To Preserve (or Not)-City of L.A.'s Industrial Land Use Policy

The Planning Department and the L.A. City Community Redevelopment Agency (CRA/LA) have issued a joint directive regarding industrial land use and the potential conversion of existing industrial land to residential and other uses. Gail, what is the importance of this report?

Gail Goldberg: It's important to note that Cecilia and I received this assignment two years ago-to look at current policy on industrial land to better understand the conversions that were happening and to look more carefully at the preservation of industrial land. After a two-year study, we have concluded that, when looking at some of the major industrial areas in the city-in Hollywood, West L.A., South L.A., and the extended central city area-about 20 percent of the land that we looked at is already so compromised as to no longer be viable for industrial land.

Cecilia and I started with the assumption that the city's policy for the preservation for industrial land-that means to preserve viable industrial land-is strongly stated in many places in our general plan. We looked carefully at the industrial land and determined that there is a portion of the industrial land that is so compromised as to make it no longer viable. In those cases, we are directing our staff to consider proposals to convert land in those areas to some other use. We won't necessarily approve it, but we will consider it.

We also found that there are some areas of industrial uses where an influx of other uses could be supportive and could, perhaps, enhance the industrial uses that are there. Those are typically a lighter industrial use that might benefit from a mix of uses. We identified those areas.

We also found a few areas where we believe that the zoning of these industrial areas a number of years ago was a mistake. A number of years ago, in South L.A. particularly, we went into some residential areas, rezoned them as an industrial area, and over the years, the only thing that has happened is a few industrial uses have gone into residential areas and created conflict. We're saying that those areas should revert back to residential.

But we believe that 80 percent of the area has strong, viable industrial uses, and our directive to staff is that we should protect those industrial uses. This is to give staff a better way of dealing with proposals that are subject to the current land use plan and the current industrial land use policy.

Cecilia, what was the Community Redevelopment Agency's role in this process? Why did the CRA/LA partner with the Planning Department to develop this plan for dealing with proposals to convert industrial land?

Cecilia Estolano: We're involved because, in many cases, the city's industrial land is located within redevelopment project areas. Most of the viable and vibrant industrial land is in redevelopment project areas. Our mission is very broad, but simply stated, it's to create economic opportunities for people who are currently living in our project areas and for future generations. We are involved because we also have planning authority, and in the past, our two agencies had not always been on the same page on how to approach basic land use and zoning issues. In this case, we were asked to work together. Our staff has shown that we not only rose to the occasion, we exceeded people's expectations in our ability to jointly develop the facts in the analysis and come up with a clear directive to staff on how to proceed in these instances.

Our interest here is to make sure that we're on the same page as the Planning Department-that when you come to the city of Los Angeles and the Redevelopment Agency and you apply to change your zoning and your plan designation, that you're going to get the same answer wherever you go. That's a first.

Second, when we analyze these industrial lands, we look at them with an eye towards future investment and economic development strategy. That's another first for the city. So it's not just enough to say that this land is viable, that it's good, it's vibrant, and it currently has jobs. We also have to look at how we invest and reinvest in industrial land and the infrastructure in these areas so that we not only preserve existing jobs but also move them up to a higher level-create jobs that are a gateway to the middle class.

Industrial versus service jobs is a big difference. It's the difference between poverty-level wages, about $29,000 a year for retail jobs, versus $47,000 a year for the average manufacturing job. That's the difference between being eligible for very low-income housing and being part of the middle class of the city. So it would be unacceptable for the Redevelopment Agency, which is the economic development agency for the city, to allow 19,000 acres-8 percent of the city, which contains the middle class jobs of the city-to be converted without considering the economic impact on our constituents.

Cecilia, we haven't had a serious discussion about strategies for economic development in the city since the civil unrest and Linda Griego's report in the early 1990s. Why hasn't this been a more prominent topic of discussion in a city that hasn't generated net new jobs in more than a decade?

CE: In the last 25 years, we've added about a million new residents, but we've actually lost 57,000 jobs. That's a shocking statistic. I think the reason why it hasn't been on the front burner for the city is because the city has really been built on real estate speculation. We were also very successful; we had such a successful defense industry, we had manufacturing centers in the ‘60s and ‘70s. We were able to absorb a lot of hits, but then, when we had the downturn in the ‘90s, we suddenly did need to focus on a real industrial economic development policy.

