Category Archives: City of Los Angeles

A Post Mortem on Measure S

In the aftermath of Measure S, it seems everyone is offering their post mortem observations about this giant struggle over land-use and development in Los Angeles. I’d like to add my “two cents”.

First, the voters made the right choice in sinking Measure S.  We can breathe a sigh of relief that a blanket moratorium did not go into effect that would have vaporized thousands of construction jobs and wreaked havoc on our economy. Now we can continue to address the serious shortfall in housing in our region.

Second, although the voters rejected Measure S, it was not a vote of support for the status quo. Far from it. Both residents and businesses made it clear that the current system is broken and needs to be fixed.

Third, the Mayor and City Council need to follow through on the reforms that were promised, among which were to update community plans in a timely fashion and to have the Planning Department select the consultants performing environmental impact reports.

Fourth, once community plans are updated, “spot zoning” (changing land-use rules to accommodate specific projects) should become the exception rather than the rule in approving projects. It would be helpful if criteria could be drawn up that explains when it is appropriate to grant an exception.

Fifth, greater transparency should occur throughout the entire process, so that trust can be established with the public. One particular area that needs improvement is with community benefits packages. The Planning Department and councilmembers now negotiate these packages, sometimes extracting millions of dollars from developers for projects that will benefit L.A. This process needs to be revised so that the public has more of an opportunity to provide suggestions on things that would benefit the impacted neighborhoods. And once a package is finalized and the developer hands over to the City mitigation funds, there needs to be accountability so that the public knows to which department the funds went and that they were spent according to the plan.

An example may help. When the Hollywood & Highland complex was built back in 1988, the City negotiated a contribution from the developer for more than $9-million to be spent on traffic improvements, etc. Years afterward, when I tried to find out if the money had been spent, I could get no answer. Yet, more than 10 years after the project was completed, I saw a motion before the City Council approving the expenditure of some of the mitigation money from that project. I am not implying that anything was done incorrectly. What I am saying is that the system was not set up for transparency with the public.

With today’s technology, there is no reason that a tracking system cannot be set up on a City website that easily allows the public to see what the community benefits packages are for each project and to track the expenditures of those funds as they occur. This is an issue of trust. If the public can see that these funds are truly going to benefit them and are actually being spent on the purposes intended, it will help to instill trust in the system.

Finally, in my conversations with neighborhood councils, one of their largest concerns is with evictions that are taking place to make way for some new projects. Most of these evictions are occurring with rent-controlled buildings and by-right projects. With the affordable housing crisis, some tenants are losing their homes with no place to go. The city needs to review its current policy to strike a balance between property rights and fairness for those being evicted. It is a complicated issue with no easy answers because of conflicting state and local laws, but the conversation needs to occur.

The voters have indicated by large margins in the last two elections that they understand the need to “densify” our City rather than to continue expanding outward. That is the proper course of action, but it is not easy to achieve. The Hollywood Community Plan update will be coming back later this year for reconsideration. Stakeholders will have ample opportunity for public input into the process. With all of the development and changes occurring in Hollywood, we really need to have an updated plan rather than operating under one that dates back to 1988. Let’s have the discussion necessary to adopt a plan that will move this community forward and which will help to reestablish trust in our land-use process.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 24 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood.

 

A Few Observations about Measure S

 

With only two weeks to go until the election, there has been a lot of “ink” written on the topic of Measure S. You’ve heard the statistics about how this measure is going to cost our economy $1.9-billion and 12,000 jobs for each year it is in place. You’ve heard about its devastating impact on affordable housing, especially in light of the passage of Measure HHH to build permanent supportive housing that Measure S would make difficult to build. And you have heard the claims of the proponents that only five percent of the proposed construction within the City will be impacted.

