If a Picture is Worth a Thousand Words...LA is in Trouble
A picture is worth a thousand words.
Unfortunately for L.A.’s economy, the image below of thieves walking on railroad tracks littered with pilfered boxes in Lincoln Heights - has attracted more national news coverage than…
this one -
NASA’s recently launched $10 billion James Webb Space Telescope, which was mainly designed and built throughout the past 20 years in Northrop Grumman‘s Space Park in Redondo Beach.
To be fair, the Los Angeles Times and New York Times, and Wall Street Journal covered this accomplishment; but they missed a real chance to highlight LA’s robust aerospace industry and the Northrop team that played a leading role in bringing together the 300 companies and universities in 29 states and 14 countries to complete this project.
Instead what we get are a steady stream of NYT, WSJ and other newspaper articles finding clever ways to highlight LA’s failures - criminals robbing trains, local businesses, tourists, their own neighbors; homeless encampments lining the streets, and graphs showing scores of businesses and residents fleeing the region and state in search of a better quality of life.
While the real story line of LA’s resilience in the wake of a year of devastation and uncertainty, continues to get overlooked. Kearney’s 2021 Global Cities Report (see chart below) shows LA moving up two spots in the ranking this year, thanks to its ability to develop and attract top talent and provide a diverse array of cultural experiences, among other things.
We must do better to not let the bad news overshadow the good news.
Where do we start?
First city leaders must proactively address five strategic imperatives:
Win in the competition for global talent.
Embrace the rapidly growing digital economy.
Ensure economic resilience by balancing global and local resources.
Adapt in the face of climate change.
Invest in individual and community well-being.
Second, we know that Angelenos don’t lack for opinions on how to address the ongoing challenges we face as a society. And hopefully they will convey their opinions with fervor during our region’s upcoming elections for city, county, state and federal office.
But we need to go further into what is really causing all of this chaos in our communities, above and beyond the current pandemic?
The fact is, we have the technology and more than enough public and private sector dollars needed to effect change. What we seem to lack is a culture in our local government that embraces change and the institutional imagination necessary to move forward into a 21st century economy. And in some cases, both in the private and public sector, there seems to be a growing lack of morality.
The examples that stand out the most are the Federal Bureau of Investigation’s continuous attention bestowed on a small number of LA City Hall officials who did not subscribe to the core principles of right versus wrong.
Look at the picture above of people stealing packages from a train. This tells me that no level of federal or state government stimulus dollars injected into our communities and no amount of private sector job opportunities available, will keep people from taking what does not belong to them.
The affluent are not immune from this trend. It seems like no level of regulation or oversight will keep federally elected officials and wall street traders from insider trading to line their own bank accounts.
If LA truly wants to get its affairs in order and change its story line, I believe the best place to start is addressing its past and any ongoing corruption activities at LA City Hall…especially those involving real estate developments.
The current processes and interactions between the city’s planning, building and safety, LA fire, BoE and LADWP are opaque, time consuming and non fully transparent. This can lend to illicit actions.
To Mayor Garcetti’s credit, he focused resources to fix the massive bottlenecks between city departments. Executive Directives 13 and 30 and recent reports back from the Mayor’s Office to HHH seem to show some positive impact from the EDs on the development timeline for affordable deals.
They stated that the average time to get a building permit went from 456 days to 302. But it is still hard to get a good benchmark on how much of an impact they have had because each development is so different, so it would be beneficial to verify this new data.
Moving forward, another great way to streamline the development process and add transparency would be to learn from the work of the Mayor’s Operation Innovation Team, which worked in partnership with the LA Coalition.
The Team mapped out the City’s procurement process for services and discovered that it took 432 days to get through the contracting process, which created a built-in higher pricing model, that favored certain companies, costing the city tens of millions of additional dollars. (See Map Below)
The City should replicate this chart for its development process and set a goal of bringing more transparency to the process and reducing the permitting timeline down to a level that matches the private sector’s appetite to invest in LA.
As I have written in the past, LA has become the new money center (LA's wealthiest hold almost $425 billion) and a great place to park wealth in real estate. LA's real estate market now represents almost 4% of the world's total real estate asset value of $220 trillion, even though LA only represents .0012% of the world's population.
We need to find ways to unlock this pot of gold more than we have to better shape LA’s landscape in ways that not only develop a robust, sustainable and resilient city, but one that truly provides equity for all.
In return the public sector will reap the rewards - more revenue from property taxes - to provide our citizens a higher level of programs and services in the face of a unknown future.