This week, the Valley Industry & Commerce Association (VICA) solicited real businesses in the Valley for answers to the age-old question: Why is it so hard to do business in the City of Los Angeles? Not surprisingly, much of our members’ input centered on the goings-on at City Hall. After the month the business community has had at the mercy of city leaders – including a 70 percent minimum wage increase for hotel workers and a proposal to raise the minimum wage citywide – it’s hard to disagree. But the city’s business-unfriendliness isn’t just about union wrangling and the highest minimum wage in the country. Concerns were raised about Mayor Eric Garcetti’s leadership abilities, particularly his steering of city staff and staff accountability. “The mayor has no realization that he makes no impression on those who need his leadership the most,” said the owner of a Valley firm. Many of our respondents voiced the same complaints about city staffing, particularly in the Department of City Planning. “The City of L.A. is not equipped to handle the ups and downs of the real estate market,” said a Valley developer. “They reduce staff during the recession, but they don’t add staff during the upturn, leading to backlogs, frustration and delay.” “The slow process is due to the Planning Department being eviscerated by budgetary cuts. Restore the staffing levels, task one deputy director to ensure projects are proceeding and cease sunset clauses on discretionary approvals,” said Wayne Avrashow, an attorney and former deputy to two city councilmembers. A report by real estate firm Cassidy Turley showed a $30 billion investment in commercial real estate for Los Angeles and Orange County last year. Yet the city’s existing permitting process and low staffing problem don’t make this hugely profitable sector of the economy a priority. VICA has worked to appoint Valley business leaders to the re:code L.A. Zoning Advisory Committee, which seeks to overhaul the city’s permitting process. We hope that the newly drawn policies alleviate the bureaucratic hurdles developers have been facing. Of course, developers aren’t alone in navigating the city’s intricacies. The complicated tax and regulatory policy is not an uncommon grievance among business owners. “The city keeps changing the rules when it comes to how they tax business,” said Pam Berg, owner of MMP Printing. “Last year during the routine business license tax audit, the city of L.A. decided they now want to charge tax on all sales of postage. As a commercial mailer, postage is the largest part of my sales. It is also a pass-through item. I know of nowhere else in the country where businesses are charged a tax on postage.” Does any of this sound familiar? Each account is a template that any Los Angeles business could use to write its own story about dealing with the city. Doing business with the city is widely regarded as time-consuming, expensive and difficult. But how does the city’s landscape affect business? As it turns out, trying to run a business in a city whose population has outgrown itself is no picnic, either. “One of the major issues in L.A. is the traffic,” said Scott Murphy, president of AmeriTel Inc. “We have salespeople and technicians in the field every day visiting our clients. The time loss from sitting in traffic is massive. It may take me two hours of driving to make a one-hour appointment with a client or prospect. That cost almost a half day of my time.” VICA has long prioritized issues of traffic and transportation in Los Angeles, spearheading efforts to get the Valley its fair share of Metro dollars. The time Angelenos waste sitting in traffic during their commutes is huge – and the effect of that lost time on the economy is staggering. “Real estate, housing, office space, the new minimum wage, taxes – how does a business in L.A. compete with businesses out of state?” asked Murphy. “Only a company in a service industry where you have to be local to your clients can compete – like AmeriTel. We have to live where our clients live. However, if our clients that manufacture or own businesses can operate anywhere – how do they compete with those businesses in lower-cost areas? They have a hard time, so they move out of L.A. and we lose a client. L.A. loses jobs and tax revenue. But somehow, we don’t seem to lose any vehicles on the freeways. How does that work?” VICA encourages businesses to engage with the City of Los Angeles in forming business-friendly policy that keeps us competitive in the national and global economy. It is becoming increasingly apparent that businesses can’t live on sunshine alone. The Valley Industry and Commerce Association is a business advocacy organization based in Sherman Oaks that represents employers throughout the Los Angeles County region at the local, state and federal levels of government. – How to reach us Guest Opinions: Op-ed pieces must be 700 to 800 words and on topics about the San Fernando Valley business community. Please submit op-ed ideas to [email protected].
