Zack Zalon has seen the L.A. tech scene rise into political relevance. What began as a bubbling group of savvy, if disconnected, startups has turned into a connective force that is defining the city’s image.
It’s caused Mayor Antonio Villaraigosa to take a close interest in the tech scene during his final term. He invited Zalon, who co-founded Westwood tech incubator Elevator Labs, to be part of a trade mission this month to South America.
Back at home, Zalon and a handful of other executives in the area’s startup scene are using their newfound clout and a direct line to the mayor’s office to give the tech community a political voice. At a presentation Dec. 12 with Villaraigosa at the West L.A. offices of ad tech firm Rubicon Project, they put forth a series of proposals as part of the Los Angeles Mayor’s Council on Innovation and Industry.
Ideas include developing “innovation hubs” on city-owned property along the Expo light-rail line (rebranding it the “Texpo line” with its direct line to tech companies on the Westside) and encouraging pension funds for city employees to invest in the area’s venture capital firms.
Within all the proposals there is a marked strain of boosterism – it’s a promotion of Los Angeles as a force in tech. It’s also a statement to homegrown tech talent that Southern California is a good place to stay and build a startup.
“We graduate more engineers than any city in the U.S., but more than 50 percent of them are leaving here,” said Zalon. “Things like the Texpo line will not only help the community, but strengthen L.A.’s name as an area for startup businesses.”
While numbers vary on the size of L.A.’s tech community, a report by Startup Genome ranked L.A.’s ecosystem third strongest worldwide only behind Silicon Valley and Tel Aviv, Israel.
Part of the council’s efforts to leverage the political arena for the tech industry is needed just to keep up with initiatives by other cities. New York Mayor Michael Bloomberg has thrown the weight of his office into promoting the city’s relatively smaller tech scene – the so-called Silicon Alley. The billionaire with a tech background has fronted a number of initiatives, including city-sponsored computer programming classes and fast-tracking a move by Cornell University to build a massive innovation campus on Roosevelt Island.
Also, London made part of its Summer Olympics promotion into a showcase of its municipal co-working spaces in the tech-heavy east section of the city.
In Los Angeles, big spending isn’t an option while the city suffers through an unrelenting budget crisis. However, as the competition to attract talent grows fierce, using government to spread the word and cultivate the scene might simply become a requirement for an up-and-coming tech city.
“We saw in New York what a mayor can do to change that narrative,” said Todd Gitlin, founder of Beverly Hills tech headhunting firm Safire Partners. “That was the strategy of bringing our mayor on board and using his bully pulpit.”
Of the proposals to come from the mayor’s committee, the Texpo line might be the clearest demonstration of the local government’s help in nudging the tech sector along.
The Expo line’s eventual terminus not far from the Third Street Promenade in Santa Monica gives it a link to the tech epicenter. And with Santa Monica office space getting expensive, the committee is encouraging development of tech-oriented and more affordable office space near the light-rail line.
David Hernand, a committee member and partner at the Santa Monica branch of tech law firm Cooley LLP, has taken a particular interest in the Jefferson Transfer Yard. It’s a 220,000-square-foot city-owned property that’s near the metro stop at La Cienega Boulevard and Jefferson Avenue.
He pictures a four- to five-story privately owned and financed building on the property serving as an “innovation hub.” Some space would be leased by USC and UCLA, and the rest by early stage startups. Hernand’s model is Chicago 1871, a facility in its namesake city run by a non-profit that houses startups, classes and tech mentors.
“The universities here always complain that they’re space constrained and want to teach in a real-world environment,” he said. “This kind of collaboration can teach kids to be innovative and get them clamoring to start businesses.”
Plans for the innovation hub are still early and there is no time line for when the project could take a meaningful step forward. Hernand said he’s already had some meetings with the local universities, which have shown strong interest.
City-led initiatives to house cutting-edge companies aren’t new to Los Angeles. For better or worse, the hub has a similar ring to another hyped city proposal: the Clean-Tech Corridor near downtown Los Angeles.
That project, at a sprawling plot hugging the L.A. River, has been a mixed success for Villaraigosa, who championed it. A large portion of it has been slowed while the city and private developers work to clean the site’s toxic land. However, the clean tech incubator at the center of the initiative is fully occupied at its temporary home, and is set to move into a new building next year that can house even more companies.
Any momentum coming from the committee is tempered by the fact that Villaraigosa has six months left in office. Most of the longer-term proposals from the council wouldn’t begin to take effect during his tenure, leaving the next city leader to take them on.
But in another sign of how the tech community has grown from a niche to a city presence, most of the mayoral candidates have reached out to members of the council.
In particular, Councilman Eric Garcetti has been courting L.A. tech for dollars and votes. Tyler and Cameron Winklevoss, wealthy twins of Facebook fame who are now venture capitalists, last week hosted a fundraiser for Garcetti. The councilman strongly backs the committee’s mission including the plans to develop along the Expo line using city property.
It’s all part of a new era in city politics, where tech has risen to power and the game now is keeping the local scene ahead of the pack.
“Bloomberg taught us the power of narrative, and that’s been a tent pole in creating his city’s image for tech,” Garcetti said. “I would ramp up the council here even further. I don’t want them to just be an industry think group that reports to the mayor, but really be able to control the city’s brand.”
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