With the debate drawing to a close, I would like to share a few of my final observations. Here are my thoughts:

  1. The idea for this initiative sprang from a small group of activists in Hollywood, who were not able to stop development here, and thought they would have a better chance by enacting a citywide moratorium. They have cloaked their real intent under the cover of popular terms such as “updating community plans” and “ending spot zoning”. They continue to minimize the impact of this measure (far below what real studies have shown). In reality, their goal is not to update community plans, but to stop all significant development that adds traffic near their homes.
  2. Almost everyone agrees that the City of Los Angeles project approval process leaves much to be desired and needs reform. The one positive result of the initiative is that it spurred the City Council to vote on February 8th to update L.A.’s 35 community plans every six years, which is realistically about as fast as the City can move in updating all of its plans. That vote has triggered creation of a new ordinance that will mandate these updates. If the ballot measure sponsors really cared about updating the plans, they would declare “victory” at this point and move on. The fact that they haven’t done so, tells you that they really have another agenda.
  3. The proponents of Measure S are disingenuous when they say that the moratorium will only last for two years. They know that it is impossible for the City to update all of its plans within that timeframe. They also know that there will be lawsuits challenging the approval of new updated community plans, which will prevent their implementation. It has now been five years since the Hollywood Community Plan Update was approved and then blocked by a lawsuit. We are still waiting for it to be reconsidered. This is a good example of what is in store if this measure passes. Voters need to understand that the moratorium likely will be in effect for years.
  4. In an ideal world, no exceptions would be granted to zoning rules. However, in the real world, that is not possible for various reasons. There are cases where spot zoning is needed, and where it demonstrably is a good thing. Probably the best example in Hollywood is our beautiful new Emerson College campus on Sunset Blvd., which has won numerous design awards. Under the previous zoning, about all that could have been built on the site was a hamburger stand. I don’t think anyone would argue that a hamburger stand was a better usage for that site. Until such time as community plans are updated to reflect today’s circumstances, there is a need to allow legislative bodies to exercise judgment to consider the issues in addressing development at specific locations. And, even after a plan is adopted, there is a need for flexibility. Changing circumstances, new opportunities that may never have been contemplated, or mistakes in classification require some flexibility in allowing exceptions. Granting exceptions to the rules should be infrequent, but blanket prohibitions of “spot zoning” without considering real life situations are not in the public’s best interests.
  5. Measure S is really a case of “the haves” versus “the have nots”. If you already own a home and don’t care about the larger community’s interests, then you may be inclined to vote for Measure S, but if you truly care about those who are just getting started in L.A. or who are forced to commute in from outlying regions, then this measure is not for you. Last fall I spoke with Councilmember Nury Martinez, who represents the 6th District, stretching from Van Nuys to Panorama City. She said it is a challenge to bring development into her district and that the Measure S moratorium would harm her efforts to do so. Her concerns are echoed in many communities across this great city. Other than Hollywood, Koreatown and Downtown L.A., most areas of L.A. are not seeing a great deal of new development. Many communities want and need development. As I have said before, developers are not the enemy. They are the ones who help to revitalize older neighborhoods. Our opponents forget how bad Hollywood was 20 years ago. It has been primarily through new development that we have been able to turn this historic film capital around. Where you see no new development is where you most often see communities in a state of decline. Measure S will perpetuate that problem and make it more difficult to revitalize communities.
  6. Measure S is about the future of Los Angeles. I remain convinced that one of the main goals of the proponents of this measure is to stop the addition of density near mass transit centers. The Palladium Residences project that seems to have been the genesis of Measure S (at least for the largest contributor to their campaign), is only one block from a subway station. Opponents of that project do not want density near transit centers, and yet they have suggested no alternative. The horizontal city model with connecting freeways may have worked when we had three million residents in this county, but it does not work when we have 10 million residents. In city after city, we have successful models on how development has been focused along mass transit lines in order to avoid increasing congestion elsewhere. That has also been the plan for Los Angeles. With the passage of Measure M last November, we have an opportunity to truly accommodate growth and new residents in a logical fashion. To not allow density where it makes the most sense will create future chaos for this region. It will result in a lot of housing and businesses moving outside Los Angeles, and it will force many new residents into peripheral areas, only worsening commute times. We cannot go back to the 1950s.

I add my voice to those who say that Measure S is the wrong remedy for Los Angeles. Now that the City Council has committed to regularly updating community plans, our energy would be much better spent on seeing that we get visionary, well-thought out plans adopted for each area of our city. Let’s work to see that good developments are added along future and existing mass transit lines, and that they contribute to making this a more livable city. That way, we will all be winners.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 24 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood.

Keep the Momentum Going in 2017

As we begin 2017, I am optimistic about our future prospects in Los Angeles and Hollywood. When it comes to jobs, Los Angeles County has been moving in the right direction. In 2016, employment grew by 65,300 jobs and the unemployment rate declined to 5.1 percent.

