Category Archives: Community

City of Los Angeles, Community, Hollywood

Thinking BIG About the Hollywood Sign

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This past summer our family visited Switzerland and northern Italy. During the trip, we had numerous opportunities to ride their amazing transit systems, including several aerial trams. Because of the interest in building an aerial tram to the Hollywood Sign, I was particularly interested in how these facilities operated, and I was impressed. Not only were these aerial trams able to move a large number of people quickly to otherwise inaccessible spots, but they were able to do it with very little impact on the environment. Only a few towers to hold the cables were required, as well as stations at the beginning and end of each line. Despite moving a lot of people, the areas surrounding the stations were also well maintained with little obvious impact from the visitors to the area.

We have searched for years to find a solution for the neighborhoods below the Hollywood Sign that have been inundated with tourists since the advent of automobile navigation systems and Waze. It is my belief that if tourists were offered an attractive alternative way to reach the Hollywood Sign, they would take it. An aerial tram offers an experience that I believe would have a real impact on reducing traffic in those neighborhoods.

The City seems to agree with my assessment. A report issued earlier this summer by the Chief Legislative Analyst and Recreation and Parks Department stated:
“Recreation and Parks strongly believes that this strategy would have the most impact on visitor behavior to both Griffith Park and the Hollywood Sign. If done correctly, this could potentially eliminate traffic from the western side of Griffith Park, areas that include Bronson Canyon, North Beachwood Canyon, Lake Hollywood Drive and Vermont Canyon.”

Although suggestions to install an aerial tram to the top of Mt. Lee date back as far as 1905, people never really considered it to be a serious option until recently. Many thought it was “pie-in-the sky” and could never be financially viable. Now, however, the City has received a concrete proposal from Warner Bros to access the Sign from their parking garage along Forest Lawn Drive, and we know that there are other people interested as well. This week, the L.A. Arts, Entertainment, Parks & River Committee approved and forwarded to the City Council a recommendation to begin a feasibility study of an aerial tram. Suddenly, what many thought was a pipedream looks like it really could become a reality. The City report stated: “Implementation of this option is feasible, but will require environmental clearances, the design and installation of a potentially complex transit system, identification of a vendor to operate the system, and the establishment of start and end points for the system.”

Here are a few things I discovered by surfing the internet. Aerial trams, which are technically known as aerial ropeways, have been around for centuries. In ancient India and Japan, the ropeways were used to cross rivers and were originally made of hemp or rawhide rope. Now they are made from steel cables and towers, but their function is not much different from these original ancient transportation systems. The first ropeways in the U.S. were used for transporting materials to and from mines in the West and were first introduced in 1868.

Today, most of the ropeways in the U.S. are ski lifts. They have rarely been used in urban settings. However, there are three successful applications that can be used as examples – in New York City, Portland, Oregon; and in Telluride, Colorado.

A study by West Virginia University (WVU) concluded that ropeways have seldom been used in urban settings, primarily because engineers are generally not familiar with ropeway technology and specifications. The study concluded that engineers tend to exclude aerial ropeways as an alternative even though there may be advantages in certain applications.

The Hollywood Sign may be one of those possible applications. Bringing an aerial tramway to the Sign is not going to happen overnight – and it shouldn’t. There needs to be a vetting process involving the community and neighborhoods, environmental interests and City departments, and that will take time. But isn’t it great to see that our leaders are thinking big to try and resolve some of the seemingly intractable issues concerning access to our City’s greatest landmark? Special congratulations to Councilmember David Ryu for his leadership on this effort. There is a real win-win opportunity here – solving neighborhood congestion issues, creating new jobs, and enhancing the visitor experience in Griffith Park. The Hollywood Sign will turn 100 in 2023. Wouldn’t it be nice if an aerial tramway could be in place (or at least approved) in time for the Sign’s centennial?

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 26 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood.

 

Business, City of Los Angeles, Community, Competition, Customer Service, Hollywood Chamber, Trash

A Case Study on Why We Need Competition

150 Comments

In the 38 years that I have worked in the City of Los Angeles (at two chambers of commerce), I have never seen anything quite like the rollout of RecycLA. It is fair to say that it has been nothing short of a disaster.

Los Angeles Times columnist Steve Lopez has had a field day skewering the program. The Wall Street Journal has editorialized against it. Some councilmembers are now calling for a study on how to kill the program, and there is even the threat of a citizens’ initiative to force the City to pull the plug.

