`IT'S WRONG-WAY L.A.' STUDY SLAMS LOCAL LEADERS, OFFERS PLAN FOR ECONOMIC REVIVAL.

Byline: Gregory J. Wilcox Staff Writer

In a scathing rebuke of political leadership in the greater Los Angeles area, a think tank on Wednesday outlined a sweeping plan to turn around and strengthen the five-county region's economy and boost the fortunes of the middle class.

The report titled ``Recapturing the Dream: A Winning Strategy for the L.A. Region'' harshly criticized the local government agencies, especially the city of Los Angeles, and suggested elected and appointed officials need an attitude overhaul.

It cited a long list of developments that have taken Los Angeles from being ``the ultimate expression of expansive American capitalism'' to a region burdened with serious urban problems of traffic, pollution, a widening gap between rich and poor and dysfunctional educational and political systems.

``Concerns (among local leaders) about the environment and social justice are considered far more important than sustaining job growth and business creation,'' the report said.

``Los Angeles-area leadership, especially the city of Los Angeles, is indifferent if not hostile to business activity.''

The report for the Los Angeles County Economic Development Corp. said Los Angeles city officials were pursuing social measures such as inclusionary zoning, living wages and bans on big-box retailers rather than improved schools and training, lower taxes and a healthier business climate.

The study was conducted by Joel Kotkin, Irvine Senior Fellow at the Washington, D.C.-based New America Foundation, and Jack Kyser, senior vice president and chief economist at the LAEDC. It was done under the auspices of the newly formed Center for Economic Development and will be the subject of a discussion among most of the major Los Angeles mayoral candidates next Wednesday.

The report said local leaders too often come into office with little experience with the private economy and often appear disinterested, ``if not repulsed,'' by how the economy operates.

For example, Kyser said the city took too much time in overhauling business-tax regulations, issuing permits and conducting inspections, and said the sales tax can drive spending into neighboring cities.

``Time is money for a business,'' Kyser said, adding that even Los Angeles' recent cut in business taxes of 15 percent over five years leaves the city ``with a continuing competitive deficit'' to nearby communities.

The study recommends a five-point plan including schooling politicians in basic economics, developing a serious strategy for economic growth and working with local industry to identify job trends and needs.

``Regional businesses, however, cannot be expected to thrive or expand in a community whose leadership remains fundamentally indifferent if not actively resistant to their endeavors,'' the report said.

Mayor James Hahn's spokeswoman defended the mayor's performance in the economic development arena, noting that he signed into law business-tax reform and is working to build more affordable housing in the city.

``This mayor is the business mayor. He has instituted the most sweeping business-tax reform in the history of Los Angeles,'' said Renata Simril, deputy mayor for economic development. ``We have been successful in this administration of helping to locate and (keep) big companies here.''

Kotkin scoffed at the notion that Hahn's administration is business- friendly.

``There is kind of a disconnect. Nobody is asking Mayor Hahn how do we get more economic growth. (Former Mayor Richard) Riordan was infinitely more popular with the business community and really tried to address those issues,'' he said in an interview.

The region has taken some big hits, too, as the economy morphed into its present form.

Between 1989 and 1995 the region lost 50 percent of its defense and aerospace jobs versus a 33 percent decline for the rest of California and a 20 percent decline nationally.

At the same time, companies most involved with Los Angeles' rise to global prominence - Broadway stores, Lockheed Corp., Hughes Aircraft Co. and Security Pacific Bank, First Interstate Bank, Great Western Savings, logos that defined the downtown skyline - had or were about to disappear through mergers.

Still, by 1996, Los Angeles and Orange counties had some of the highest rates of business formation in the country. Now, the region's economy is based on smaller, diverse ``no name'' companies as immigrants and minorities came to dominate the sectors of garment making, food processing, textiles, toys and electronics.

Kotkin noted that in Los Angeles a lot of businesses are middle-class operations owned by minorities and women.

Kotkin and Kyser believe growth efforts should be focused on professional and business services, tourism, financial services, international trade, apparel and textiles design and manufacturing; motion picture and television production; health sciences/biomedical and specialized manufacturing.

Kyser said that it is crucial to involve private-sector executives, who in the past helped shape the region's business environment. They are better prepared to the task than elected or appointed public officials.

``They don't really have a long-term focus. And that's what's needed in the city of Los Angeles. Some have just gone off track and are getting involved in social issues such as not smoking on area beaches,'' he said.

Bruce Ackerman, president and chief executive officer of the Economic Alliance of the San Fernando Valley, notes that there are 88 other cities in Los Angeles County that also make a big contribution to the regional economy. And they don't do business the way the city of Los Angeles does.

``I think they (the report's authors) are right on the money,'' said Ackerman, a member of Hahn's economic advisory council. ``They are not saying anything that most of us haven't talked about in the past.''

Gregory J. Wilcox, [phone]

greg.wilcox(at)dailynews.com

LEADERSHIP PROGRAM

On Wednesday, Jan. 26, the Los Angeles Economic Development Corp. will present its annual Economic Forecast for the coming year, a panel discussion about it and a program on leadership for the region that will feature Los Angeles mayoral candidates Richard Alarcon, Bob Hertzberg and Bernard Parks. Antonio Villaraigosa and Mayor James Hahn also are invited. It will be held from 8:30 a.m. to noon next Wednesday at the Colburn School of Performing Arts, Zipper Hall, 200 S. Grand Ave. in downtown Los Angeles. Call 213-236-4820.

The growth strategy consists of:

--A program of educating elected officials about economic realities and encourage them to prepare a cost/benefit analysis of any laws or regulations involving business.

--Identifying local export industries that have the best future prospects in both sales and quality job growth.

--Identify industry thought leaders and work with them to create a specific support and growth strategy.

--Survey training programs for key industries to find ways local firms can locate good job candidates.

--Review the business environment of targeted industries once a year to determine if any directional change is needed.

CAPTION(S):

box, chart

Box:

LEADERSHIP PROGRAM (see text)

Chart:

BARRIERS TO FUTURE EXPANSION

SOURCE: Economic Development Corp. of Los Angeles County