Here in Hollywood, the news on the jobs front is also positive. Viacom has begun moving into its new home in Columbia Square and Netflix will be moving into the new Icon tower at Sunset-Bronson Studios within the next month. Netflix announced a week ago that they will take an additional 92,000-sq.ft. of office space at their new Hollywood home, bringing their total to more than 400,000-sq.ft. on that campus. Between these two companies, another 1,500 jobs will be added to the Hollywood market. These are good jobs that will provide opportunities for Hollywood residents and ancillary businesses.

Other positive prospects in Hollywood at the beginning of the year include the opening soon of two hotels – the Dream Hotel (which includes several restaurants) on Selma Avenue, and the Hampton Inn on Vine Street. Between them, about 300 hotel rooms will be added to the market and they will provide hundreds of jobs.

Later this year, we should see the completion of J.H. Snyder’s 1601 Vine Street office building and the Kimpton Hotel. There may also be a few additional ground breakings this year – provided Angelinos do not approve the ill-advised Measure S.

For the past year, we have debated this initiative that would place a two-year moratorium on significant building within Los Angeles – singlehandedly killing jobs, housing and reasonable growth in our city. The vote on this measure is coming up on March 7th.

Proponents say their measure will force the City to update community plans and to outlaw “spot zoning” and that it should only last two years. In actuality, it is much more complicated than that. Among the proponents are some of the people who sued to invalidate the Hollywood Community Plan Update in 2012.  Thanks to their efforts, the community is forced to operate under an antiquated plan that was adopted in 1988. What are the chances that any new community plan approved by the city will go into effect without a lawsuit challenging it?  In reality, the moratorium called for by Measure S could last for years under such a scenario.

L.A. city and county residents this past November overwhelmingly voted for reasonable growth. They passed Measure M, which will generate $860-million a year to accelerate the construction of a working mass transit system for this region. L.A. city voters also passed Measure HHH, a $1.2-billion bond to build housing for the homeless.

The passage of Measure S could put the brakes on plans to add density around mass transit stations and it could also make it very difficult to build housing not only for the homeless, but housing for anyone in Los Angeles. It would also apply to needed public improvements such as expansion of hospitals, etc.

I am indeed an optimist, and believe that voters will reject a measure that makes it difficult to implement the objectives that they just approved in November. However, it behooves all of us to do our part in educating our friends and neighbors about the negative ramifications of Measure S and to get out the vote!

L.A. is moving in the right direction on jobs. We need to continue that momentum. With the defeat of Measure S, I am convinced this will be another positive year for L.A. on the jobs front. Let’s make it happen.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 24 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood.

Thoughts on the Passage of L.A. Infrastructure Measures

Los Angeles County citizens sent a strong message on November 8th that they support infrastructure development. They committed to a permanent sales tax increase to accelerate the expansion of our mass transit system by passing Measure M.

The annual $860-million that will be generated means that Los Angeles will finally get a system that takes people where they want and need to go. For Hollywood, it means there will be a direct light rail link between LAX and the county’s top tourist destination. And, there will be better linkages to other areas of the county as well.

The funding is expected to generate about 465,000 jobs across the region, which will be a significant economic boost to our area.

While Measure M will not eliminate congestion, it will indeed make a difference. People who don’t want to be stuck in traffic will have alternatives. It validates the strategy that regional and local planners have espoused for decades to encourage density near transit hubs. That strategy’s success is very visible here in Hollywood where thousands of new units have been built and occupied by young professionals, near Metro transit stations. That, in turn has attracted major companies like Netflix and Viacom, who are bringing thousands of jobs that will propel our revitalization forward.

Voters were also very interested in housing issues, with the passage of measures HHH and JJJ. Measure HHH is a $1.2-billion bond to build housing for the homeless. Measure JJJ adds a requirement for developers to include affordable housing in their projects. The Chamber did not endorse JJJ because its prevailing wage provisions will also raise the costs of construction by as much as 30 percent. However, its passage, as well as the approval of HHH, shows that voters are interested in funding affordable housing, addressing homeless issues and expanding mass transit.

The passage of these measures runs counter to the goals of the so-called Neighborhood Integrity Initiative (NII), which we will be voting on in less than four months. This no-growth initiative would suppress the development of housing due to its draconian building moratorium. It is targeted at decreasing density around mass transit, which runs opposite of what the electorate has just approved. Their solution to congestion is a two-year building moratorium. The voters, meanwhile have said that they want expanded mass transit and housing.

