Real cost of doing business
As the chief administrative officer for the City of Culver City, I would like to respond to the Feb. 10 article, “Why L.A. turns off businesses.”
Although Culver City was not the focus of the article, it was ranked fairly close to L.A. in the annual Kosmont Cost of Doing Business Survey.
The survey defines the cost of doing business as an average of the cost of business license fees, utility taxes and property taxes. This narrow definition fails to take into account crime rate, insurance rates and other specific (financial assistance) programs and amenities offered by cities and in this specific case, Culver City. Here are some fast facts:
– Culver City’s Fire Department is rated Class I, reducing insurance rates by an average of 10 percent. This fact can and should be calculated into the business cost survey.
– The crime rate in Culver City has dropped by 14 percent this year and 58 percent since 1980. This statistic includes violent crimes and property crimes which certainly affect the cost of doing business.
– Culver City offers tax rebate programs that offer new businesses the opportunity to get up to 50 percent of their business tax returned to them for the first two years of operation in the City and other incentive programs in the City’s three redevelopment areas.
– Culver City’s location is excellent in relation to local, national and international markets, reducing transportation costs.
Culver City and other more mature cities in the L.A. metropolitan area are actually aware that communities located on the fringe of Los Angeles County are offering very competitive deals in terms of having no utility tax and low planning fees.
However, it is important to remember that the communities offering low-tax or no-tax opportunities are also offering fewer services in many cases and are not as strategically located to L.A.’s busiest freeways and Los Angeles International Airport.
Further, newer cities will eventually be built out and the increased service demand will outweigh resources and local governments will find themselves in the difficult position of needing to raise fees to provide necessary and desirable services.
Safety and service are also important reasons to choose a location and can translate into a reduced cost of doing business and a better quality of life. Culver City is proud of what it has to offer to business and believes that lowering business taxes to attract business to a city that would be incapable of offering the best level of service is not a worthy option.
Chief Administrative Officer