Welcome to the Los Angeles Works Newsletter. The Mayor’s Office of Economic and Business Policy (OEBP) publishes the Los Angeles Works Newsletter to announce new resources and developments and advance its mission of retaining, growing and attracting quality jobs and businesses to Los Angeles.
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Mayor Signs Auto Dealership Gross Receipts Tax Elimination into Law
On July 9th at Los Angeles’s new Kia Downtown dealership, Mayor Antonio Villaraigosa signed into law a City ordinance exempting new car dealers from the City’s gross receipts tax. This signing was the culmination of efforts set into motion last fall, when Mayor Villaraigosa, in partnership with Councilmembers Garcetti and Englander, called for a revision of the existing tax structure to support the retention and growth of new car dealerships in Los Angeles.
Reforming the City’s gross receipts tax (commonly known as the City’s “business tax”) while remaining responsible to the City’s general fund has been a core component of Mayor Villaraigosa’s plan to create jobs in Los Angeles. This tax reform specifically targets new car dealerships due to their significant sales tax contributions to the City. In 2011, new car dealerships within the City of Los Angeles generated roughly six times more sales tax revenue for the City than they paid in business taxes.
“Ending the auto dealership business tax is smart policy that will pay dividends for years to come,” said Mayor Villaraigosa. “New dealerships mean new jobs for Angelenos and more revenue for our parks, libraries, and police officers.”
Los Angeles has lost 95 new car dealerships over the past 25 years, but with support from Mayor Villaraigosa’s Office of Economic and Business Policy that trend has reversed its course. Downtown LA’s “Auto Row” on Figueroa Street is now home to twice the number of new car dealerships as it was at the start of the Mayor’s term in 2005. KIA of Downtown is one of these new dealerships, and is projected to contribute over $400,000 in unencumbered sales tax revenue each year to the City’s general fund. Additionally, Kia of Downtown employs 50 people and is expected to hire an additional 15 in the coming years.
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Microlender Kiva Provides Capital for LA’s Small Businesses to Grow
Demonstrating his commitment to small business development in Los Angeles, in June Mayor Antonio Villaraigosa participated in the kickoff ceremony for Kiva City Los Angeles in Boyle Heights. Founded in 2005, Kiva is a non-profit organization that provides micro financing through an internet-based platform, offering anyone the chance to become a lender of as little as $25. This unique micro financing tool,will help bridge existing lending gaps in Los Angeles, helping some of the 325,000 small businesses in Los Angeles gain access to the capital they need to grow their businesses and create jobs.
“Many of our small businesses, despite solid business plans, lack access to critical capital to start or expand, “Mayor Villaraigosa said at the press conference. “And microloans are difficult to come by…because big banks aren’t willing to fund those small loans that many small businesses desperately need.””
Kiva is already making a difference in Los Angeles with loans ranging in size from $1,000 to $10,000. One beneficiary of Kiva’s services is Cafe 22, a small health food-oriented cafe. Kiva granted Café 22 a micro loan to hire an additional employee in order to make deliveries and to expand their operations. Another is Betty Paleteria, an ice cream manufacturer and distributor,.Kiva’s micro-loan has allowed Betty Paleteria to grow from one ice cream cart in 2004 to 80 small ice cream carts that sell their branded paletas.
The Valley Economic Development Center (VEDC) has been selected as the micro financing institution for KIVA Los Angeles. VEDC is a non-profit community development financial institution providing loans and important educational services for businesses. VEDC will utilize their extensive networks to identify potential borrowers in LA, post their profiles on Kiva, and also collect payments for Kiva lenders.
Potential lenders can visit www.kiva.org/losangeles and browse the small business owners’ profiles and then select the small businesses they want to support with a loan of $25 or more. After the loan is made, lenders can check the site to view monthly updates of how the borrower is paying back the loan (monthly payment amount, date paid, on-time, etc) in order to track their investment.