Hopefully, voters will send a strong message next March that we are going to stay the course by building needed housing and locating it where it makes the most sense – near mass transit lines. I believe most voters will agree that is where density should go, rather than spreading it across the entire region and creating more congestion everywhere.  We have a lot of work to do to educate the public about the NII measure’s adverse impacts, but the recent voter-approved measures give us an indication of how the electorate is thinking on issues like this. I feel confident that voters will reject NII. Help spread the word!

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 24 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood.

What is the Value of a Job – Close to Home?

The California Legislative Analyst’s Office (LAO) released a study in September (California’s First Film Tax Credit Program) that for the first time, offers an assessment of the economic and fiscal impact of the filming incentives that the State of California approved for our entertainment industry. This is particularly interesting because the LAO is the nonpartisan fiscal and policy advisor to the state legislature, which means we should be able to rely on the veracity of their report.

The study zeroes in on the tax incentives that were first adopted in 2009 which provided a total of $800-million in incentives spread over eight years at $100-million per year. The LAO did not evaluate the more recent incentives (AB1839) that were passed in 2014 and raised the subsidy to $330-million a year. That report will come in a couple of years. Why should we care about what the LOA says? Because when it comes time to renew the film incentives, the LOA’s report will likely carry a lot of weight with legislators!

Unless you are a policy wonk, you are unlikely to wade through this report, so let me share with you some of the most interesting data in the report.

The LOA estimated that the $800-million in tax credits went to productions that will spend an estimated $6.1-billion in California over the life of the first film tax program. They estimate that the “economic output of California was increased by between $6-billion and $10-billion on net over a period of more than a decade.” I wonder how many other investments by the state of California have resulted in numbers like this? That is money that went to buying goods and services and payroll for thousands of Californians.

What is particularly interesting is how much this new spending generated in tax dollars for state and local jurisdictions that would otherwise not have happened. The LAO estimates that the increase to State General Fund revenues amounted to between $300 and $500-million (not adjusted for inflation) and that the bulk of this increased revenue came in the form of state personal income taxes. Not only that, but they estimate that local tax revenues increased by roughly $200-million over the life of the program.

So, to summarize, the LAO is saying that on the low end State and local jurisdictions received $500-million in new taxes and on the high-end as much as $700-million in new revenues on an investment by the State of $800-million. This means that the net cost to the State was between $100 and $300-million. We haven’t yet seen any studies that estimate how many jobs have been saved, but conservatively it numbers in the thousands. These are the jobs of Californians, who previously were forced to leave the State to find work.

Paul Audley, the President of FilmL.A., Inc., tells me that prior to the passage of the 2009 tax credit, the L.A. region was losing key productions at an alarming rate. The worst quarter on record occurred immediately prior to the implementation of the tax credit. He added that with the enactment of AB1839 in 2014, California has regained ground and stabilized the vendor and crew base, and that currently, 25 percent of TV production and 10-percent of feature film production in L.A. is due to the tax credit program.

The LAO generally advises policy makers against tax expenditure programs, but in this case said that it was “understandable to defend a flagship industry targeted by other states” and that the credits “can be viewed as ways to ‘level the playing field’ to counter financial incentives to locate productions outside of California.”

If the State had not offered the incentives, it was on the way to losing its signature industry. Was this a good investment by the State? I think most Californians would say “absolutely.” Where else could the legislature have invested $800-million in economic development and seen income tax revenues coming back to the State of as much as $500-million with an economic stimulus as high as $10-billion?

But behind the numbers is a more important fact. California families were being separated for long periods of time since so many were forced to follow productions out of state if they wanted to work. We have heard from hundreds of people who are grateful to our public officials for enacting this program that has allowed them to return home to work. And that is a number to which you cannot attach a price tag.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 24 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood.

Case Study Reveals Downside of Minimum Wage Hikes

Los Angeles and California embarked on an unprecedented experiment this past year, when both voted to phase in a $15-minimum wage over a period of years. In L.A., the rate will reach $15 in 2020 for businesses with 26 employees or more and in 2021 for smaller businesses. In California, the $15 rate will be achieved in 2021, making it the highest state minimum wage in the nation.

Business concerns were minimized by both the City Council and the State legislature, who believed that adverse impacts would be minimal. There will be a lot of interest over the next few years to see whether businesses were playing “chicken little” in complaining about the anticipated impact to their businesses and if the economy can absorb these increases with minimal disruption.

