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Saturday, Sep 23, 2023

Hands On Experience

Sure, the San Fernando Valley area has its share of challenges. But it also is in a great position to enjoy a prosperous future. That’s the overall assessment of some of our area’s most deeply connected and longstanding business leaders. We asked three power players in the local economy to stop and take a few moments to ponder the current economic status as well as the prospects of our region. And our panel – we call them “Valley Visionaries” – came up with some insightful observations and prescriptions. The overall assessment can be summed up by the view of Tamara Gurney, founder of Mission Valley Bank and its longtime chief executive. The Valley area “should remain an economic powerhouse. But we need to transform to keep up with the changes that technology and other advances are bringing every day,” she said. “The area is fast becoming a manufacturing-less center, and more of a tech capital often referred to as Silicon Valley South. This brings endless possibilities if we have the vision and conviction to make them happen.” And when it comes to a vision of the future, Kenn Phillips, the chief executive of the Valley Economic Alliance, sees a very different Valley area decades from now – years after driverless cars become commonplace. “By 2050, the Valley will build roads that can charge electric vehicles as they drive. As the population of the Valley doubles by 2050, our 4 million residents will live in mega-skyscrapers, and never-seen-before buildings will be the new mini cities,” Phillips said. “This would result in shorter trips and require less fuel, hence its appeal. I’m looking forward to Amazon’s new massive autonomous drones transporting me to different floors because elevators will be difficult in buildings this tall.” But our visionaries absolutely agree on this: achieving our economic potential in such a future will require that education be a topmost concern. “Our education system is one of the most important economic engines in the Valley,” said Rickey Gelb, founder and chief of the Gelb Group, a real estate development and property management firm focused in the San Fernando Valley. “This will continue to be the case as long as we don’t kill it by maintaining the status quo. We need to fix it sooner than later if it is going to survive in the years to come.” He frets that higher education is too expensive for many would-be students. As a result, “less than 50 percent of the qualified population has a legitimate chance to fully take advantage of its offerings.” And graduates carry sometimes crushing debt that takes years to pay off, effectively delaying their contributions to our economic vibrancy. And Gelb sighs at the notion that too many young adults cannot even get into a college or university. “The administration has no system in place to make sure we have room for all the qualified applicants,” Gelb said. He wishes education were run more like a business “with some type of incentive structure to administrators for keeping more classrooms filled with students.” Gelb continued: “The return to society by an educated population far exceeds the costs incurred to underwrite a subsidized state and locally supported higher education system. We should be accepting our own citizens and legal residents first and then bring in foreign students if space is available.” Past is prologue In many ways, the economic future of the entire Valley area springs from its history. Filmmaking was one of the first important industries here, and it remains so. Said Phillips: “Today, the San Fernando Valley is the center of motion picture and television production in America. Walt Disney Co., Warner Bros. and NBCUniversal are all headquartered here. This multi-billion dollar economic engine supports countless allied companies and creative professionals who showcase their art from here.” Also, aerospace and defense companies were big in the past and while they may not be today what they used to be, they still employ thousands of people, Phillips noted, including skilled research and development engineers and designers. Gurney agreed, and added that historically, “as a part of the Pacific Rim, we’ve also enjoyed the benefits of trade and commerce, supporting a flourishing manufacturing sector in our region.” Gelb, who grew up in the Valley, remembers a time when the economy was expanding and “everything was very reasonably priced including housing, telephones, utilities and even trash hauling. Then all of a sudden, the government discovered there was a pearl in the oyster. Suddenly, virtually overnight in the 1980s, a barrage of new taxes and regulations appeared.” Indeed, our visionaries generally decried the state of taxes and regulations in the Valley and throughout the state. They drive up costs and continue to hurt economic prospects, they said. “Every day small businesses are either moving out of state or being driven out of business as a result of the cost of doing business in Los Angeles and thus the Valley,” said Gurney. “Our leaders and politicians talk about being more business friendly, and every day put legislation or taxes in place that drive business away,” she continued. “The high cost of living in the area, coupled with the lack of affordable housing, is a big economic problem.” Indeed, Gelb noted that the many regulations prevent progress, particularly when it comes to redeveloping rundown properties. “Any time an enterprising individual or business attempts to tackle one of these problem areas, there are so many regulations and restrictions to overcome it takes months or, more often, years before all the permits and financing are finally in place,” Gelb said. The lack of new construction helps push up rents, he noted, making it more difficult to live in the area and attract business. New wealth There’s always promise when the next generation arrives for duty. And Gurney, for one, is hoping for a future in which philanthropy steps to the fore. “It is interesting to note that the Valley is at the threshold of experiencing a trillion dollar wealth transfer over the next decade,” she said. “I wonder how this will impact our area. “If a small part of this wealth transfer is directed back into our communities, it could have a huge impact on creating the vision for 20 to 30 years from now. Records show that our Valley, as compared to other regions around the country, is not as philanthropic,” she continued. “What if enough of us got together and supported local charities that provide services to the homeless to get them off the streets, into housing and jobs and becoming productive members of society?” she asked.“There are hundreds of Valley nonprofits doing tremendous work in the areas of education, health care, homelessness and the like. If we direct our resources to support them, we all benefit with world-class services that will attract and retain businesses and residents for years to come.”

Charles Crumpley
Charles Crumpley
Charles Crumpley has been the editor and publisher of the San Fernando Valley Business Journal since March 2016. In June 2021, it was named the best business journal of its size in the country – the fourth time in the last 5 years it won that honor. Crumpley was named best columnist – also for the fourth time in the last 5 years. He serves on two business-supporting boards and has won awards for his civic involvement. Crumpley, a former newspaper reporter, won several national awards and fellowships for his work, and he was a Fulbright scholar to Japan.

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