We're very fortunate that in the city we now have leadership in the mayor's office to take a serious look at the future, not just in his term, but in the city two or three generations out. There have been a number of studies produced by various city agencies that have identified certain growth sectors, for example, biomedical, green industry, health care, entertainment, logistics, and transportation. These are five sectors where we already have a competitive advantage relative to other regions, where, if we can invest, we will see our workers and our population gain the ability to move into middle class jobs in growth sectors.

Some of these studies were conducted under the previous mayor. Now we've looked at them, dusted them off, and asked, how do we operationalize these studies? How do we take the next step of investing in the land, the businesses, and the sectors that will create the middle class jobs that will rebuild the city?

So that's where we are now, and I think this is just the first step. You can't have middle class manufacturing jobs without a place in which to locate. Once those industrially zoned lands go away, they're gone forever. That's why we are so committed to giving our staff a clear direction in these issues.

I think it's fair to say that most of the public of Los Angeles has little confidence that you can operationalize public policy into land use strategy. It has always been the perception that it's a case-by-case process subject to the political will and discretion of elected officials. You're now trying to implement a citywide policy, giving predictability to the marketplace. What's the challenge?

GG: I think the challenge is that we're starting off from a place where we do not have in place good community plans or strong plans that can really guide development.

While it's not a happy event to have project-by-project policy development-and in some ways I think the Planning Department has to take some responsibility that we have not provided the kind of direction through our planning process-we are now in a place where we are working on 12 community plans that are going to be much more comprehensive, and we will have, for the first time, plans in place that can direct development, provide the design guidelines and the infrastructure provision, and will allow more predictability. But the reality is that the policymakers have to buy into that planning process and be a part of that planning process.

Elaborate on the value of predictability in the land use marketplace.

GG: For me, it's a huge issue in the city of Los Angeles because I believe that it's difficult in this city to do either what the city wants to do or what the city doesn't want to do, because you don't have good direction. The result of that is that we have created a closed system, where only the most sophisticated developers, or projects that are fairly high-end, can operate in our system.

We have to have a predictable process so that smaller developments, smaller projects, and market-rate projects can afford the risk of our process. That is a huge leap in the city of Los Angeles, and that is exactly what the Planning Department is intending to create through our new community planning process.

CE: There's certainly the land use predictability, but there's also an investment predictability component. If you are a property owner, an owner-operator, or a manufacturing facility that's zoned industrial and you see that speculators are able to come in and quickly flip the land, get them entitled, and turn them into high-end residential, you would be less inclined to continue to invest in that business and the surrounding community, thinking that you are going to be forced out of the market anyway.

What we need to do is say to the marketplace-and really mean it-that these are precious job zones, and we're going to protect them. We're going to cordon them off as viable, precious job zones. Moreover, we, the city family, will invest in your area. We, the CRA/LA, will work with our city partners and the Bureau of Street Services to pave the streets more than once every 40 years; we'll work on upgrading your sewer; we'll work on upgrading your storm drains. We'll make the investment necessary to keep you in the city and to help you expand.

The greatest impediment to job growth for manufacturers in the city is lack of available land. And in the case of industrial zone land, our vacancy rate in the Downtown area is less than 1 percent. Citywide, it's less than 2 percent. A healthy vacancy rate hovers somewhere between four and six percent. Los Angeles has the scarcest industrial land in the country. So, if we want folks to invest in job zones and create good, middle class manufacturing jobs-which currently exist in the city and we want to have them grow-we have to give them predictability. We have to protect these manufacturers.

Which metropolitan areas are doing a good job at preserving industrial land?

CE: Chicago and New York. It's unsurprising, because in Chicago and New York, you have strong leaders who understand the value of long-term economic development and planning. They've arrived with a variety of strategies to protect their employment land. In fact, our report has an appendix that surveys a number of cities and their efforts, including Portland, Chicago, New York, and others. We also included Vancouver. There are various strategies.

We're certainly not the leader. In this case, we're following, but it doesn't mean that we can't catch up. In order for Los Angeles to become a leader in some of these sectors where we can build on our natural synergies-green industries, bio-med, logistics and transportation-we have to plan and mean it, and we have to invest.

What cities have failed or provide examples of what not to do?

