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Playa Vista: Real Growth or Just Adding to the Barbell Economy?

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PERSPECTIVE-The Playa Vista Tech campus is an example of an effective model for creating business activity. It acts as a magnet that attracts cutting edge firms in the industry. 

But will it create real growth, for both the city and the region? 

Can this approach be adapted to blighted areas, long neglected by the city? 

Mayor Garcetti made much of Yahoo’s announcement that it would move from Santa Monica to Playa Vista. He was particularly happy about the 400 jobs that came with it.  

Really, though, these are not new jobs. They are coming all the way from far-off Santa Monica. Many of the employees probably live within the Los Angeles city limits and are unlikely to move from their present residences or change their shopping habits. Ultimately, some may choose to move to new housing in or near the Playa Vista complex, but that largely amounts to shuffling people around the region. 

Yahoo is undoubtedly already paying Los Angeles business tax to some degree for its Santa Monica operation. Therefore, the business tax bump the city will receive may not be as significant as expected. 

It is important to note that Yahoo is not moving its Burbank office. Burbank still beats Los Angeles for being business friendly. 

Who will fill the space in Santa Monica left behind by Yahoo? 

Of course, no one knows. It would be great if a replacement arrives from outside the region or state, but it is more likely to come from the city of Los Angeles, offsetting much of the advantage the city earned from the Yahoo move. 

What we need to know is the composition and characteristics of the tech center’s new occupants. Is the mayor focusing on net new business for the region, or is he simply attempting to fill the campus with any tech company, from anywhere? The former provides definite benefits; the latter more or less shifts the economic impact in our regional economy, to the extent businesses are drawn from the local market. 

It would help if Garcetti would share his objectives and ask for an independent analysis laying out the targeted net effect of the tech center for the city. Progress could then be tracked against the forecast. If the strategy just relocates existing businesses in the region, it is time to return to the drawing board. 

Regardless, the basic concept is sound as long as it promotes real growth wherever it is implemented. It is also important to design clusters that cater to the middle class. 

Why can’t the strategy be used to inject life into blighted sections all too prevalent in other parts of the city? For example, how about Valley Plaza in the East San Fernando Valley? 

I fear the tired old mixed-use retail and residential concept being planned for nearby Laurel Plaza will ultimately be applied at Valley Plaza. We do not need another NoHo Arts District in the East Valley. 

Retail is not an economic engine – at least one that creates good-paying jobs. And the residential aspects do not come close to addressing affordable housing needs. 

Let’s be bold and condemn the blocks south of Victory, north of Oxnard and east of Laurel Canyon all the way to the Laurel Plaza holdings. Re-zone the area to industrial and do whatever it takes to attract manufacturing. We can offer incentives just as the mayor did for Yahoo. 

Los Angeles should look to Reno, Nevada for inspiration and ideas. The Biggest Little City has been on a roll these last few years, attracting Apple, Tesla and, just recently, Switch. Not only will these companies add billions of dollars to the Washoe Valley/Northern Nevada economy, many of the new jobs will be of the solid middle-class variety, the very type of jobs that are needed here to relieve unemployment among semi-skilled and skilled workers who were displaced by the recession. 

High tech jobs are very desirable, but the city appears to be fixated on them at the expense of the middle class labor force. An unemployed manufacturing laborer will face a tough time, if not impossible barrier, to land a job in a tech cluster similar to Playa Vista’s. 

We need to encourage and foster industries that form an employment path, one that enables workers to develop new and more competitive skills that will help them progress. 

Otherwise, we can expect a continuation of the barbell effect the 2020 Commission feared. We will be on a path leading to a work force skewed towards burger flippers and application geeks, with very little in between.  

How many burgers can a geek eat?

 

(Paul Hatfield is a CPA and former NC Valley Village board member and treasurer.  He blogs at Village to Village and contributes to CityWatch. He can be reached at: [email protected])

–cw

 

 

 

CityWatch

Vol 13 Issue 7

Pub: Jan 23, 2015

 

 

 

 

 

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