L.A. Makes Room for Economic Impact Office

0

Blow by blow, city ordinances were turning Los Angeles into an impossible place to run a company, many business leaders said.

The turning point was the living wage ordinance imposed on airport-area hotels in 2006. That led business groups to call for the creation of an economic analysis office at City Hall. The role of the office would be to examine the business impacts of any regulations and legislation before adoption.

The council finally acted last week, voting 14-0 to create the Office of Economic Analysis, which will evaluate the impacts of proposed ordinances on local businesses, job creation, sales tax generation, income growth and other economic factors. It will also provide research for initiatives the city could take to spur economic development.

“The city of L.A. will now have the tools to understand how city policies affect job creation and our business climate,” said Gary Toebben, chief executive of the Los Angeles Area Chamber of Commerce. “This is invaluable information as all of us work together to strengthen L.A.’s economy.”

The vote came in response to complaints from the chamber, the Central City Association, the Valley Industry and Commerce Association and other groups. They contend the cumulative effect of many regulations and fees makes the city business-unfriendly, which in turn pushes companies to move to neighboring cities such as Burbank or Calabasas.

“The fact is that decisions are made every day by the City Council and they don’t understand what economic impact those decisions have,” said Stuart Waldman, president of the VICA.

The office is modeled on San Francisco’s, which was launched in 2006. Among the proposals analyzed in that city were a proposed “pay-or-play” health care mandate on employers, changes to rent control and a proposed hike in real estate transaction taxes.

Council President Eric Garcetti and Councilman Greig Smith introduced a motion to create the L.A. office late last year as businesses were reeling under the impacts of the recession.

“We need to ensure that the city has the rigorous, independent research it needs to best create jobs and improve the economy,” Garcetti said in a statement.

But establishing the office doesn’t guarantee that the council will agree with its recommendations. In San Francisco, the Board of Supervisors has adopted proposals despite the office’s dire warnings about their economic impacts. For example, the board approved the “pay-or-play” health care mandate on employers.

Waldman acknowledged this could happen in Los Angeles, too. But, he said, it’s also possible that once an economic analysis of a proposed ordinance came out, lawmakers could tweak the proposal to reduce its negative economic impact.

Previous article Offices at the Top Are Going Empty in L.A.
Next article Disney Battles Time Warner Cable with New Website
Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

No posts to display