While it may take a while to measure the impact of the general $15 minimum wage, there is a more immediate gauge that might indicate whether we need to worry. In 2014, a year prior to the wage vote that was applied to all businesses, the City Council approved a dramatic increase in the minimum wage for nonunion hotels with 300 rooms or more – raising the wage from $9 an hour to $15.37 an hour beginning in July 2015. For hotels with between 150 and 299 rooms, the increase was delayed a year to July 1, 2016. It was a jump of 70.7-percent all at once. This unprecedented increase affected only certain hotels and included all tipped and non-tipped employees.

In Hollywood, only the Hollywood Roosevelt Hotel was impacted by the increase in 2015. So I thought it might be interesting to ask the hotel how it is coping with the minimum wage increase. I spoke with Brett Blass, the Chief Operating Officer (COO) for Journal Hotels, the hotel’s management company. Let me share with you what I learned.

Blass told me that the minimum wage increase has cost the hotel almost $3-million annually – a significant bite to its bottom line. Unlike some government entities, businesses must operate in the black if they are to survive, and so the hotel was forced to take action to cut costs.

Especially of concern to Blass is that the ordinance did not include hotels with which the Roosevelt competes for customers, eliminating a ‘fair and level playing field’ amongst the hotel competitive landscape. “It is impossible to fairly compete when operating a hotel bar, restaurant or the hotel itself when singled out by government wage mandates such as this,” he emphasized. “A hotel can’t just raise all prices, as pricing is marketplace driven.”

The hotel chose to close one of its three restaurants for lunch, Public Kitchen & Bar, resulting in the loss of 10 jobs. “Restaurant margins are not high to begin with,” Blass pointed out. “By increasing tipped wages so much, we found margins at an all-time low or in the red completely.”

Over time, between 30 and 40 full-time positions were eliminated, about 8- percent of the hotel’s total staff. (This job loss is in line with the experience of hotels in proximity to Los Angeles International Airport that were impacted by a similar City-imposed increase a few years before.) In addition, several planned new jobs were put on hold.

Besides this, numerous employees had their hours more closely scrutinized or cut – especially tipped workers in the restaurants. When the increase is applied to tipped workers, the overtime pay becomes astronomical for a business to pay. Overtime is calculated not just on the $15.37 an hour wage, but also on the tipped wages. With the new minimum wage and tips, waiters are earning between $60 and $70 an hour at the Roosevelt, according to Blass. Add in overtime at time-and-a half, and you get the picture. A business cannot afford to have an employee work more than eight hours and so time is reduced to ensure that an employee does not exceed that amount.

The minimum wage hike caused “bleed-up” to happen as well, according to Blass. The hotel had to raise their managers’ pay to keep them above the minimum wage employees.

“We had planned greater annual raises for many of the non-tipped work force,” reflected Blass, “but had to stick to the minimum wage increase only because of the massive and immediate increase to the tipped wage. About 35-percent of the total hotel staff are tipped, so those folks taking home tips every day got the biggest minimum wage lift.”

He also noted that the hotel just completed $22-million in guest room renovations, which would probably have been considered differently had the annual wage increase been known at the time of construction planning.

So, there you have it – a case study showing the actual impact of a minimum wage hike. Now, I’m sure the hotel employees who received increases were very happy, but I wonder what happened to the 8-percent who lost their jobs? Perhaps they found employment at other hotels covered by the wage hike, but if the cutbacks experienced at the Roosevelt are an indication, I doubt it.

I realize that there is a difference between a one-time wage-jump of 70.7-percent versus a phased-in increase, but there is still a lot of good information we can glean from this case study. There are important questions that experts should analyze, such as how many new jobs will not be created by businesses coping with their increased overhead costs, and how much investment in their businesses will not occur since the money is not there. Such investment would create other jobs within the economy that now might not happen.

I wonder how much prices are going to rise over the next few years as the wage hikes work their way through the economy, and how much this is going to cost all of us. I wonder how many employees are going to lose their jobs and what efficiencies businesses will implement to reduce their overhead.