Since July, the Times reports there have been more than 28,000 complaints of missed collections and poor service. Rates have skyrocketed. We have members who report their trash collection fees have more than tripled – and unfortunately this is not a rare occurrence. Ratepayers report sharp increases across the board from when they had control of their own trash services. The City Council has begun holding hearings to determine where things went wrong – time that they could be spending on other important matters if they didn’t have an unfolding debacle with which to deal.

How did this mess occur? Perhaps an explanation can be found in the City’s justification of the RecycLA program to “expand recycling, improve workers’ pay and conditions, and put cleaner burning refuse trucks on the street.” While those are worthwhile goals, what is obviously missing from the statement is any reference to improving service to the City’s customers – the businesses and residents’ groups forced to use this program. Somehow the City seems to have forgotten whom they serve.

Hearings on the proposed program began back in 2011. The City was under the gun to comply with a State directive for mandatory commercial recycling. At the time, the debate was whether to go with exclusive or nonexclusive franchise districts. The chief administrative officer (CAO) for the City recommended going with a non-exclusive system in order to preserve competition. Despite that recommendation, the City Council approved an exclusive system. Our chamber was represented at every hearing as were numerous other business organizations. We warned then that eliminating competition was a recipe for disaster – but hardly anyone listened. So now, with the debacle that has occurred, I think it wouldn’t hurt to refresh everyone’s memory on why competition is a good thing, and what happens when you grant exclusive franchise contracts.

If you google the word “competition” on the internet, you can find excellent material. Forbes, for example, has identified five reasons why competition is the best solution. Consider the following:

  1. Innovation – healthy competition encourages change and innovation, which leads to improvements and helping a company distinguish itself from the competition.
  2. Customer Service – competition forces a business to improve its service in order to compete for customers.
  3. Complacency – without competition, businesses become complacent. Competition forces a business to innovate.
  4. Understanding your core market – Competition moves a business to focus on its core audience and to figure out how to provide better service.
  5. Education – having competitors helps a business better understand what works and what doesn’t and can provide valuable insights.

These points illustrate why the City is going to have a difficult time reforming RecycLA to be effective. When you eliminate competition, you are headed for trouble. When you have an exclusive contract, what is the incentive to try and improve? You cannot legislate good service.

The Federal Trade Commission, which administers antitrust laws, has said that “competition in the marketplace is good for consumers and good for business. … When firms compete with each other, consumers get the best possible prices, quantity, and quality of goods and services.”

Yes, in certain instances, there can be justification for a monopoly, but by and large, that should only be a rare occasion, such as with certain utilities. And even with utilities, there is a debate on whether we would be better served with competition (remember the break-up of telecommunications? Somehow, we not only survived but prospered with the advent of competition).

I don’t know if the City can find a way to back out of a 10-year contract with the trash haulers holding these exclusive franchises. That part of this sad saga has yet to be written, but let’s hope that the City’s decisionmakers have learned why competition has been the basis of the U.S. economy for more than two centuries. It is one of the main reasons for our country’s success. I’ve always found it best not to mess with success.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 25 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood.

 

California, City of Los Angeles, Community, Homeless

Finally, A Step in the Right Direction to Help Mentally-Ill Homeless

164 Comments

Recently, I have observed an upswing in the number of residents, businesses and tourists asking why the City and State allow obviously-mentally ill people to wander our streets, endangering both themselves and the public. It is a fair question, but there has been no acceptable answer to this question.

Finally, we are beginning to see some of our public officials address what is a deplorable situation. Plaudits go to our L.A. County Board of Supervisors for approving a motion last week asking the California State legislature to change how they define the words “grave disability”, which might have a positive impact on the current situation.

Under the Lanterman-Petris-Short Act of 1967, a person is gravely disabled – and can be taken into custody and forcibly medicated – only if they are unable to meet basic needs for food, clothing or shelter. The county is requesting that the definition be expanded to include those who are unable to seek needed medical care, which would allow custody and compelled treatment of people who, in a court’s view, need medication but aren’t seeking it on their own.

Supervisors Kathryn Barger and Mark Ridley-Thomas co-sponsored the motion, and Barger noted that the county has to do better at getting people the healthcare they need. She’s right!

Only a year ago this week, a mentally-deranged homeless person entered the Jack-in-the Box restaurant on Sunset Blvd. at Cahuenga and stabbed three customers with a large knife before the LAPD shot him dead. Just this past Thanksgiving weekend, another mentally-ill person threatened people on Hollywood Blvd. with a screwdriver before grabbing a knife from a restaurant and stabbing a tourist.