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LA Business Headlines
New Community Plan Improves Certainty for Hollywood Businesses and Residents
On June 26th, Mayor Antonio Villaraigosa signed the updated Hollywood Community Plan into law, one week after its unanimous adoption by the City Council.At the signing ceremony, Mayor Villaraigosa spoke to the role the plan will play in helping to spur economic development while simultaneously preserving the aspects of Hollywood that make it synonymous worldwide with the film, television, and music industries.
“This update is long overdue,” Mayor Villaraigosa stated. “The last time the Hollywood Community Plan was updated was 1988.The landscape has changed considerably since then, most notably with the opening of five metro rail stops and the revitalization of the central Hollywood commercial district. While the heart of Hollywood remains the same, this community must adapt to the needs of a growing population and a changing world where resources are increasingly scarce.”
Community plans are a cornerstone of the Mayor’s development reform efforts. The Hollywood Community Plan cuts red tape by updating land use regulations to reflect the reality of Hollywood today and the shared vision for the future. The plan supports the industries that are at the heart of the entertainment capital of the world by providing incentives that encourage retention, modernization, and expansion of entertainment studios and post-production facilities.
As a land-use document, the updated Hollywood Community Plan does not generate growth, but rather plans for growth by directing it to areas where that growth will be supported by infrastructure. The transit-oriented, mixed-use development called for in this plan will create lively, walkable communities and a vibrant Regional Center that will continue to attract residents, businesses, and tourists alike.
“We hear over and over again from the builder community that ambiguity and uncertainty hinders revitalization,” said Kerry Morrison, the executive director of the Hollywood Property Owners Alliance. “In this uncertain economy, providing more clarity about the plan for the future invites investment back in. And that means new jobs and more opportunities.”
Mayor Villaraigosa Commemorates Keyes’ European Facility
Mayor Antonio Villaraigosa attended a commemorative ceremony at the Keyes Automotive Group’s new Keyes European facility in Van Nuys on June 7, 2012.With continuous customer service support from the Mayor’s Office of Economic and Business Policy, Keyes European was able to open for business in a new environmentally-friendly facility.
Mayor Antonio Villaraigosa has made cutting red tape a focus of his administration so that Los Angeles businesses can grow and create new jobs. With the help of the Mayor’s Office, Keyes opened its new 225,000 square foot facility in time for the December 2011 holiday shopping season, achieving $26 million in sales in the first month of business. The Mayor’s Office coordinated the operations of numerous City departments including the Department of Planning, the Department of Building and Safety, the Department of Transportation, and the Bureau of Engineering so that the expansion could move smoothly through the City permitting and development process. This process has been significantly improved with the opening of the Development Services Case Management Office, where businesses receive one-on-one service navigating the City processes, and where City departments work together to resolve any conflicts.
“We are committed to making the process easier for businesses, like Keyes, to expand so that they can create more jobs,” said Mayor Villaraigosa. “We are changing the way Los Angeles does business so that it is easier to do business in Los Angeles.”
The Keyes Automotive Group (KAG) started with a single dealership in 1950, and since 1972 has expanded their operations throughout the Los Angeles region to include ten dealerships in the City of Los Angeles. The opening of Keyes European expands a business that supports over 750 jobs in the City of Los Angeles alone.
Funding Approved to Begin Comprehensive Code Overhaul
In May, the City Council voted unanimously to authorize $990,000 from special City funds to finance the first year of a five-year work program to revise the City’s antiquated zoning code. The City’s zoning code was last comprehensively revised 66 years ago, making it the second oldest in the United States, after only the City of Cleveland’s.
This zoning code overhaul will establish a brand new zoning structure that is clear, predictable, and legible to both laypeople and professionals. The revamped code will include a wide variety of zoning options to more effectively implement the goals and objectives of the City’s General Plan and accommodate the City’s future needs and development opportunities.