As we stated at the hearings, no one was arguing that an increase in the minimum wage was not warranted. However, based on the Roosevelt experience, I believe more caution and restraint would have been the wiser course. Now we wait to see how this plays out, and hope for the best.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 24 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood

Master Plan Is Of Paramount Importance

Last week, the City held a public hearing on the proposed 25-year Master Plan for Paramount Pictures. This storied studio, which dates back to 1912, is the last remaining major studio located in Hollywood proper. Warner Bros., Columbia, Fox and Disney got their start here, but all moved out many decades ago. As hearings go, this one was cordial. Even those who had issues were on their best behavior. Everyone understands how important Paramount is to our community.

As Chamber President & CEO, I pointed out how critical Paramount is from a jobs standpoint. With 5,000 people employed on the lot on an average day, Paramount is our jobs anchor in South Hollywood. That is important to our economy because there are numerous ancillary jobs nearby that depend on Paramount – whether a restaurant or prop house or catering truck.

These are by and large middle income jobs. And that is important in Los Angeles – which is the most expensive city in the nation on an income to housing costs basis. It costs a lot to live here. With sharp declines in the aerospace and manufacturing sectors since the 1990s, it is vital that we grow our homegrown entertainment industry.

When you consider that there are only about 200 acres in all of Hollywood that are industrially zoned, it means that we must maximize the jobs on the industrial land that we do have. And Paramount occupies 56 acres, plus an adjacent six acres used primarily for parking. That is more than a quarter of our entire industrially-zoned land.

In order for Paramount to survive in the very competitive entertainment sector, it must be able to expand to take advantage of opportunities as they arise. It was pointed out at the hearing that Paramount is the last of the major studios to update its master plan. That provides them with the perspective to see what their competitors are doing.

It also clearly delineates why they need to plan for technologically advanced sound stages with adjacent production offices, new climate control and lighting systems. It explains why they will need high-tech post production facilities, and adequate parking. It demonstrates why upgraded employee amenities are planned. It is all about competition.

Over the next 25 years, under the proposed plan, Paramount will invest $700-million with a $1.1-billion economic output during construction, which will generate 7,300 construction jobs. However, for me the more important figure is the number of permanent jobs that will be accommodated on the lot once the plan is fully implemented – 12,600 jobs with $3.1-billion in annual economic output. Those are jobs that will enable employees to truly have a “living wage”. Those are jobs that many of our children will occupy.

A year ago, the State of California approved AB1839, which vastly increased funding to compete for entertainment jobs, and to bring them back from other states, due to their film tax credit program. In the subsequent year, we have seen just how successful the program has been. We now have a chance to grow this industry once more – and we must, if we are to demonstrate to the State that their investment was worthwhile.

What I heard at the hearing were typical concerns – traffic, the height of some buildings, making parking structures attractive, the preservation of historic resources, signage. These are issues that I’m sure will be addressed by Paramount as it moves forward with its plan. I did not hear any issues that were insurmountable. We encourage the City to approve a reasonable plan for Paramount and for our community. We all have a stake in Paramount’s future.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 24 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood

Closure of Cashmere Sends Proper Message

Two weeks ago, the Los Angeles City Council took action affirming the Department of City Planning’s decision to revoke a Conditional Use Permit (CUP) for the Cashmere nightclub in Hollywood for multiple land use violations. The Hollywood Chamber of Commerce applauds the action by the Council and the efforts of Councilmember Mitch O’Farrell.

Let me explain why the Chamber supports this action.

When an applicant seeks a CUP to open a club, the City establishes rules under which that club must operate. Those rules are set to protect the public – those who would visit the club as well as nearby residents and businesses. The types of rules that are set may include hours of operation, age restrictions, alcohol and food sales, capacity, and security requirements, among other things.

Over the years, there has been lax enforcement of CUPs. The Hollywood Chamber has been concerned for years about this and has urged proper enforcement. We were encouraged when the Planning Department set up its Conditional Compliance Unit a couple of years ago. We believed it was a step in the right direction. But progress has seemed to be painstakingly slow.

In the particular case of Cashmere, it had been the focus of numerous investigations by the LAPD over an extended period of time. Last August, a 20-year old male DJ died while employed at the nightclub. In another incident in 2014, investigators say a female college student was sexually assaulted at the club. Such incidents and investigations should have sent a message to the operator that steps needed to be taken to address the issues.

However, adequate measures were not taken. If an operator does not think there will be adequate enforcement, it can encourage some to flaunt the rules, which may have been the case here. The fact that the City has stepped in and taken the serious step to revoke the CUP sends a very strong message to those who don’t want to follow the rules. Without a CUP, the business is unable to continue operating.

