LAEDC's L.A. County Economic Strategic Plan Unanimously Adopted

LAEDC has engaged and solicited input from more than 1,000 stakeholders in more than two dozen public forums to produce the first ever comprehensive, consensus, strategic plan for economic development in Los Angeles County. What are the results of that process?

Interestingly, we began the work even before the recession was formally declared nearly two years ago now. We began the work recognizing that the economy moves in cycles, and even though we had been in a friendly, upward economic cycle for a few years, particular areas of Los Angeles County were not creating any new jobs to sustain our growing population, most notably in the city of Los Angeles. We began a survey process to talk to businesses, which are the creators of private sector jobs, about the obstacles they were facing. As we studied survey responses and met in focus groups with a few hundred of the principles of various businesses throughout the county to dig deeper, we discovered some common concerns about the quality of our workforce, the relative business friendliness of local governments, the deteriorating quality of our infrastructure, the wisdom, or lack thereof, with which we make land use decisions, and the declining quality of life around basic education and mobility in our communities. We then began a scan of global best practices and found dozens of leading regions around the world that had put together plans to address concerns of their sectors and to enable private sector job growth in their regions.

As the recession hit us with full force over the last year, we were well into the public workshop process and it was not difficult, therefore, to get the attention of disparate civic groups throughout Los Angeles County-groups that might not have previously gathered with business and government leaders to discuss economic development. Labor organizations, environmental groups, environmental justice groups, and other community based organizations, were more than willing to gather with business, education, and government partners to address the very real challenges our region was facing in supplying enough good quality jobs for our growing population.

Out of those discussions came the first ever consensus plan for economic development in the county's history. Because of the broad and diverse nature of the public workshop participants, the County Board of Supervisors wisely, quickly, and unanimously adopted the plan on December 22, and we are now involved in the implementation of this five-year plan, working collaboratively with many of the stakeholders who helped draft the plan.

How do you benchmark the metropolis of Los Angeles against other regions? Is the consensus plan the lowest common denominator or is it competitive with what other regions have produced?

The consensus nature of the plan is in alignment with the approach taken by the most enlightened regions around the world. As you look at these broad regional plans they tend to be consensus oriented and set an overall vision, some aspirational goals, and some broad objectives for enabling a healthier economy in years to come. Once you get disparate interest groups aligned behind common principles and objectives, you can then set up working groups to define more specific strategies and actionable items to reach the overall objectives.

Our plan talks about the urgent need to modernize Los Angeles International Airport as a key gateway to the global economy and, similarly, to modernize and improve the infrastructure of the Los Angeles and Long Beach seaports. Once you get everybody, including the environmental community, to agree that it is important to modernize these facilities and make them of 21st century quality to support a 21st century economy, you can get to the specific questions of how to do that modernization.

For years there has been resistance in parts of our communities about whether to improve Los Angeles Airport at all. We sensed that the prevailing affect in this region was not to invest in Los Angeles International Airport; the choice was to regionalize air traffic. Because that was the prevailing wisdom some years ago, the airport traffic at LAX was regionalized. Where LAX used to have approximately 76 percent market share of air travel in the county, that has been reduced to something below 55 percent. That traffic has moved to Long Beach, Burbank, Ontario, and other airports in the region. Now we have recognized that LAX plays a central role in connecting us with the global economy, and we have let it deteriorate too far and for too long. We wanted to develop a new consensus vision that it must be a priority for modernization and improvement.

Similarly, on the subject of industrial land use, a clear consensus had not emerged prior to our effort about the importance of preserving, reinvesting in, and redeveloping industrial land as a place to locate the middle class jobs that have been disappearing from the county in recent decades. The United Way recently issued their "Tale of Two Cities" report and talked about the disappearing middle class and the rising upper and lower classes in Los Angeles County. One of the reasons for that trend has been the loss of industrial land in our region, on which some of the best middle class jobs exist. Entertainment studios, aerospace manufacturing, trade, transportation, and logistic jobs, and construction-related jobs predominately take place on industrial land. When you take away, as the city of L.A. did over the past few decades, nearly a third of that land, you remove the opportunity to site new well-paying jobs and new businesses for the growing population of the region. Gaining a common consensus about the value of industrial land was an important step, now we can talk about where to invest in redeveloping and refreshing our industrial land supply and where, if possible, to create new industrial land opportunities in the county.

Articulate a little bit more about implementing smart land use. How does that fit into the strategic plan?

There are a number of opportunities that have been missed in recent decades in Los Angeles County relating to smart land use. One opportunity is to be clearer at the local government level about intended plans for land use in cities and the unincorporated areas of the county and to be clear about updating our general, community, and specific plans to enable by-right development. We now will move forward with the consensus view that emerged in the planning process that such planning is a good thing. We will now work with our local cities and our county to update these plans and to create economic development elements in the general plans of cities that do not have them. Only 22 of our 88 cities even have an economic development element in their general plan. The county has one, but it's nearly 30 years old.

