Austin Beutner has a job description that is daunting: make Los Angeles the most business-friendly city possible while adding jobs to the local economy.
No small task during a severe recession and in a city notorious for its red tape and standoffish attitude to the private sector.
But in choosing an investment banker with solid Wall Street credentials but no local government experience to be his first “jobs czar,” Mayor Antonio Villaraigosa bet last week that it’s an outsider who can best shake things up at City Hall.
As might be expected from a businessman who until just a few weeks ago hadn’t even considered such a position, Beutner so far has few specific prescriptions to fix what’s wrong with the city – be it tax cuts, regulatory reform or any number of other initiatives.
But the 49-year-old L.A. resident comes across as energetic, optimistic and in grasp of a set of principles that will guide his actions.
“We serve business and that’s what people inside City Hall need to understand,” Beutner told the Business Journal during an interview last week at his City Hall office, still with bare white walls. “They’re our customers, and we need to improve our customer service. We need to push along better communication.”
Better communication probably wouldn’t be a bad start for many business people – about three-quarters of whom feel unappreciated, neglected and even harassed by city bureaucrats, according to a November survey by the Los Angeles County Business Federation, a business advocacy group, also known as BizFed.
But it’s going to take a lot more than better communication.
The city’s unemployment rate is at a whopping 13.4 percent, and it’s been hit with high-profile economic setbacks – including the recent announcement that Northrop Grumman Corp. would be moving its headquarters from Century City to the Washington, D.C., area.
There’s also been the constant wrangling at the Port of Los Angeles, where the city and trucking industry are in a battle over a ban on independent owner-operator drivers that is seen as a union-backed measure to open the door to the Teamsters.
“He’ll only be successful if he gets everyone to cooperate with his vision,” said David Fleming, an attorney at Latham & Watkins and founder of BizFed, who does not know Beutner. “He has to not only win over businesses, but also the policymakers within City Hall, of which he is now a part of, and that could be just as tough, if not worse.”
Beutner’s title is a mouthful and somewhat bureaucratic sounding: first deputy mayor and chief executive for economic and business policy, and as such he will report directly to Villaraigosa and oversee 13 departments, including Planning, Building and Safety, the Convention Center, the Water and Power, Los Angeles World Airports and the port.
But Villaraigosa said Beutner’s job will not be running departments. Rather, he’ll focus on economic development and job creation using all the city’s available tools. Independently wealthy, Beutner is taking an annual salary of just $1.
“Austin will be charged with creating new markets for emerging industries such as high tech, bio tech, and clean technology, and focus on encouraging local preference for Los Angeles businesses to ensure that city’s tax dollars are being spent right here,” Villaraigosa said in a statement. “He has a real vision, but more importantly, he has the know-how and wherewithal to make this vision a reality.”
A New York native who grew up in Grand Rapids, Mich., and graduated from Dartmouth College, Beutner began his Wall Street career in 1982 working for Smith Barney’s mergers and acquisitions group. In 1989, at 29, he became the youngest partner at private equity giant Blackstone Group, advising companies such as Sony and PepsiCo.
He later went on to co-found New York boutique investment banking firm Evercore Partners with former Deputy Treasury Secretary Roger Altman, but has lived the last 10 years in Los Angeles, where the firm has an office.
He does have some public sector experience. Prior to founding Evercore, Beutner worked for President Clinton’s State Department in Russia from 1994 to 1996, overseeing the development of mortgage and business-lending vehicles, as well as privatization strategies. He also created and ran a fund that helped find financing for small businesses. He credits this chapter of his life as prime training for the L.A. jobs chief.
“There was no market economy to work off of in Russia then, and we were all building that up again from the ground up,” he recalled. “I learned that if you could figure that out and make it work, that you also could make a difference in a big city like Los Angeles. It’s not going to be easy but it is possible. I truly believe that.”
In 2007, Beutner broke his neck and nearly died in a mountain biking accident, causing him to re-examine his life and retire from Evercore. After recovering last year, he was in talks to take a job at the U.S. Treasury Department but didn’t want to leave Los Angeles.
Then along came the jobs czar position, which Villaraigosa reportedly first considered giving to former mayor and venture capitalist Richard Riordan, whose eight-year administration that ended in 2001 was famously friendly to business.
Beutner, who didn’t expect to be offered the job, said the post is a way of giving back to the adopted city he loves – a city he wants to leave in better shape for the four children, ages 6 to 13, he is raising with his wife, Virginia.
“I think everyone ought to examine their lives every few years and see if what they are doing is making an impact,” Beutner said. “For me, this is that job.”
Beutner will need that optimism as he takes on the task of creating jobs in a climate in which many businesses are still laying off workers or at best holding steady. An estimated 150,000 jobs have been lost in the last two years in Los Angeles County.
Beutner said there are some very practical efforts that can be undertaken, such as ensuring that the city uses its purchasing power wisely.
“I wouldn’t want to see the solar panels we use come from Malaysia when we have companies here that could produce it,” he said.
He also said he’s not afraid to get his feet wet at the Port of Los Angeles, where that Villaraigosa-backed initiative requires truckers to be employees of carriers rather than self-employed.
That requirement, part of the port’s billion-dollar clean air plan that has junked thousands of dirty old diesel trucks, has rankled trucking companies and others. The fear is that it will lead to a Teamsters’ organizing drive and higher costs. It’s also led to the closure of perhaps hundreds of small trucking firms that relied on the independent truckers.
Beutner did not directly address the issue but did say he wanted to have better communications with the harbor businesses.
“We want to make sure the shippers and businesses using the port are happy,” he said. “We know Houston and the Panama Canal are serious threats, and we need to continue to invest in the infrastructure and customer service to keep them here.”
He also stressed that he would not micromanage the port, or the DWP or other agencies under his jurisdiction, but rather serve as a visionary, pushing department heads to make business-friendly decisions that will lead to job creation and retention.
“We’d like to attract businesses here and partner with businesses using our leverage with city agencies like the port, airports and DWP,” he said.
Samuel Garrison, vice president of public policy for the Los Angeles Area Chamber of Commerce, said the chamber would like to see Beutner first reach out to business to get feedback on how to create and retain jobs, and cut red tape.
Garrison referred to one idea: the 12-to-two initiative, which would allow developers to only deal with two city departments – Planning, and Building and Safety – instead of the 12 they normally have to visit to get projects approved.
The idea has been touted by Villaraigosa for years, but the mayor acknowledged in a news report last week that the initiative has lost steam.
“There are plenty of reports already written up about how to make Los Angeles more business-friendly, the time is now to take those recommendations and really prioritize them to move them forward,” Garrison said. “And I think the primary focus needs to be on businesses that have already invested in Los Angeles, to see if they are satisfied so we don’t lose any more.”
Then there’s the stunning loss of Northrop Grumman. It was the last major aerospace company headquartered in Los Angeles, though Northrop said it has no plans to shut down local plants employing some 30,000 workers.
Business development groups, such as the Los Angeles County Economic Development Corp., were blindsided by the move –though that seems surprising given Northrop was only the latest of a series of Fortune 500 companies to leave the city.
“We’re going to have to learn from the mistakes of losing Northrop Grumman and see how if in any way we could have dissuaded them from leaving,” Beutner said. “Los Angeles has a lot going for it when it comes to business opportunities. We have one of the largest airports in the world, the largest collection of creative industries, the largest port complex and talented experts in every discipline. We can’t just throw in the towel now because of these problems.”
For reprint and licensing requests for this article, CLICK HERE.