Hollywood’s nightclubs are an essential component of our revitalization program. In the 1990s when things looked bleak as far as redevelopment, the clubs brought hope to the community. Early pioneers such as The Garden of Eden, Beauty Bar, Sunset Room and Deep helped to bring patrons to Hollywood. The clubs liked the edginess of Hollywood. Their success brought additional venues and Hollywood established a reputation as a nighttime hotspot.

A lot has transpired since those days as we have seen the revitalization of Hollywood take hold. Today, we see new retail, mixed-use residential projects, office space and hotels under construction.

While the clubs are no longer the backbone of the revitalization effort, they are still important. We have some great venues, which help us to provide nighttime entertainment. Most operators are outstanding, doing their best to adhere to their CUPs.

When the City clamps down on those who continually break the rules, it helps to establish the parameters for operating in Hollywood and it supports those clubs that do follow the rules.

Councilmember O’Farrell and the City took the right action in the case of Cashmere. While we hate to see any business close, we believe the message that was sent is good for Hollywood, good for our residents and visitors, and good for business.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 24 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood

Why it is thumbs down on Neighborhood Initiative

By now, you may have heard of a new anti-growth effort, the Neighborhood Integrity Initiative, being promoted by a group called the Coalition to Preserve L.A. The initiative would impose harsh restrictions on projects that require major changes to city planning rules – including putting a moratorium of up to 24 months on development projects that cannot be built without votes from elected officials to increase density. It would make it difficult to change the L.A. General Plan for individual real estate projects. It would place City employees directly in charge of preparation of environmental review of major projects. It would require the City Planning Commission to update the City’s community plans to be consistent with the City’s General Plan – even though these initiative supporters often fight any effort to update the community plans.

Let me say the obvious – that the goal of the initiative proponents is to stop any significant development within the City of Los Angeles. They claim that their initiative “will preserve the character of neighborhoods throughout the City of Los Angeles and improve the overall quality of life for city residents.” In actuality, it will worsen the quality of life for city residents – as there will be fewer jobs, higher housing prices, and more congestion.

In order to justify radical initiatives like this one, the proponents always paint City officials as inept and developers as villains out to make a buck and destroy the character of neighborhoods. They never want to discuss the reasons behind the City’s actions or where growth should occur. They have no solutions. They merely want to turn the clock back fifty years to the Los Angeles of another time.

The problem is that you cannot go back. Los Angeles is the least affordable place to lease or buy a home in the nation and has had the biggest housing price increase over the past 15 years in the U.S., primarily because it is so difficult to build anything here. One of the reasons why we have so much gridlock is because of people who over the years have refused to consider smart growth solutions that have been implemented in cities around the globe.

The Los Angeles metropolitan area has reached its physical limits. We cannot keep growing outward and forcing people to commute vast distances. We should not allow the interior areas of the City to deteriorate in order to “preserve” neighborhoods. We should not prevent affordable housing from being built in our city.

Smart growth advocates and planners will tell you that the successful planning model is to direct growth to occur along transit corridors. As our mass transit system is built-out, it will eventually enable people to travel where they need to go without using their vehicles. We are then able to preserve those single-family neighborhoods that are so valued by the initiative proponents. (This used to be referred to as the two-percent solution – to direct development onto two-percent of the land in order to preserve 98 percent of the land.)

Opponents argue that the mass transit system is not yet built-out and that we should wait until that occurs before we build around mass transit stations. However, if we wait, traffic will continue to worsen for everyone because housing and jobs will be built in places that only add to congestion.

They also argue that it is impossible to build new projects without creating more traffic. They are correct that there will be some additional traffic. However, by matters of degrees, the increase in traffic will be substantially less due to the nearby transit, and because jobs will also locate close to these stations. There are currently five mass transit lines under construction by Metro in greater Los Angeles – that is more than any place else in the nation. As these lines come into operation, it will be easier to see the wisdom of guiding development to transit corridors.

Hollywood is the poster child for those opposing development. They point to the 70 or so projects in the pipeline and argue that development will destroy the quality of life and the character of Hollywood. In my view, exactly the opposite is occurring. We are creating a great example of how urban development should happen – with walkable neighborhoods and jobs, shopping, and entertainment close by. Opponents seem to forget how bad things were in Hollywood 20 years ago. What has turned central Hollywood around is the new development. And this development is occurring in the center of Hollywood, close to mass transit. Parking lots are being replaced by exciting new development that make it an attractive neighborhood.

