Larry Kosmont is the economic development consultant-turned-guru with his annual “Cost of Doing Business” survey that compares the tax rates and fees of cities in California and around the nation. Originally designed as a guide for his private sector clients, the survey has become the chief measuring stick for cities in terms of business-friendliness. Getting ranked as a high-cost city – as Los Angeles has year after year – is a black mark that can prompt cities to revisit their tax policies. Kosmont, 58, has come a long way from his roots as a Jewish boy growing up in Spanish Harlem. Later on, he used the street smarts he learned in Harlem when working in rough areas during his career in city government, which included stints in Santa Monica, Seal Beach, Bell Gardens and Burbank. Later, he made the jump to the private sector, launching his economic development consulting company in 1986. Today, he’s continuing his consulting career while enjoying life as a new dad. Kosmont met with the Business Journal in his office overlooking the Staples Center and discussed his memories of life in Spanish Harlem, his challenges in city government and his work as an economic development guru.
Question: You grew up as a small Jewish boy in a tough New York neighborhood. What was that like?
Answer: Yes, I was a Latin Jew in Spanish Harlem. My father was a Belgian Jew who fled the Nazis and my mother was from Venezuela. Growing up in Spanish Harlem, there were some tough hombres and you learned to make big friends.
What did you do when you ran into these tough hombres?
Going to grade school, I used to get jumped for my lunch money. So I took to carrying my money in nickels so I could pass them out. Often, I never had any money left when I reached school. I learned how to talk my way through things and to rely on my big friends to stick up for me. Another good thing about this: It gave me the sense of not being afraid. When talking didn’t work, I learned how to fight back at an early age.
Did this continue through your high school years?
No. We moved out to Long Island, which at that time was very suburban.
What did your father do?
He was in the schmatta business: He owned a clothing store. And my mother was a homemaker: She raised me and my brother.
Why didn’t you follow your father’s footsteps into apparel?
I got a good education in New York public schools. Having grown up as a young kid in Spanish Harlem, I found that I was interested in the economics of urban America and took some classes. That’s how I decided to become a political science major in college and then pursue a master’s in public administration.
Why did you leave New York and come to Los Angeles?
I originally came out to go to law school at UC San Diego, but decided that being a lawyer just wasn’t my calling. I wanted to go into government. I looked around for a good program in public administration and that’s how I came to USC.
What were some of your most memorable experiences in city government?
I think my most memorable experience was working for Dennis Courtemarche, the city manager of Seal Beach. He had a real entrepreneurial spirit about him and that’s where I really learned the art of putting together redevelopment deals. He put me in charge of a trailer park redevelopment project. I was just 24 at the time. That trailer park had become a real black eye for the city: people living in squalor in completely dilapidated trailers.
So what did you do?
Being only 24 years old, I asked Dennis if I could go down there and see what I could do about relocating the tenants of that park. So I put on a pair of shorts and moved into one of the old trailers in the park. I didn’t give up my apartment, but I spent almost all my time in the trailer. I really became one of them. I learned all about relocation at the grass roots. People wouldn’t talk to me when I first moved in, but after a while, I became part of their subculture. I was able to convince more than 100 residents of that trailer park to move into a brand-new mobile-home park that we had built next door.
What was it like living in a trailer home?
Mostly it was sad, very sad. It’s a forgotten lot of people – a mix of young and old who are primarily disenfranchised for one reason or another. Many had life styles dominated by alcohol or drugs. They were generally very mistrusting of authority.
So how did you convince them to move?
I kind of knew that I had made some progress when one of the guys in the trailer park came up to me and asked me if I wanted to smoke a joint with them. I said, “No, I’ll pass. But can I talk to you about relocation?”
He was very low-key about the whole thing. But I was persistent, and he saw me hanging out and not being judgmental of his life style, even if I didn’t participate fully. So, eventually, he and several others in the trailer park began to trust me.
You got your first city manager position at 27. How did that happen?
I had racked up some good experience in Seal Beach. I interviewed at the city of Bell Gardens and was very surprised when I got the job. As I soon found out, that may have been because few others wanted the job. There I was, the city manager of a city that the Rand Institute had ranked as one of the five worst places to live in all of California. But for a kid from Spanish Harlem, it was fine for me.
What was your most significant accomplishment in Bell Gardens?
Negotiating the development deal for the Bicycle Club Casino. Half of the city’s general fund now comes from that casino.
Isn’t that the casino that was taken over by the feds amid alleged corruption? Do you really consider that a success?
Well, of course, gaming always comes at a price because some of the leadership is not as forthright as they appear to be. And there were several leadership changes and investigations. But right now, it’s run very well. And I know that I wasn’t on the take in any way in getting that deal approved. In fact, it was the council that decided to move in the direction of a casino and then ordered me to make the best deal that the city could get. I had actually tried to get a shopping center deal through, but the council decided on the casino route.
Bell Gardens is right next to Bell, in the news because of the outrageous salary paid the former city manager. What do you think of that story?