These are not isolated cases. I hear frequently of other incidents involving homeless individuals who are mentally unstable. In my 25 years at the Chamber, I have never seen it as bad as it is today. The situation with the mentally ill has definitely deteriorated over that time period, which calls for a review of how they should be treated and a review of the civil rights argument.

We want to make this a walkable urban community, but that cannot happen if people are worried they will be attacked by the mentally ill. At some point, we will see an impact on jobs and our economy if these issues aren’t addressed. People will not visit or work in a community if they don’t feel safe.

I am encouraged that at the State level, Assemblymembers Laura Friedman and Miguel Santiago have just introduced AB1971, which would expand the definition of “gravely disabled”. As this measure is debated by the legislature, there will likely be a blistering attack from civil rights activists who believe that forcibly treating anyone will infringe on their civil rights.

It is time for the pendulum to swing back to the center. It is time for our representatives to recognize that the homeless man who was shot at the Jack-in the Box would have been better served if he had been forced into a treatment program. It is time for our representatives to recognize that the public also has a basic right to be able to walk in their community without fear that they will be attacked by someone who should be in treatment.

Voters approved Measures H and HHH to provide the funds to address our homeless crisis. If voters’ expectations are not met, then undoubtedly there will be political consequences. Providing housing and more funds for counseling and outreach will not do the job, unless the city and county also address getting the mentally-ill homeless into treatment. Congratulations to our Board of Supervisors for recognizing the problem and proposing a reasonable step, and thanks to Assemblymembers Friedman and Santiago for moving this forward.

Let’s hope the State legislature has the courage to adopt AB1971 and change the way the State defines “grave disabilities” to protect both the public and our homeless population. Solving a crisis today should not require relying on an outdated definition written over 50 years ago!

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 25 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood.

Business, Community, Culture, Economic Development, Hollywood, Jobs

Innovative Japanese Stores Help to Revitalize Hollywood

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As the year winds down, it is nice to be able to share some very positive news. Hollywood will soon be the home of two very innovative Japanese concepts, Japan House and Miniso, that are both scheduled to open within the next couple of weeks.

Japan House is a unique project of the Japanese Ministry of Foreign Affairs. It is a world outreach effort to promote Japan’s best art, cuisine, design, entertainment, fashion and technology. Three world class cities where there is a strong Japanese influence – Sao Paulo, Brazil; London, and Los Angeles – have been selected as the sites for the program. Because of its heavy pedestrian and visitor traffic, Hollywood was chosen as the site in L.A.

Yuko Kaifu, president of Japan House L.A., explained that the aim is to nurture a deeper understanding and appreciation of Japan, by creating a hub from which to showcase and communicate Japan as a country of countless charms, able to enrich the rest of the world.

Japan House will occupy a total of 14,000-sq.ft. at the Hollywood & Highland center on the second and fifth floors. Its various elements include a retail shop and small café on the second floor that will carry an expertly-curated selection of unique Japanese products, scheduled for a soft opening on December 20th. Also on that floor will be a gallery space, which will feature as its first exhibit “Anrealage: A light un light”, showcasing works of innovative fashion designer Kunihiko Morinaga, who uses photosensitive fabrics in his collections. That exhibit is set to run from January 19 through March 21, 2018.

The fifth floor will open in summer 2018 and will house a library, a salon and restaurant, where visitors can browse books on Japanese culture, attend lectures and demonstrations, and dine on fine Japanese cuisine. According to Michael McDowell, Executive Vice President of Japan House L.A., the 40-seat high-end restaurant will rotate in top chefs from Japan.

Miniso

Set to open a flagship store in Hollywood in January is Miniso, a rapidly-expanding Japanese seller of lifestyle products. Miniso is occupying 4,757-sq.ft. of space on Hollywood Blvd. that was previously occupied by American Apparel. The firm specializes in providing simple high-quality products at competitive prices. The majority of their items range from $1.99 up to $30.

The company has opened 1,000 stores around the world in the past three years, and its revenues doubled from $750-million in 2015 to $1.5-billion in 2016. Five stores are set to open in California. Besides Hollywood, there will stores in Santa Ana, Lakewood, and Moreno Valley. A store in Pasadena has already opened.

The location of these two unique concepts in Hollywood is encouraging. Especially with other retailers retrenching, there is a need for to rethink retail. The type of retail that can still succeed is experiential, one-of-a kind concepts. Japan House and Miniso both fit that model. We will be watching to see how both stores (and the fine dining restaurant) perform. Their success would pave the way for other similar concepts to come to Hollywood.

What is particularly encouraging to us is that they both recognized the potential of locating in Hollywood. We have been expecting to see an upswing in retailers. With the rapid revitalization that is occurring in Hollywood, we have seen new residential, office and hotels, but have yet to see a significant turn-around with retail. Hopefully, these stores will lead the way.

I’m planning to visit the new stores as soon as they open. I hope you will also!

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 25 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood.

 

California, City of Los Angeles, Community, Economic Development, Hollywood, Hollywood Chamber, Revitalization

The Elephant in the Room

417 Comments

The legislative season is over, and we finally have begun to see our California legislature act on the housing crisis in this state. The Governor signed 15 bills that were intended to smooth the way to more housing being built.

Over the past year, you have heard me discuss the importance of addressing California’s housing crisis. So, I think it is appropriate to commend the legislature and the Governor for taking steps to start addressing what is an enormous problem.

Among the bills that were passed was a $4-billion bond measure to provide new affordable-housing units, a provision to streamline housing requirements in cities that aren’t building to state-mandated goals, incentives for cities to plan new neighborhoods, and prod local governments to get shovels into the ground, and giving the State the ability to review any action or failure to act by a city or county that it deems out of compliance with its housing element.

According to the California Department of Housing and Community Development, the State is currently falling about 100,000 units short each year in what it should be building to meet the demand. Under the best-case forecasts, the 15 new measures will only make a dent in the shortfall.

Our representatives admitted this is only a down payment on what is needed to really have an impact on the housing crisis. The fact is, the one way to resolve the housing shortfall in a big way is to spur the private sector to build more units. The only way to do that is to address the “elephant in the room” which is to reform the California Environmental Quality Act – more commonly referred to as CEQA.

Achieving CEQA reform is a monumental task because of the many special interest groups that have grown a cottage industry of using CEQA to squeeze developers for money, concessions, or to outright stop needed projects. The Hollywood Chamber was a part of a broad-based statewide coalition that worked for years to reform CEQA. A couple of years ago, we thought reform was finally doable. However, amendments were tacked on to the reform bills that would have ended up making CEQA compliance even worse, so the reform effort was dropped at that time.

Before that, in 2011, our Chamber convinced then-State Senator Curren Price to introduce SB735 for us. We thought we had the perfect solution – a measure that would strengthen the timelines for judicial consideration of CEQA cases. The idea was to require the courts to meet stricter administrative deadlines, enabling judges to decide cases as was originally the intent of the CEQA law.

However, our effort died when the State Judicial Council opposed our efforts, saying they did not have the wherewithal to speed up the process. Because we were just coming out of the Great Recession, there was no chance of providing the funding that they needed to expedite the process at that time.

So, when the Legislature takes this issue up again next year, I have a few suggestions. Why not provide more funding for judges to review CEQA cases and also to provide an expedited litigation schedule for resolution of an action and stricter timelines for appeal of a judgment for all projects? While we appreciate that the State extended an expedited schedule for court review of large Environmental Leadership Development Projects, this should apply to all projects – especially housing. Providing more funding for the courts review process might be the best investment the State could make in speeding up the construction of new housing.

This wouldn’t solve all CEQA-related problems, but it would be a start. While it wouldn’t please those whose goal is to delay and delay and delay, I believe the majority of Californians would support common-sense action that would still allow CEQA challenges but speed up the litigation.

And here is another suggestion. Rather than just encourage cities to meet their housing goals, why not add some teeth to hold cities accountable to meet the mandate of their housing goals? Just last month, the news media reported that the city of Redondo Beach approved a moratorium on new multifamily units even though they had only achieved 41 percent of their housing goals. If there are no penalties, cities will continue to consider meeting housing goals as a suggestion rather than a mandate.

There will be other suggestions made, but I thought I’d get a head-start out of the gate. Let’s encourage our legislature to take the hard steps to resolve the housing crisis.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 25 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood.

 

Business, Community, Employment, Hollywood, Jobs, Parking, Revitalization

Building a Prosperous Hollywood

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Hollywood has always been associated with new ideas. If you think about the early entertainment industry that located here, it was all about creativity and creating stories that would be compelling.

Here we are 100 years later, and creativity continues to rule in Hollywood, even as the entertainment industry undergoes a major transformation due to new technologies that are opening new opportunities. And so, it is logical to assume that Hollywood would be one of the places in Southern California popular with the new media and tech industry.

One example of the draw that Hollywood has become for new start-ups is with our shared workspace providers. The first to come to Hollywood was We Work, which opened its first Los Angeles location here in Hollywood in 2011. They will be opening their third Hollywood facility on Vine Street this fall. Among their 1,900 Hollywood “members” are entrepreneurs, freelancers, start-ups and small businesses. They provide work space for businesses, ranging from one employee up to 100 employees. Many of these entrepreneurial and tech start-ups may over time grow significantly – creating a lot of jobs. In addition to We Work, other shared workspace concepts have invested in Hollywood, including Neuehouse at Columbia Square, and HClub, which will open next year in the former Redbury Hotel. We expect this critical mass of new businesses to have a profound effect on Hollywood going forward.

One of the exciting new companies that has located in Hollywood is Pavemint – a company that is rolling out its app and services this month. The company relocated from Houston to Los Angeles in 2015, finding a home in a historic building on Hollywood Blvd. Today, they have 40 full and part-time positions.

Probably, the easiest way to understand this company’s model is as the “Airbnb” for parking. Their goal is to unlock the inventory of parking spaces in Los Angeles through a peer-to-peer marketplace.

For the past two years, they have worked on refining their app to work seamlessly for those looking for parking spaces. At the same time, they have been building up an inventory of parking within Los Angeles. Although not the first parking app to hit the market, Pavemint already has the largest peer-to-peer parking network in the U.S.

They chose Hollywood as their base for several reasons: first, they were able to find cool office space on Hollywood Blvd.; second, Hollywood was centrally located, and finally, Hollywood has a parking problem. They are continuing to expand their inventory of parking spaces here and throughout L.A., and later expect to expand to other cities.

This is a job-creating concept that wouldn’t have even been imagined a few years ago.

We want to continue attracting cutting-edge, creative companies like Pavemint to Hollywood and to have them grow here. In order to do so, we need to build an environment that is conducive for these growing firms, with incubator shared working spaces available to get them started and then an inventory of additional office space to grow into, workforce housing, shopping, easy transit access and entertainment. And we need to preserve the “cool” factor of Hollywood.

What is noteworthy is that a lot of what is occurring in Hollywood has happened organically, without a lot of “priming” from the government. Where the government must step in is to provide the services and security needed to keep this an attractive business location. That means being business friendly, addressing issues such as homeless encampments and providing needed services for mentally-ill homeless persons, which I’ll address in a future column.

Hollywood is well positioned to truly become a live-work model for the entire region. If we can demonstrate how to make this work successfully here, we can show other communities the way to facilitate growth and prosperity.

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Leron Gubler has been serving as the President and CEO of the Hollywood Chamber of Commerce for the past 25 years. His tenure since 1992 continues to oversee the great comeback story of Hollywood.

Business, City of Los Angeles, Community, Employment, Hollywood, Hotels, Jobs

New Hotels Enrich Hollywood and Los Angeles

3,069 Comments

Two new hotels opened in Hollywood last month – the Kimpton Everly with 216 rooms and the Hampton Inn Hollywood with 112 rooms. Together with the Dream Hotel that opened in July, we have added more than 500 rooms to the Hollywood market this year. This is a 15-percent increase in the number of hotel rooms in Hollywood, bringing our total rooms to 3,926 in 51 properties.

By my count, there are another 15 hotels proposed for Hollywood. I’m sure some people are asking if we can support all of these hotels. One important thing to remember is that the hotels do not all come online at once. It is a long-way from a hotel being proposed to under construction. There is no guarantee that all the proposed venues will be built. The marketplace will be the final determinant of what is actually built. The interest in building new hotels in Hollywood is a nice problem to have!

I recall back in the year 2000 when our chair-of-the board, Oscar Arslanian, and I trekked to Beverly Hills to meet with a representative of Hilton Hotels to convince them that they should come to Hollywood. At the time, we had a boutique hotel task force and were trying to get new hotel construction in Hollywood. It had been 25 years since a significant hotel had opened in Hollywood. Hilton turned us down, saying that the timing wasn’t right for a hotel in Hollywood. We were ahead of our time.

It was a frustrating period for us. Hollywood was the top tourist draw in Los Angeles County, and yet no new hotels were coming to our community. They were locating in neighboring cities, which meant transient occupancy taxes (TOT) collected by those hotels were also going to other communities. TOT taxes can be an important component of a city’s budget, so this was potentially a huge loss for Los Angeles. In L.A. during its last fiscal year, the city received $230.8-million in TOT taxes and another $27.5-million from short-term rental taxes. With Los Angeles facing a budget gap of over $200-million, finding new sources of revenue are key to its survival and maintaining services. Each new hotel that opens in the city helps fill the budget shortfall.

Aside from providing tax revenue to a city, there are numerous other benefits that new hotels bring to the community – one of which is jobs. The Dream Hotel and its associated restaurants employ about 800 people. The Everly Hotel has a staff of 125 and the Hampton Inn employs another 40. These are all new jobs, on sites where there were few jobs before. To be able to add this many jobs to our employment base is exciting. Yes, many of these jobs are entry level positions, but in this community with all income levels, we need both entry level and executive positions.

New hotels also add to the ambiance of a neighborhood. Infill development helps to activate the street. The areas around the Dream Hotel and Everly were previously “dead” as far as pedestrians. There was no reason for anyone to walk there. Now, you see people walking to and from these venues, which creates more interest but also makes the neighborhood safer. It is impressive to now see people walking in Hollywood, not just on the major thoroughfares, but also on the side streets. Hollywood is a model for the entire City on how to activate a neighborhood.

And hotels also are great public gathering spaces for locals – with lobbies, restaurants, meeting rooms, and in some cases, rooftop terraces that overlook the Hollywood Hills and urban L.A. As we all know, Hollywood has the unfortunate distinction of having little park and open space. This makes it even more important to have places where people can gather. The general manager of the Everly Hotel related to me that they are positioning their hotel as one that is serving the local neighborhood. Since this new hotel lies in close proximity to many of our hillside neighborhoods, it only makes sense.

The fact is new hotels enrich a community in many ways. Downtown Hollywood is becoming an even more attractive urban neighborhood by having these hotels to complement the residential, retail and office components that are coming online. The Hollywood hotel boom is a very good thing for our community and for the City as a whole.

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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.

 

Business, City of Los Angeles, Community, Economic Development, Employment, Hollywood, Jobs

Does the Middle Class Have a Future in Los Angeles?

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Recently I read Richard Florida’s book, The New Urban Crisis. Among the critical issues he identifies is the decline of the middle class in our urban centers. What his research found was that the middle class is the smallest in the most economically vibrant places, in particular, what he defines as “superstar cities” and tech hubs. Los Angeles was identified as one of these urban areas where the middle class is the smallest.

At a meeting we held last week with Mayor Eric Garcetti, he voiced what is undoubtedly one of the most challenging issue facing Los Angeles – will our children be able to stay here and enjoy the prosperous community that has been built over the last generation. “We need a middle class and not just a service class,” said the Mayor, emphasizing that it is essential that the middle class not be squeezed out. The Mayor was right in highlighting this challenge.

If we cannot provide an opportunity for our children to remain here, what kind of a legacy have we provided? It does not matter if Los Angeles is able to provide middle-class jobs, if the cost of living is such that they cannot get ahead. I think each of us know of young people who have left the state as it has become increasingly unaffordable. I have two nieces, third-generation Angelenos, who moved to Colorado, in order to be able to purchase a home. I’m sure you can name a few.

Let me share a few statistics that I have seen over the last few months. The New York Times reported earlier this month that housing prices in L.A., San Francisco, San Jose, and San Diego have jumped as much as 75 percent over the past five years, making California the toughest market for first time home buyers. The median cost of a home in California is now over $500,000, twice the national average. California’s homeownership rate of 54 percent ranks last in the nation.

A recent article by Elijah Chiland noted that the real estate website Redfin reports that just 6.6 percent of homes listed in the greater L.A. region are considered affordable to residents making the median income. The problem is that while there have been significant increases in home values, wages in Los Angeles have risen less than half a percent since 2012.

On top of this, there is the issue of taxation. When you consider the compounding effect of the taxes levied at the state, county and local levels, it adds up to a huge disincentive for the middle class and young people to remain here. In an article published last month, Chris Nichols of Politifact, responding to the question of whether California taxes were really among the highest in the nation, provided the following facts: On a per capita basis, Californians pay $1,991 annually in state income taxes, which ranks fourth highest in the country. California has the highest-in-the nation sales tax rate of 7.25 per cent (and that is before local levies recently passed for such worthy causes as mass transit and homeless services). When the recently-approved 12-cent per gallon increase in the state gas tax goes into effect on November 1, 2017, it will make the California gas tax second highest in the nation.

Now, I am not arguing against the need for these new taxes and fees to address serious state and local problems. What I am saying is that the compounding effect of these taxes threatens our middle class.

Even property taxes, which we tout as low because of Proposition 13, create a heavy burden for those just starting out. Since median housing prices are twice the national average, the property taxes are still a hurdle, especially when compounded by additional parcel taxes and fees charged to property owners in a specific area to pay for special needs and public improvements.

The state legislature has introduced 130 housing measures this year to address the affordable housing issue. The City is considering linkage fees to fund affordable housing. The problem with many of these proposals is that it is impossible for government to solve the housing crisis with new fees to develop affordable housing. The amount of housing they could fund is only a drop in the bucket compared to what is needed.

Christopher Thornberg of Beacon Economics recently said that California would need to add between 800,000 and one-million additional residential units to move the state to national norms for housing stock and vacancy rates. In L.A., we would need a total of 180,000 to 200,000 residential units.

The only way to meet these type of numbers is to stimulate the private sector, which is now weighed down with government regulations that make it impossible for the free market to work the way it is supposed to. Our public officials are going to have to make some tough decisions if they really want to address the housing crisis.

Here are a few suggestions. At the State level, our representatives are going to finally need to reform the California Environmental Quality Act (CEQA) to stop egregious abuses of this law that can kill or delay needed projects for years. They need to approve language that treats infill development in urban areas differently than pristine open space. State and city officials need to incentivize developers to build low and moderate income housing units. There are ways to do this, such as increasing density for targeted units or reducing parking requirements, which would bring down costs on a per unit basis. And the courts need to be directed to accelerate the review of legal challenges to housing projects.

It took a long time for this housing crisis to develop, and it may take a long time to work through a solution, but we cannot afford to delay. Our legislators need to start acting now to solve this problem. If they don’t, the California dream may be a thing of the past for our vanishing middle class.

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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.

 

Business, Community, Employment, Hollywood, Hotels, Jobs, Revitalization, Tourism

Hotel Complex is a Dream for Hollywood Jobs

362 Comments

When one thinks about the visionaries who made Hollywood what it is today, there are a lot of candidates to consider: Sid Grauman who dreamed up the picture palaces and movie premieres, C.E. Toberman, who built most of the grand buildings on Hollywood Blvd. and made the Hollywood Bowl a reality, the Chandler family and their associates who put the huge Hollywood Sign on Mt. Lee, Johnny Grant, who built the Hollywood Walk of Fame into an international icon – the list could go on and on.

And in fact, the list continues to grow. Last week, the long-awaited Dream Hotel opened its doors – the culmination of a 10-year dream by Richard Heyman and Grant King of the Relevant Group. These two gentlemen looked at a very nondescript stretch of Selma Avenue just west of Cahuenga and imagined something no one else saw – a thriving entertainment complex.

Their original vision was to convert an old industrial building into a hotel and to activate the adjacent derelict alley with restaurants. Over the years, that vision grew. They now envision up to four hotels within a two-block area. This is a case study in “place-making” if ever there was one. The two partners envision a vibrant neighborhood something akin to the Meat Packing District in New York. Looking at what they have already created, we can only imagine what another three hotels might do for that neighborhood.

What is especially noteworthy is that the new hotel and the four adjacent restaurants have created 700 jobs. That is significant in a stretch where the previous structure on the site probably provided less than 10 jobs. Not only do the venues provide employment, but they will also offer new entertainment opportunities for Hollywood residents, and will act as a magnet, drawing guests from throughout Los Angeles. It will help to perpetuate Hollywood’s image as the entertainment center of Los Angeles.

If you talk with Grant and Richard, they will tell you of the many challenges they faced to make their dream a reality. When they couldn’t get financing locally for the project, Grant went to China where he successfully raised the needed funding.

They simply did not take “no” for an answer. They wanted to bring the “A-game” to Hollywood, and they did. Besides Dream Hotels, they brought in the Tao Group, one of the most successful restaurant groups in the nation. These unique restaurants in the Dream Hotel complex are already receiving rave reviews, so be sure to check out Tao, The Highlight Room, Beauty & Essex, and Luchini.

When you visit the Dream, you will agree that it will be catalytic not only for that stretch of Selma Avenue, but for Hollywood in general. This type of project perpetuates the excitement about the revitalization of Hollywood. I often speak with developers who remark that they can feel the energy here and that they want to be part of it. They have heard through word of mouth that things are happening in Hollywood. When they come to visit, they experience it.

Hollywood did not become the name synonymous with the film industry by thinking small. It has always been associated with “dreamers” – but dreamers who made things happen.

As the Hollywood Chamber of Commerce, we congratulate Richard and Grant on their success and express our appreciation for their faith in Hollywood. We can hardly wait to see their next project.

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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.

 

Business, City of Los Angeles, Community, Economic Development, Employment, Hollywood Chamber, Jobs, Real Estate, Target

Musings About a Target

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By now, most people have heard the disappointing news that Superior Court Judge Richard L. Fruin, Jr. has once again sided with a very small group of plaintiffs to prevent Hollywood’s new Target from being completed. I thought it might be appropriate to offer of few of my own observations on this sad state of affairs.

Let me first offer a little background. It has now been nine years since Target first filed to build a store in Hollywood. When it was initially approved by the City and threatened with a lawsuit, Target decided to do a complete Environmental Impact Report (EIR) to strengthen its case against lawsuits. However, that later proved to be of little value.

At issue was a quirk in the Station Neighborhood Area Plan (SNAP) that governs development in that area. The SNAP ordinance allows projects that are strictly retail to only be 35 feet in height, but allows mixed-use projects to be up to 75 feet. The City Council and Planning Commission felt that the Target would be a benefit to the neighborhood and granted a variance to allow the project to be built at the 75-foot height.

The La Mirada Neighborhood Association, which is reputed to have only two or three members, sued. Judge Fruin ruled that the EIR was fine, but that the city erred in granting a variance and should have changed the zoning.

The City, in order to comply with the judge’s order, created a new Subarea F zoning category for big box retail centers. Once again, the La Mirada Neighborhood Association sued, saying that the City should have performed a new EIR to justify the new zoning designation. And once again, the judge agreed with the plaintiffs. It serves no purpose to rebut the judge’s rationale for his decision, but I would like to share my thoughts on what a loss it means for Hollywood.

Between 250 and 300 permanent jobs have been lost to the community now for several years because of these lawsuits. These are jobs that could have been filled by many of the low-income residents in the neighborhood close to the Target site. In addition, the Target would have provided expanded shopping opportunities for our entire Hollywood community, and would have been within walking distance for many low-income neighborhoods. It is only two blocks from the Hollywood/Western subway station and so is easily reachable from all areas of Hollywood. We haven’t had a department store since Sears closed its Hollywood store in 2008, so this would have been a wonderful addition to the community.

I get more questions about the status of the Target from both residents and businesses than any other subject. There is overwhelming support in Hollywood for this store. So the question is “What are the specific reasons why these few people are opposing the Target so vehemently?”

Robert Silverstein, the plaintiff’s attorney, usually responds that the plaintiffs aren’t against a Target – they just want them to follow the city’s rules. My objection to that answer is that rules set by a city are not cast in stone. Historically, cities have always had broad discretionary powers to determine land use within their bounds. The SNAP ordinance is not the U.S. Constitution. The City should have the right to make changes as circumstances warrant.

We live in an urban area. What value is achieved by limiting a retail center to one story? When we have attended past hearings on the Target, the main justification of the opponents for their position is that they want housing built in the neighborhood, not just retail centers. If developers wants added height, they have to provide housing as well, they say. They also have voiced concerns over views being blocked or a building built out-of-scale with the neighborhood.

I could understand these arguments eight years ago, but circumstances have changed dramatically since that time and the rationale for those positions no longer applies. In the interim, three projects have been announced and are in the entitlement phase across the street from the Target that will provide 1,293 housing units. These projects will all be as high, or higher, than the Target. So what purpose is to be achieved by forcing the Target to be torn down and rebuilt at one story? My answer would be “Absolutely none.”

The opponents can bask in their latest court victory, but in my view, they should be asking themselves if they are really serving the greater good for Hollywood? If Target pulls out because they are tired of fighting this small group of naysayers, have the interests of Hollywood really been served? Does the loss of these needed jobs and shopping opportunities mean anything to the opponents?

Being with the Chamber of Commerce, I am an eternal optimist. We have been through some difficult times in Hollywood, and despite setbacks, the community’s revitalization continues to move forward. I remain hopeful that a solution can be found so that the Target can be completed. Meanwhile, I would urge everyone who is supportive of having the Target finished, to not be silent. Let the La Mirada Neighborhood Association know how you feel.

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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.