The subject of research and development facilities to help commercialize the intellectual capital coming out of our world-class research universities and other private and non-profit research institutions is another missed opportunity, because we have not heretofore clearly articulated a priority around research and development land use. Each of our major research institutions, whether Caltech, UCLA, USC, L.A. Biomed, Cedar Sinai, or City of Hope-the list is long-should have research and development parks as close to them as practically possible. This will also be an opportunity during the implementation phase to look to identify appropriate land parcels and define financing schemes and development opportunities to realize that vision.

The report includes the goal to "create a business friendly environment." What were the survey's participants expressing with this goal?

There was universal agreement that our local governments are not sufficiently business friendly, nor are our communities. We have taken NIMBYism to a very advanced level here in Los Angeles County. We hear beyond the county, as I travel around the world, people referring to us not just by the acronym NIMBY (not in my back yard), but also by the acronym BANANA (build absolutely nothing anywhere near anybody), and as CAVE people (citizens against virtually everything). This gives a very discouraging image about developing in Los Angeles County.

We have to educate our communities, as well as their elected leaders, on the value of private sector jobs and how private sector jobs generate wealth and a tax base that allows local governments to provide the services upon which we depend as a people.

We need to adopt clearer, more reasonable, and more predictable processes for the development of land to facilitate job creation. These are very real and urgent opportunities in many of our cities. I credit the city of Los Angeles and Mayor Villaraigosa with recognizing this and hiring a fellow named Austin Beutner as his new first deputy mayor overseeing all economic development in the city, giving Austin the mandate to help streamline processes within the city of Los Angeles, rationalize the pricing structure that business and developers pay to operate in the city, including the reform of the gross receipts business tax, and developing a stronger customer service ethic throughout City Hall. If Austin is successful, the city of L.A. will transform toward a much more business friendly image.

The LAEDC is about retaining, attracting, and growing new jobs. In that light the L.A. Times had an op-ed by Russell Goldsmith this month talking about a blueprint for job creation-neglected for years -hat he and others, including you, put together. Why is that blueprint essential now, and what are its prospects going forward?

The blueprint created by the Los Angeles Economy and Jobs Committee (LAEJC) and further refined recently by the L.A. Coalition, both of which have been chaired by Russell Goldsmith, is very much in alignment with our countywide strategic plan and prioritizes a more business friendly city government, expansion of the Port of Los Angeles in an environmentally friendly way, and a modernized LAX facility, along with other key strategic priorities. It was the product of dozens of leaders of different interest groups from government, education, business, and labor, focused on helping the city of Los Angeles turn around a 30 year trend of losing jobs while gaining population. Much of Russell's motivation, and perhaps of the group that followed his leadership over the last few years, was the distressing fact that the city of Los Angeles had added more than one million people to its population while losing more than 100,000 jobs in the city since 1980.

We now have a very clear blueprint for the city of Los Angeles laid out by the LAEJC and a very clear and well-aligned blueprint for the entire county laid out by the more than 1,000 stakeholder groups that worked with the LAEDC to create a countywide vision. Now we have to move them both into the implementation phase.

Austin Beutner actually said to the mayor and a number of business leaders, including Russell Goldsmith, at a breakfast that I attended, that these blueprints are excellent documents but will not be quickly or thoroughly implemented until the culture in the City Hall of Los Angeles changes. That is really his task: to provide strong leadership within the city to gain commitment from all the elected officials, the department heads, and the staff ranks from top to bottom that these blueprints are the appropriate direction for the city to move and that the city in fact has a role to play in generating a healthier economy and, with it, the tax base that will shore up the city's current desperate fiscal situation.

LAEDC, in combination with the World Trade Association, has been on economic missions in the Pacific Rim and other places. What are those companies and countries looking at for location opportunities in metropolitan L.A.? What kind of criteria do they use to choose whether it's metropolitan L.A. where they might best settle?

We're talking to a number of sizable Asian firms as well as sizable European firms that are looking to establish North American headquarters and, in some cases, manufacturing or assembly facilities in Los Angeles County. Some of them may choose multiple sites-they may choose a headquarters location in a dense urban environment such as Downtown, Century City, Pasadena, Santa Monica, or other areas with the appropriate profile for a headquarters company-El Segundo, Long Beach, etc. They're also looking in north county areas at assembly sites for a wide variety of products, because some of our largest parcels of land available for development or redevelopment are in the north county area, specifically the Santa Clarita and Antelope Valleys.