GG: I think San Francisco is a good example of a city that, over time, lost the middle class jobs and now has created a place where only affluent folks can live. It's a city that doesn't have the same ratio of children in their population as our city does because it's not a city where families can afford to live.

Even San Diego, the city that I came from, had a similar discussion the year before I left. San Diego made the decision not to convert any of their industrial land despite the pressure that the residential markets had placed on that land. That was a strategic decision. San Diego also had a strong economic prosperity strategy. They had a strategy for attracting jobs where they had a competitive advantage. Those are really important components of economic prosperity, and it's an important element in terms of land use planning.

Let's turn to the report itself. What are the elements of this report? What direction are you trying to give your agencies and staff?

GG: There are two areas that we are talking about in this report. One recognizes that the city has a strong policy to preserve industrial land. We are telling our staff how to operate in this current environment, with these current policies, and with our existing land use plans. That goes back to the categories that I talked about before. We had said to them: there are preservation areas, there are areas that we believe are transitioning, there are areas where we've made mistakes and need to correct them, and there are areas where we could promote some mix of uses.

It's also important to note that there is a long-range component of this that we also have to address. We are having conflicts currently with industrial developers, with some members of the Downtown community, and with some of our council members because we have not suggested, at this time, that more of the industrial land be converted. And some of them have ideas about conversion. In all of the areas where we looked at the industrial land, with the exception of Central City North, we currently have community planning efforts going on that cover all of those industrial areas. It is important for us to provide, through that planning process, an opportunity for the policymakers and the industrial developers to propose changes and to have us analyze those changes to see what the impacts will be.

I think that we are prepared to have those discussions, but to change additional industrial land requires a thorough analysis and an environmental impact analysis, and that should be part of the real planning process. So, we are talking about how we can use that process to analyze some of the changes that the council members or industrial developers would propose.

CE: You can really break it up into two pieces. One is, here's what you do today under the current policy, here, staff, is how you regard these applications when they come to you. The second is, here's a long-term work program. We're going to look at updating our community plans on our redevelopment plan. Let's not forget that there are inconsistencies in the way we view these land uses between our two agencies. We want to fix those in the long term, but we will do it in a deliberative, open, public process as set forth in both the redevelopment law and in the city charter.

Second, we know that our zoning and building code is outmoded. Certainly, the way the codes view industrial land goes back to the days of steel mills and animal rendering plants. So let's update them to talk about new industries and technologies-industries that can coexist in some cases with other uses. But let's really delve into how to study that, rather than using codes that date back to the early part of the 20th century.

Third is an economic development strategy. That has to be a part of it. The first part is short term. The second part is the long-term work plan of which there are a few components. So that's what this directive is, and then there are a variety of supporting documents behind it. We put a lot of work into it; this is two years of staff effort, including a block-by-block analysis in some of these areas, where our planning staff and the Planning Department jointly surveyed, on the ground.

Can you elaborate on the industrial mixed use districts, the transition districts, and the significance of those designations?

CE: The industrial mixed-use districts are areas where we think a variety of ancillary uses, perhaps retail, office, and in some cases, some limited residential, may be supportable given the surrounding conditions and the conditions on the ground.

The transition districts are areas where we could see an orderly conversion to residential uses, and we've outlined in each case that certain community benefits should accrue by allowing that conversion. For example, we need to deal with worker displacement, small business displacement, investment, and infrastructure. These are not areas that were planned for residential development, so they need sidewalks and gutters and curbs and street trees-the most basic elements of creating a vibrant and livable residential community.

Then there are the correction areas that Gail has talked about in previous detail, areas that, in the past, were rezoned to industrial and didn't make sense. We created environmental injustices; we created hotspots that we need to now rectify. Most of those are in South Los Angeles. I think we've outlined an orderly way to fix those problems and hopefully address some of those inconsistencies and incompatibilities.

Gail, when you arrived from San Diego to become the planning director in L.A., a lot of people in the community had been starved for real planning to take place in a city that had been sort of transaction-by-transaction before. Did you expect it would be this difficult to do real planning?

GG: No. I don't think that I fully comprehended how ingrained the current system was, and how difficult it would be to change. In many ways, we are asking council members and the public to take a leap of faith with us as we move into a real planning process. In fairness, when I talk about community plans and the way we can make some real plans, I hear a lot of developers tell me that they were hoping that I would come out with a proposal for them to create a Pearl District, like in Portland, here in Los Angeles. But in the Pearl, it didn't happen project-by-project. It happened with a carefully developed plan with design guidelines and a huge investment in all kinds of infrastructure, including transportation.

