Businesses Fleeing Downtown L.A. In Droves
By Walter Moore, Chief Economist and Legal Analyst, L.A. Policy Institute.According to a construction trade group that calls itself "the Los Angeles Economic Development Corporation," the number of people living downtown is up, and the number of jobs is down -- WAY down.
The group's faux economist, spokesman Jack Keyser -- who has no degree in economics -- says there were 605,000 jobs downtown in 1995, but only 418,000 today.
Did you get that? During the past 12 years that the career politicians in City Hall have been running things, they lost nearly 187,000 jobs downtown.
The number of people living downtown is 28,878. The trade group touts that as being up 20% from two years ago, but all that means is that the population has risen by just 4,813, from 24,065. In a city with a population of nearly 4 million, that's not what you call "massive."
No word, by the way, on how many of those 28,878 people have jobs. Query how many of them are simply homeless people that local hospitals have dumped.
Now let me ask you a question: with the number of jobs down 187,000 over the past 12 years, and the number of residents at 28,878, would you invest YOUR pension fund in the financial success of downtown? I ask because City Hall is betting hundreds of millions of dollars of YOUR money on it.
You should also now start to understand why so many buildings downtown have been, and are being, "converted" to residences. It's not because everyone wants to live downtown. Rather, it's because this city is so hostile to businesses -- except developers who contribute to career politicians -- that those businesses have fled, leaving behind empty offices galore.
By the way, you're supposed to notice that, in the picture above, all the cars on both sides of the freeway are headed in the same direction, as if, say, 187,000 people fled downtown L.A.
Get the details in the L.A. Times.
Posted by Walter Moore @ 2/20/2007 10:44:00 PM
13 Comments:
Hahhh, Walter launches a cruise missile right at Kyser's credibility as an economist! Question his credentials, run the numbers, just like any good trial lawyer would. This is why I enjoy reading your posts. Don't let up.
Walter,
Are you saying that many jobs left Los Angeles -- or just one section of the city that is 6 miles in diameter?
Is it possible those jobs if not more exist in Los Angeles still?
The article refers to downtown L.A., but I recall reading studies a few years ago indicating that THOUSANDS of businesses have left the city altogether. I seem to recall also that neighboring counties had slight gains in the numbers of businesses operating there.
Anecdotally, if you've lived here 20 years, you notice the departure of business. We used to have aerospace, banking, manufacturing, airline headquarters, garment manufacturing -- good employers. They're gone. Indeed, if someone out there knows what industry we have left, let me know. We seem to be all about retail and government employees now.
I used to work for the city's tax and permit department as a field rep(now know as tax compliance officer).
During my year and a half there, I found that several large scale companies had left city of Los Angeles for other southland cities. The resounding reason for the departure was the overall cost of doing business downtown combined with the excessive regulation imposed by the city. In each case, either the businesss was replaced at the location by a lower end business such as self storage or garment factory, or the location simply sat vacant.
One of the owners of Farmer Boys(on Alameda)told me that he had no clue how expensive and difficult it would be to start up a business here, and that had he known ahead of time, would have been less likely to open the location.
I'll note that Farmer Boys is just about the only clean and edible restaurant in the area(that also includes a McDonalds and Jack in the Box).
BTW, there are still some manufacturers but nearly all are comtemplating or have contemplated moving out of City of Los Angeles. The largest concentration of these is to the south west of the garment district and between the 110 and Alameda, Washington Bl to the 10 Fwy. There are also a few more in Chinatown between Main and Broadway.
Thanks for the info.
My law firm used to be in the unincorporate county area specifically because of the idiotic L.A. business tax. The time it took just to do the calculations required (e.g., doing an inventory of all your pieces of equipment) was just as bad as the tax itself.
And when you have a City Council that loves to tinker in business decisions -- e.g., deciding that hotels by the airport should pay higher wages -- well, why would you open a business here if you have any alternative? The regulatory environment is so hostile that the only business worth opening, barely worth opening, is retail, due to the sheer number of people here.
P.S. Thank you, 11:42.
Walter,
Don't know if you need this, but if you want publicly-available financial and background info on the LAEDC (exec compensation levels, past deficits etc.), go to www.eri-nonprofit-salaries.com, then click "Search Form 990s" (top right), input "Economic Development Corporation of Los Angeles," then click "Form 990" (top right)
Very cool! Thank you! Yes, I want to know much more about these fronts that gain credibility by calling themselves "non-profit," when, in reality, they are simply the marketing arm of trade groups.
You're welcome Walter. FYI: this group's Form 990s from 1998-2005 are posted in PDF files. You may have seen this already, but the 990 for 2004 shows a deficit for the year of $803,000 (although 2005 shows an excess). Kyser is also well-paid: $175,000.00
Why am I not finding the organization using the website's search function?
Make sure in the "Search Form 990's" box you input the phrase "Economic Development Corporation of Los Angeles" (not LAEDC). Hit search, then click on the link, then "Form 990" in the yellow box on the right. This will bring you to the 990 links and IRS info. Some interesting names in the "Directors as Needed" category.
Ah! Thanks! I didn't know that was the front's real name.
Oh my God! You people have to read the Form 990! These people totally put the "profit" in "non-profit." We're talking a multi-million dollar entity here. Man!
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