We are challenged by a very low vacancy rate for industrial land throughout the county and particularly the central core of the county. Many of these firms would like to have their manufacturing facilities in the urban core where there is a talented labor force and transportation systems that can connect people to job sites. But it is difficult to assemble sufficiently large parcels for the size of companies that we are talking about that are considering bringing many hundreds of jobs to their assembly sites here in L.A. County. Different companies have different needs and our ability to assemble sufficiently sized parcels will impact our ability to locate these companies in various parts of the county.

They are universally looking for business friendly governments. They are remarkably well informed about the concept of being business friendly. Most of these companies have been wooed by other cities and other states in this country, many of which rank higher in the professional assessments of site location experts as to the relative business friendliness of their regions or states.

We have educated many of these international companies with the different degrees of business friendliness within the 88 cities and the unincorporated areas of our county. They are looking for governments that have clear and predictable development processes, teams of city staff focused on locating and enabling the growth of these businesses, and pricing structures that don't add to their cost in a global, highly competitive industry. They are very sophisticated in what they are looking for, and we are helping them understand the various value propositions offered by each of the cities in L.A. County.

How would our readers know of progress being made both in the city and the county to change the culture to be more business friendly?

We've created a website at lacountystrategicplan.com where people can follow the progress of this plan, not only on a county-wide basis-we will regularly report on the progress of individual cities within the county to achieve the objectives laid out in the plan. There will be both quantifiable measures of progress and qualitative measures of progress.

So, they can focus on the infrastructure areas, for instance, and see if LAX actually launches and completes a capital improvement plan to address serious deficiencies at the airport, both basic infrastructure around the central utility plant and baggage movement systems, as well as the terminal improvements and runway improvements necessary to provide a safe, modern facility. There has been talk for nearly 30 years about those improvements but very little action. The new airport Director Gina Marie Lindsey is highly competent and committed to these improvements but she and her team will need a broad coalition of support for their projects to be fully and expeditiously realized.

Similarly at the ports, seeing approval of more of the environmental impact reports related to terminals and on-dock and near-dock rail improvements will be a very clear sign of progress. Seeing the Los Angeles Department of Water and Power develop a solar plan that incentivizes private sector participation in the de-carbonization of the utility would be a concrete example of a move in the right direction.

It will be important to see our city governments become more business friendly, following the lead of those cities we have honored at the LAEDC, including El Segundo, Lancaster, Santa Clarita, Long Beach, Vernon, and Santa Fe Springs, for being among the most business friendly. The most business friendly city we first honored was El Segundo, which today has a 5.6 percent unemployment rate; the city of Los Angeles has a 13.4 percent unemployment rate. The very small city of El Segundo, which has less than 20,000 population, has essentially as many Fortune 500 firms headquartered there as the city of Los Angeles, a city of more than four million in population. There is very clear evidence that being business friendly attracts jobs. There are nearly 80,000 jobs within the city of El Segundo.

People will look to see declining unemployment rates in cities; they will look to see infrastructure improvements; they will look to see economic development elements in general plans; they can look to see investment made in industrial land redevelopment to provide new industrial parks on which we can attract and grow new middle class jobs for our still growing population.

How difficult is it in this metropolis of 4,000 square miles and 10 million people to get focused on the county's economic agenda? How difficult is it to bring the disparate interest groups together to reach a workable consensus?

It has historically been an overwhelming challenge to align the various disparate interests across Los Angeles County around common principles related to economic development. The silver lining in this terrible recession we've been going through is that it has focused attention on the need for such a plan.

The process of bringing these disparate interests together was substantially enabled and facilitated by the pressing problems each of our local governments and industry clusters have been facing over the past year. Now the challenge is to get people to act in alignment with their articulated vision and strategy. That is where we find ourselves today, engaged in meetings with a number of cities and a number of elements of county government to move to implementation of the various strategies identified in the plan.

Keeping people focused on that at a time when each one of these local municipalities is fighting for their very survival financially will continue to be a challenge. As people are fighting for their jobs, their budgets, and the very survival of their departments in many cities and in the county government, it will be a challenge to keep them focused on the implementation of this plan. At the end of the day, the successful implementation of this plan will play an important role in resolving the fiscal crisis that each of our local governments is facing.

Is the business community up to the challenge?

The business community is rallying like never before. In each of the leading business organizations, and I am a board member of many of them, I am seeing more business involvement than I have seen in many, many years.

The involvement at a very thoughtful, intellectual level of engagement of our board at the LAEDC is as high and purposed as I have ever seen it, and I believe the same can be said of the Los Angeles Area Chamber of Commerce, the Los Angeles County Business Federation, Russell Goldsmith's L.A. Coalition, and any other business group. Each of these existing and emerging business groups is drawing a level of attention and focus from the business community that I haven't seen in many years. Frankly, it's a very constructive level of involvement.

There has been complaining for years about what is wrong with our region; now I'm seeing constructive suggestions and a willingness to roll up individual and collective sleeves to get to work fixing what's wrong in our region, and that is a very positive and encouraging development.