Actually, when I first heard about this, I had a real sense of disgust. It’s a real black eye for the whole city manager profession. Something like that only happens when democracy isn’t really representative and the city government goes sideways. Neither I nor any of my city manager colleagues ever had anything approaching that salary level, even adjusted for inflation. And the pension, too. My God.
What’s the key to being a good city manager?
You have to see each city as it really is. So that meant I had to go to the gathering places and meet people in their daily lives. Another way to do this – the best way I feel – is to ride around in police cars. I called those my “needs assessment missions,” because that’s where you see all aspects of a city. And, of course, there are the usual things you do to meet the movers and shakers in each community: chamber meetings and the like. After a while, I got a real system going to digest a community.
So was that your social life?
In a way, yes. Going to all these events, I made great friendships. And, when I was single, it was a good way to meet people. I met my first wife in Seal Beach and my second wife in Burbank.
You’re now on your third marriage. What happened with the first two?
Well, my first marriage, we were both too young to know what marriage was really all about. The second one, we hit it off very well at first, but we found that we really weren’t compatible, and that marriage also ended quickly. After that marriage broke up, I stayed single for a long time. Then, five years ago, I met Loren, who became my third wife. Like they say in the Goldilocks tale, she is just right.
How did you meet her?
I met Loren Gonzales at a Central City Association luncheon. I was on a panel presenting my “Cost of Doing Business” survey findings. She asked a question and we got to talking. Afterwards, I called her up and we went out on a date. We found we had a lot of the same interests and values. We both own our own companies: She has a public relations and marketing firm. Now that she’s pregnant, she’s not taking on new clients. But after the baby arrives, she’ll go back to running her company full time.
Why did you decide to leave city government and become an economic development consultant?
I felt that it would be more rewarding to work toward economic development from the outside. Plus, I was 34 at the time. I had promised myself that by the time I reached 35, I would make a decision about whether to stay in the public sector and become a lifetime public servant or to jump to the private sector. I decided to use my skills in economic development and work with private developers to get their projects through. I pulled out some of my retirement funds and started this business.
What was different?
In the public sector, I had a safety net – a steady salary, retirement packages and the like. With my own company, I had to rely completely on my own self-confidence and skills – and pray for some good luck. I got a big break in that John Cushman became one of my first clients and I soon got Costco as a client. I also benefited from good timing: I started my business just as the real estate boom of the late 1980s kicked into high gear.
What did you do when the real estate market collapsed in the 1990s?
I sought out public sector work. I consulted for the Metropolitan Water District with its new headquarters project.
How did you start the “Cost of Doing Business” survey?
It really was something that came to me one morning while I was in the shower. I kept getting questions from my private company clients: Where should they do business? I realized I had no objective data about the fees, taxes and other costs of doing business in various cities. So, I put myself and my staff to work collecting all this data on 75 cities in Southern California. We released our first survey in 1994. If I had known when I started what it would take, I probably would never have gone through with it.
So what can you tell cities about doing a better job of economic development?
No question, economic development is tough. And it’s tough because whenever a project comes before a city council, there are three choices: yes, no or defer, and defer is the easy way out for cities. But if a city wants to be successful in economic development, city leaders have to bite the bullet and make a decision. And that decision doesn’t always have to be yes. If a project is wrong for a city, then the city should come to that conclusion quickly.
How did you balance running your own business and putting out these surveys with your personal life?
It was always hard. I’ve always been a real hard worker. But then I met Loren and realized that she was somebody I wanted to settle down and have a family with. Today, I’m fighting the pressures of my work with the pressure of having to raise a young family.
You mentioned that you like bicycling. What have been some of your favorite bicycling trips?
I live in Manhattan Beach, so I really enjoy cycling down to Rancho Palos Verdes or up to Malibu. The first time I went north into Malibu, I realized how much I love the California coast. It’s the greatest thing for a kid who grew up in Spanish Harlem to be riding a bicycle along the Pacific Ocean for miles and miles. That’s when I knew I would be bicycling for a long time.
So that’s your favorite hobby?
Well it was. But my favorite thing to do now is to hang out with my two-and-a-half year-old and watch him learn the world. It’s really fun.
What’s the best piece of advice you’ve received?
This is from a city attorney regarding a junket: “If you’re thinking about it, don’t do it. If you think you might read about it in a newspaper, don’t do it. Live clean.”
TITLE: Chief Executive
COMPANY: Kosmont Cos.
BORN: New York; 1951
EDUCATION: B.A., political science, State University of New York, Binghamton; master’s degree in public administration, USC
CAREER TURNING POINTS: Getting intern position in City Manager’s Office in Santa Monica; becoming city manager in Bell Gardens; starting economic development consulting company.
MOST INFLUENTIAL PEOPLE: Jim Williams, former Santa Monica city manager; Dennis Courtemarche, former Seal Beach city manager.
PERSONAL: Lives in Manhattan Beach with wife Loren; couple has one boy, age 2, and is expecting another child. No children from two previous marriages.
ACTIVITIES: Bicycling and “watching my 2-year-old learn all about the world.”
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