But here, when you talk about a long-range plan, the thing that comes to mind for people is the last community plan for the city, which took 12 years to do. I can sympathize with that. If we take 12 years to do a plan, that is not going to solve the problem here. The commitment that we've made in the planning department is a three-year process for a plan, and it is absolutely critical that the Planning Department meets that commitment so we can show the development community and the council members that it is viable to participate in a planning process that produces results.

When you get a plan, you not only get that beautiful piece of paper that talks about it, but you get a zoning ordinance that rezones the property, and you can get environmental review that looks at the general environmental issues, so development in those areas becomes much easier. That's one of the things that we have not done in the past. We have to make it easy for developers in this town to do what we want them to do.

CE: We need Gail to succeed. It is absolutely essential. What's the biggest problem for the city that blocks any type of development, whether it's South L.A. or East L.A. or the east Valley? It's just too difficult, because you have to get a general plan amendment and a rezoning and you have to do environmental. We want people to invest there. That's why we're putting money into three of those community plans in South L.A.: We want Gail to succeed. We want everybody to be able to walk in-if they have pre-entitled land, it should be very easy-just come in to the permit office, go to the counter, and pull a permit, rather than having to hire high-priced lawyers, just to do a basic project. That's unacceptable.

In order for real economic development to happen in this town, we need Gail to succeed, we need certainty for developers. That's why CRA/LA is putting our money and our staff time into supporting the kind of detailed, community engaging, real planning that Gail has set forth.

Even though the Planning Department and the CRA/LA are trying to operationalize and implement citywide policy here, change is difficult. People don't voluntarily change; you win change. What are the challenges ahead for winning these arguments and actually changing behavior about how we plan and develop in this city?

CE: In Los Angeles, it's difficult. People don't have faith in planning because they've been disappointed for so many years. Gail hit the ground running her first year, met with anybody who would meet with her, and went out into the community. I can't remember the last time a planning director did that in Los Angeles. She gained a lot of credibility with the neighborhoods, and that's important. Now we both have to deliver on real plans and stick to them.

The first thing is to build faith and deliver on our promises to real community people, small businesses, well-heeled developers, community residents, and in all varieties of communities-not just the Westside, but South L.A., the Eastside, the Valley, places that have been neglected in the past by the city. The first thing is to deliver on promises to the neighborhoods. With that will come political support.

At the end of the day, elected officials are responsible to their constituents. If Gail and I just tell the city council and the mayor what we really think, it's ultimately their decision to adopt the policy. The policy that's embodied in the staff directive that we released is the adopted policy of the city council and the mayor. We've changed nothing. All we've said is, "Here's how you conform to the policy the elected officials adopted."

The land use attorneys have had their way here in the city for a long time, and Cecilia used to be one of them. They're rooting for you to fail, and they're pretty smart folks. What do they know that you don't?

CE: I'm not sure I agree with that. I think that the big land use attorneys in this town see that the future of this city is going to depend on a good economic prosperity strategy and predictable planning. So I don't agree with your premise.

But I think that what the attorneys know today that was not true a few years ago is that neighborhood groups are much more engaged than ever in the city of Los Angeles. The neighborhood council process has created an organizational structure for community input.

The reality is that the communities want predictability; they are demanding it. As much as we would like to provide predictability for developers, because that's important, it is equally important for community members to have some sense of what's going to happen in their neighborhoods. If they don't have plans that they can rely on and if they can't trust the city to implement the plans that they have bought into, then they are going to oppose every project that comes forward.

Frankly, that is a logical response to that kind of a project-by-project system. I do believe that the people who have the best interests of this city at heart do see that we are going to have to make changes if we are going to become the really great city that we have the potential to be.

If we interview the two of you in six months, what will we be talking about?

CE: We're going to be talking about the investment and economic development strategy that we're implementing. We're going to be talking about all the work we're doing on green industries and bio-med and some of the other growth sectors, because that's where we're focusing our efforts. This was the first step.

GG: I want to be talking about community plans, but more than me talking about it, I want the council members to be engaged in the community planning process. The power in this city is not in project-by-project analysis; it is in comprehensive planning, and we have to build support and confidence for that.

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