The Secession Question: A Special Report If Measure F Passes: A Roundup of Business Issues Business Taxes Almost Certain to Be Reduced Business leaders for and against San Fernando Valley secession, operating on both sides of the hill, agree on one thing: Facets of the city’s business tax and licensing system are in need of reform. In fact, key leaders from both the Valley and non-Valley portions of the city have worked together over the last few years to push for changes many of which have been implemented. Others are still under review, namely the call to eliminate the gross receipts tax. Below are a few of the key proposals offered by secession advocates for a new Valley city’s business tax and licensing system. – Ax the Tax: The Valley Industry & Commerce Association, which supports Measure F, launched the official campaign to do away with the city’s gross receipts tax. A new city government would likely reduce the tax on the day of incorporation, possibly by as much as 50 percent, and then slowly phase it out altogether over time. – Category Crazy: The city of Los Angeles has 48 different tax categories and businesses are levied by the type of work they do. Proposals would likely be made to reduce that list of categories to about six, or possibly fewer. – Business Blueprint: Several council and mayoral candidates support the immediate creation of a Valley city business team and a master plan for business development, which would include proposals for doing business with companies located in Ventura and Santa Barbara counties. – On and Off Line: One of the biggest complaints business owners have concerns the city’s licensing process. Proponents of cityhood say they would push for a one-stop, full-service system that could be duplicated at satellite offices across the Valley and on the Internet. – The Payoff: Lower taxes would provide an incentive for tax scofflaws to comply with the laws, proponents suggest, which would bring more revenue to the city. – State Support: The new city would likely act quickly to implement a plan for sharing tax information with the State Franchise Tax Board to track down tax scofflaws. Although Los Angeles city officials say they have laid the groundwork for doing the same, budget cuts and a hiring freeze have stalled implementation. – Jacqueline Fox Economic Development Sustained Experts say a potential new Valley city would have to focus on completing redevelopment projects as part of its overall economic development program before it tackles other economic issues. Although voters must still decide whether the Valley becomes a new city, area business leaders like Roberto Barragan, president of the Valley Economic Development Center, and Daniel Blake, director of the San Fernando Valley Economic Research Center at Cal State Northridge, said economic development must be a priority for the potential new city’s leaders. Barragan said officials of a new city must make completing existing redevelopment projects throughout the Valley a key to any overall economic development effort. Perhaps the biggest project in the Valley is NoHo Commons, a $180 million commercial and retail complex along Lankershim Boulevard near Chandler Boulevard scheduled for completion by 2004. The center is meant to revitalize the North Hollywood area with more than 1,000 jobs. Other proposed projects include the El Madrid Theatre renovation project in Canoga Park, a revitalization project along Reseda Boulevard and the 33-acre SunQuest Industrial Park project in Sun Valley. Although secessionists have said little about their plans for economic development, Barragan said he hopes they would also focus on continuing efforts aimed at revitalizing the local economies of North Hollywood and Pacoima. “Pacoima should be an absolute priority for a new city because it has seen a lot of benign neglect from the city and it should be improved,” he said, referring to the high crime and high unemployment in the area. Cal State Northridge’s Blake said a new city should also examine ways to further develop the Valley’s fledgling biotech and biomed industry. – Carlos Martinez Developers Want More Stability in Land Use In the two, five, 10 years or more it can take to bring a real estate development project to fruition, much can change, and most developers will tell you they’ve seen all the possibilities. But the prospect of an independent San Fernando Valley poses questions even the most hard-boiled veterans find difficult to fathom. – Will an independent Valley adhere to the zoning plans currently in effect, or will the new government start from scratch and rethink all the current zoning? – What would a Valley planning and permitting process look like? And will it be more or less efficient than L.A.’s? – Will an independent city be able and willing to reduce the fees developers now pay or would it impose even more? – Would Valley elected officials be any more accessible to developers? Consider the question of zoning. Even now, a developer who wants to build a project that complies with current zoning guidelines is not assured that the project will pass muster the system still requires that the size of the project, the types of tenants, the potential traffic problems, etc. be considered separately. But until now, at least, developers have been able to depend on the current zoning guidelines. “Unfortunately, it doesn’t give you the right to build, but it will get you to first base,” said Cliff Goldstein, a partner with J.H. Snyder Co. “So the biggest concern I would have would be, does the new city just buy into all of the zoning already in place?” If the new city does not, developers could find themselves stuck in limbo while new planning parameters are hashed out. “The problem is time for building a consensus,” Goldstein said, “It could paralyze any meaningful development for a long time.” Most developers agree that the current system is far from perfect. The permitting process is costly and the entitlement process is extremely time-consuming. VDA Property Co. Inc. recently had to notify neighbors that it would be digging down four feet to build an apartment complex in Studio City and wait 30 days for any potential responses, even though the property is zoned for multi-family use and the excavation is a customary element of the development process. – Shelly Garcia