Zoning code reform is a critical element of the Mayor’s Development Reform initiative. The new code will create more zoning options that will better address community concerns and ultimately improve the quality of life in Los Angeles. The new code will also enable the Department of City Planning to shift more of its focus from case processing to more effective urban design and Community Plan implementation.
The funding strategy for this project will not produce new impacts on the City’s General Fund--a combination of annual allocations from the Construction Services Trust Fund and a temporary increase in the General Plan Maintenance Fee will generate all of the additional revenue required for the duration of this project.
Specialty Vehicle Manufacturer Grows Operations in Los Angeles
In June, Mayor Antonio Villaraigosa attended the grand opening of ICON’s new manufacturing facilities in Chatsworth. The ceremony also commemorated the luxury utitlity manufacturer’s 6th anniversary of building high-end utility vehicles in the City of Los Angeles.
ICON’s decision to stay and grow in the City of Los Angeles is the direct result of the Mayor’s efforts in working with the Governor’s Office in 2010 to expand State Enterprise Zones in the San Fernando Valley. These zones--now covering much of the City of Los Angeles--provide numerous incentives for businesses located within them. These incentives include: state employer hiring credits, reduced parking ratios for new development, and discounted LADWP electricity rates.
Despite a drop in overall manufacturing employment over the past thirty years, the City of Los Angeles is currently experiencing a growth in high-skill manufacturing. Since 1980, high-skill manufacturing jobs have increased by about 40 percent, highlighting the need for technical and specialized training among production workers to sustain Los Angeles’ competitive edge.
“There is a manufacturing revival in Los Angeles and we need to educate technically trained production workers to sustain and grow the higher-skill manufacturing jobs of today and tomorrow,” Mayor Villaraigosa said in his opening remarks at the ceremony.“Angelenos, working for LA companies make high quality products that we can sell on a global market.”
Jonathan and Jamie Ward founded ICON in 2006 with an interest, desire and passion to design and build luxury utility vehicles that married modern technology with retro-inspired design. ICON has since grown into a highly respected manufacturer of an array of exclusive handmade vehicles, consistently using locally based parts suppliers as well as hiring regional employees for development, engineering, and production.
ICON directly employs more than 24 local Los Angeles residents and plans to significantly expand that workforce in the coming years as demand for their vehicles continues to increase. Vehicles produced under the ICON nameplate include designs based on the famed FJ and most recently, the lauded Bronco, which won GQ magazine’s ‘Car of the Year’ award in 2011.
Craft Showcase Brings Artistic Energy to San Pedro Waterfront
In June, Deputy Mayor of Economic and Business Policy Matt Karatz spoke at a newly completed craft arts center at the Port of Los Angeles that has already become a regional destination for handcrafted goods.Known as Crafted at the Port of Los Angeles, this craft arts mecca is planned to become the nation’s largest permanent indoor crafts showcase center.
Individual market stalls at Crafted, located in a refurbished and re-purposed World War II-era warehouse, are set side by side to allow artisanal food makers, designers, and craft-artists to create a bustling intersection of art and commerce at the LA waterfront. Once all warehouse refurbishments at the site are complete, the complex will total 135,000 square feet of display space for local artisans.
“Under the leadership of Mayor Villaraigosa, Congresswoman Janice Hahn, and now Councilman Joe Buscaino,” Deputy Mayor Karatz said, “the Port is investing $1.2 billion in its waterfront to transform the waterfront from a derelict and defunct logistical nightmare into a world class tourist destination.”
Crafted at the Port of Los Angeles represents a large part of the Los Angeles Waterfront Project, an extensive public waterfront redevelopment project approved by City Council in 2009.With attractions like Crafted and the USS Iowa museum, the waterfront will attract new business and investment to the San Pedro community.
“But Crafted is more than just an attraction,” Deputy Mayor Karatz emphasized.“It is a showcase for one of our region’s greatest assets, our creative talent.LA is where the world creates and innovates. The Creative Economy in LA which includes the entertainment industry, digital media, architecture, interior design, art galleries, is an over $200 billion dollar industry.”
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