New development has made it possible to preserve historic structures. About 15 years ago, I was visited by representatives of the Los Angeles Conservancy who were concerned about the possible loss of two very historic properties – Columbia Square and the Palladium. Today, because of new development, both of those historic venues are saved and will again be show places.

I was recently told the story of a local resident whose children have moved to the East Coast with no intention of moving back to L.A. Why? Because they are tired of living in an urban area where it is impossible to get by unless you use a car and are stuck in traffic gridlock. Passage of this initiative will only perpetuate that ineffective and outdated model.

So I ask the proponents of this initiative to tell us exactly where they think development should occur. They have no answer to that question. And until they can answer it, then this initiative should be given no credence. If you like the current gridlock in L.A., it will never change with their plan. Their solution to go backwards is no solution at all. They would merely be preserving a model that we already know no longer works.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 23 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood

City Sets Priority to Create Jobs

Last week, the first meeting was held of the L.A. City Council’s new Ad Hoc On Comprehensive Job Creation Plan Committee. I attended and offered our Chamber’s strong support for their efforts. It is extremely critical to the future of our City that the City Council act to jumpstart the creation of jobs.

Committee Chair Paul Krekorian said “This is going to be a committee that takes action and makes recommendations to the Council. This is the biggest priority we have as a city. It will impact our ability to maintain a high quality of life for our residents.”

Dr. Christine Cooper from the L.A. Economic Development Corporation presented an overview of the opportunities and challenges that we face. She noted that L.A. unemployment has consistently been higher than at the county, state and national levels.

She wasn’t exaggerating. Since 1990, jobs in the U.S. have increased by 29 percent and by 28 percent in California. In Los Angeles, by contrast, the number of payroll jobs has increased only by 2 percent during the same period, according to the UCLA Anderson Forecast.

So the Ad Hoc Committee has a challenging assignment. We hope they will move quickly. Already, they have passed a motion directing various City agencies to report back with recommendations on a comprehensive job creation plan.

I’m sure there will be ample opportunity for input from the public as well. Let me offer a few suggestions. First, the City cannot create a jobs strategy without addressing the biggest drag on jobs creation in the City – the job-killing Los Angeles Gross Receipts tax. This is the highest business tax in the county by a factor of 9.5 times the average of the other 87 Los Angeles County cities.

The City has made small efforts to trim back the tax, but much more is needed. Over the next three years, the tax will be reduced by 5 percent a year. Assuming the City Council approves continuing reductions at that rate, it would take 20 years to do away with that tax – not enough to jumpstart jobs creation.

It is a challenge for the City Council to eliminate this tax, because it generates some 10 percent of City receipts. Facing an ongoing structural deficit, it takes a leap of faith to do away with it altogether and the City Council has been reluctant to do so. But maybe there are other alternatives that could be considered – such as reducing it initially to the countywide average for all cities so that we are not placed at a competitive disadvantage? Perhaps, the City could study alternative taxes that wouldn’t have the same negative impact on jobs creation? If the City wishes to be a competitive player in jobs creation, then it has to be a competitive player when it comes to the cost of doing business – and taxes are a big consideration for many firms.

The City should also look at where jobs are being created and see how they could facilitate that growth. Currently, Hollywood and Playa Vista are the biggest job creation engines within the City. With more than one-million sq.ft. of office construction underway, Hollywood has the potential to create thousands of new jobs. Already, Viacom, Netflix, Neuehouse, SIM Digital and others have announced they are coming to Hollywood. Other projects are in the pipeline and could be expedited if the City put the Hollywood Community Plan on the fast track to being reconsidered and implemented.

There are many other things that could be done, such as structuring an incentive package to encourage hotels to be built in all areas of the city – not just downtown by the Convention Center (which is the practical result of a plan that was presented earlier this year). The City could streamline the process that business owners and start-ups have to go through to get permits to expand or to open a business.

If you have ideas on what the City could do, send them my way and we will pass them on to the City. Better yet, plan to attend the ad hoc committee’s hearings! We will post them on our website as soon as we are aware that they have been scheduled. This may be a unique opportunity to move our city forward. Let’s all work to help the City craft a package that will really make a difference.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 23 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood.