For too long, L.A. businesses have been stolen from us by other cities and states. The result has been a calamitous decline in both jobs and tax revenues in our city, causing huge strains on our budget and endangering our ability to provide basic city services. For example, since 1986, an astonishing 100 auto dealers have left Los Angeles, costing the city up to $57 million in revenue each year.
We are fighting back, and starting to see real results. Two years ago, after the historic economic downturn, which hit California and Los Angeles particularly hard, we redoubled our efforts to recruit job-creating companies to Los Angeles. I built a team focused 24 hours a day, 7 days a week on growing our economy and creating jobs. Working with business and civic leaders across the city, we implemented a five-point plan to bring good jobs and world-class employers to Los Angeles:
- Reforming our business tax.
- Reducing bureaucratic red tape.
- Making sure local tax dollars fuel local jobs.
- Securing our future as a global trade hub by modernizing Los Angeles International Airport and the Port of Los Angeles.
- Accelerating infrastructure jobs by building a 21st century transportation network.
A healthy environment for job creation is the best medicine for strengthening our city. By creating local jobs, we will build a more robust and diverse revenue base to support the services Angelenos deserve.
Two weeks ago, I signed a Local Preference Ordinance that will spur local job creation by leveling the playing field for local businesses competing for city contracts. We hope this new tool, along with the Business Tax Holiday we implemented last year, will make Los Angeles an easier place to create jobs.
We're leveraging assets like advertising space at LAX to win business. We are making strategic use of federal grants to bring world-class firms to Los Angeles.
Using federal community development block grants, which are designed to help lift communities out of poverty and create jobs, we persuaded two quintessentially L.A. companies to move to downtown.
BYD, China's premier global, high-tech green company focused on developing electric vehicle technologies and efficient alternative energy sources, has chosen downtown to locate its North American headquarters. The new facility, along the Figueroa Corridor, will bring an estimated 150 green-collar engineering and management jobs to Los Angeles and hundreds of indirect jobs. In 2010, BYD was ranked the eighth most innovative company in the world.
Gensler, one of the world's foremost architectural and design firms, has moved its regional headquarters, employing more than 300 people. In gross tax receipts alone, the city will realize a minimum 250 percent return on its investment. That's not including tax revenues from meals, hotel rooms, gym memberships, and housing and more.
'The place to be'
These are the types of companies we need -- trailblazing leaders in their fields that not only create jobs and generate revenue but help define Los Angeles as "the place to be."
Of course, in Los Angeles nothing significant happens without controversy, and we've heard some complaints that the city should not be spending public money offering incentives to companies like BYD and Gensler. In this case, it's the critics who are failing to see the bottom line.
First and foremost, we did not use money from the general fund to attract these important new companies, and no city services were affected. On the contrary, we leveraged federal dollars exactly as they were intended to be used.
Some say we should be using federal grants only to take care of our downtown homeless population. Again, this criticism misses the mark. In fact, we use the vast majority of these federal grant dollars to house the homeless and lift Angelenos out of poverty. We've reserved a modest 14 percent of these funds for job creation and economic development. In fact, some would argue that isn't enough.
We've even heard some say the city shouldn't be in the business of working to attract business from neighboring cities. Ah, if things were only so simple. We know, California in general - and the city of Los Angeles in particular -- have been major targets of deliberate business-poaching efforts by other governments all around the country. As Texas Gov. Rick Perry likes to say, "If California doesn't want your business, Texas does."
Fundamentally, we are going to have to change our mentality in Los Angeles. We are still sadly paying the price for many of the anti-business policies of our recent past. I'm committed to using every tool at our disposal.
I am proud that we are doing more than any other administration in recent memory to create jobs and strengthen our economy. If we lose this fight for business, there will be devastating long-term consequences for all of us who depend on our Police and Fire departments, and who rely on city government for basic public services.
You can imagine what the critics would have to say then.
This op-ed originally ran in the Los Angeles Business Journal.