are also pursuing union support. Hahn won endorsements from the L.A. County Federation of Labor, the building trades and the majority of city employee unions. Villaraigosa, a union organizer before he entered politics, has an endorsement from the Engineers and Architects Association of city employees.

If either candidate makes promises to union supporters, such as expanding the city's living wage law or requiring union workers for key projects, then that could alienate business voters.

This is especially true for Villaraigosa, who already has many in the business community slightly nervous about what policies he would pursue.

"The key for Villaraigosa is to make sure he doesn't alarm the business community with any of his stances," said Leron Gubler, president of the Hollywood Chamber of Commerce.

Villaraigosa himself has said repeatedly that he has shown he is willing to stand up to unions on certain issues. Most recently, he has pointed to his decision to oppose the compromise plan from Hahn and Councilwoman Cindy Miscikowski to overhaul Los Angeles International Airport, a project strongly supported by the construction and building trades.

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