Jul 30, 2011 11:19 PM GMT
Why has Los Angeles lost its mojo? A big reason is a decline in the power and mettle of the city's once-vibrant business community. Between the late 1980s and the end of the millennium, many of L.A.'s largest and most influential firms—ARCO, Security Pacific, First Interstate, Union Oil, Sun America—disappeared in a host of mergers that saw their management shift to cities like London, New York and San Francisco. Meanwhile, says David Abel, a Democratic Party activist and publisher of the influential Planning Report, once-powerful groups like the Los Angeles Chamber of Commerce and the Los Angeles County Economic Development Corporation lost influence.
The machine that now controls Los Angeles by default consists of an alliance between labor and the political leadership of the Latino community, the area's largest ethnic population. But since politicians serve at the whim of labor interests, they seldom speak up for homeowners and small businesses.
Mayor Villaraigosa, a former labor organizer, has little understanding of private-sector economic development beyond well-connected real-estate interests whom he has courted and which have supported him. He has been a strong backer of L.A. Live, a downtown ports and entertainment complex, and other projects that have benefited from favorable tax treatment and major public infrastructure investments. He's currently supporting a push to build a new downtown football stadium, though L.A. has no professional football team. His biggest priority is to build the so-called subway to the sea, a $40 billion train line to connect downtown with the Pacific.
But L.A.'s downtown employs a mere 2.5% of the region's work force; New York's central business districts, by contrast, employ roughly 20%. "To put the entire focus of development on downtown L.A.," says Ali Modarres, chairman of the geography department at Cal State Los Angeles, "is to ignore the historical, cultural, economic [and] social forces that have shaped the larger geography of this metropolitan area."