A Challenge for Riordan: Regional Business Growth

The fact that there has even been a debate over whether Los Angeles should take a deal that offers a new sports arena in downtown Los Angeles--free of taxpayer liability--doesn’t exactly bode well for economic development of the region. But that topic aside for now, there is actually some good business news for our city.

As promised, Mayor Richard Riordan has conducted studies on the cost of doing business in Los Angeles and on the city’s business tax system. With data in hand, the administration promises to deliver a tax reform proposal next month. Another Riordan project, the New Los Angeles Marketing Partnership, claims to have worked last year on 246 projects involving the attraction or retention of 36,000 jobs.

Riordan’s most recent success was securing a $400-million federal loan for the vitally needed and potentially profit-producing Alameda Corridor, a rail and truck expressway designed to speed cargo from the Los Angeles and Long Beach ports to freight yards in downtown Los Angeles.

In poor areas, the mayor’s efforts to assist business development have achieved mixed results. One new program will help minority-owned firms compete for Alameda Corridor contracts. Another, Riordan’s Minority Business Opportunity Commission, touts $3 billion in contracts steered to local companies, but most of it has involved construction or demolition work. Higher-grade projects would help.

The city’s failed application for a federal empowerment zone was an embarrassing setback, but the mayor did try to recover from that municipal blunder by playing an essential role in securing $740 million from federal and local sources for a Community Development Bank. It was designed to pump funds and jobs into the city’s poor neighborhoods. But at a recent date it had loaned just $7.6 million to 13 companies, with only $25 million more in loans on the way. That is not so much a flow as a trickle.

Contentious relations between Riordan and the City Council were a glaring problem in the mayor’s first term. The work of Riordan’s quasi-independent business team in the council districts this time around has helped smooth relations. For instance, the mayor and Councilman Mark Ridley-Thomas, once open political foes and even now not the best of friends, nevertheless are working together to revive the area around the Los Angeles Coliseum. Another mark is the progress toward a major retail center at the old General Motors plant in Panorama City, pushed by Councilman Richard Alarcon with strong support from Riordan.

The city’s corporate leaders consider the mayor one of their own and are prepared to follow his lead on issues affecting the city. That’s good to hear, but it’s also clear that the city’s economic revival is more strongly footed on the growth of small businesses with 50 or fewer employees. That’s a voice that needs to be heard in the debate on the city’s future.

The regional leadership approach that has long been been practiced by Silicon Valley cities and counties has begun to develop here, and that brightens the business horizon. The goal is to persuade Southern California governments that real growth rests in regional partnership, not in stealing businesses from one another. One of Riordan’s most important second-term jobs will be to bring those groups together and to act as their collective voice.