For all the challenges of doing business in South Central L.A., hundreds of enterprises have remained faithfully committed to the area.
Some are even moving in.
It’s a business community fueled largely by retail and light manufacturing hardly the high-paid, technology-based sectors coveted by most communities.
Nevertheless, business gets done in South Central and for the most obvious reason: the labor and consumer markets remain huge.
Auto parts retailers, such as Chief Auto Parts, have been particularly ambitious in establishing a larger presence in recent years. Economists point out that while South Central is a low-income area on a per-capita basis, it is densely populated.
“On a per-square-mile basis, there is as much income in South Central as most other parts of the city,” said Tom Larson, professor at Cal State Los Angeles.
The addition of successful retailers helps in two ways: It leads to more hiring and provides more convenient shopping for South Central residents.
Often ignored when tallying the area’s economy are the significant numbers of small to mid-size manufacturers.
Almost in the heart of area is Bond Motors Inc., an engine rebuilder. “If you treat people fair, they will work very hard,” said Paul Sullivan, vice president and chief financial officer. “We have found the inner-city work force to be a prime asset of the area.”
A public company whose shares are traded on Nasdaq, Bonded Motors is adding to its 20,000-square-foot factory.
Finding workers willing to do the hard work of stripping engines down and then rebuilding them has not been hard. “We just sort of put the word out that we need more workers,” said Sullivan. “And they show up.”
Another South Central businessman who is impressed by the local work force is Donald Schenkel, president and owner of Best Box Co. Inc., a cardboard box manufacturer that operates out of a 40,000-square-foot factory near Watts.
“Most of our employees have been here eight to 10 years; one employee has been here 30 years,” Schenkel said. “The employees are one of the attractions of South Central. The more tools you provide them, the better job they do.”
The northwest end of South Central is experiencing a manufacturing boomlet of sorts, thanks to the continued southward expansion of the downtown garment district, said industrial real estate broker Brad Luster, of Major Properties Inc.
As employment in the industry has grown, apparel manufacturing shops are spilling out from the traditional garment district, which historically was to the north of Washington Boulevard and east of downtown Los Angeles.
Now garment-making shops are common along South Main Street, Broadway and other major arteries all the way south to Jefferson Boulevard, said Luster. It is a section of town just northeast of the USC campus.
As with other manufacturers, apparel firms are attracted to the area by the vast supply of labor and low rents, said Luster.
“Rents are running 20 cents (a square foot, per month) to 30 cents,” said Luster, of the area. Rents in the garment district proper, nearer to downtown, are more than 50 cents a square foot.
It was inexpensive rent that attracted Lost City Ironworks to its factory near Slauson Avenue and Avalon Boulevard. The company makes high-end grill work.
“It was cheap rent, pure and simple,” said Mike Spencer, Lost City co-founder, in explaining his move to South Central. “There’s not a whole lot of other reasons to be down here.”
One benefit is being in an area that has designated empowerment zones and enterprise zones. This provides businesses with certain tax advantages and financial incentives for hiring local workers.
Best Box is in an enterprise zone, and owner Schenkel said the incentives allowed him to add four workers to his payroll in recent years. He now employs 12.
Spencer does not find the area dangerous. “I think, if I tried, if I wandered off somewhere, maybe even just three or four hundreds yards from here, maybe I would run into trouble. But I feel no sense of danger,” he said.