Despite shortcomings in first year, business grades Hahn highly. (Up Front).

When James Hahn was campaigning for L.A. mayor last year, he promised lots of things to the business community: business tax reform, a streamlining of the complex permits system and a better focus on economic development.

What's more, he promised quick action on all these fronts.

By any objective measure, Hahn has fallen short of these goals after a year in office. Substantial business tax reform is still inching forward, the permit process remains nightmarish, and the city has yet to come up with a coherent development strategy. Plus, it took nine months for the mayor to assemble his economic team.

Meanwhile, Hahn has had only limited success so far in dealing with the still-sluggish economy. Some of the programs he launched, like the Dine L.A. and Shop L.A. campaigns, had modest results; others, like fast-tracking public works projects, have yet to materialize.

But many are willing to cut the mayor some slack. Various business leaders interviewed last week give him a "B" on his economic performance, maintaining that the Sept. 11 fallout, the imbroglio with former Police Chief Bernard Parks and the secession drive have all been significant distractions.

"The mayor has had a lot of other things to contend with besides bread-and-butter business issues," said Lee Harrington, president and chief executive of the Economic Development Corp. of Los Angeles County. "If he'd had a more clear field, I might be more critical of his performance."

Some praise doled out 

Given the scope of these unanticipated challenges, business leaders praised Hahn's more modest actions. They include exempting startups from the business license tax, taking steps to speed payments to vendors, offering a money-back guarantee for permits not issued in a timely manner, and the establishment of a Mexico trade desk.

"These are all steps in the right direction and it shows he's paying attention to small business issues," said Gene Hale, chairman of the Greater Los Angeles African American Chamber of Commerce. "I'm especially impressed with the change in attitude of his business team toward small business -- it's more proactive."

Indeed, several business representatives said Hahn has paid more attention to the needs of small business than his predecessor, Richard Riordan.

"Mayor Riordan was always looking to cut that big development deal," said one business leader. "Hahn doesn't have those big business connections; he knows the bureaucracy. So he's focusing more on the needs of small businesses."

Another difference between the two: Riordan came up with grandiose plans and tried to push those plans through an often-resistant City Council. The business tax reform he unveiled four years ago is a good example. Four months later, it went down in flames, IN large part because the council felt left out of the process.

Hahn, on the other hand, is more willing to let things work through the bureaucracy. This approach is slower and doesn't generate the headlines over a short time span.

Slow pace criticized

It also has led to some frustration.

"This is still the most expensive city in the region to do business with by far," said Fred Gaines, chairman of the Valley Industry and Commerce Association, which has been critical of the Hahn administration's handling of business tax reform. "As long as this is the most expensive city, we will miss opportunities to attract new businesses and have existing businesses expand within city limits."

In the next couple of weeks, a panel formed to study the business tax issue is due to release recommendations on how to reduce and simplify business license tax rates. But it's now nearly four years since Riordan introduced his failed business tax reform plan.

"If the mayor doesn't move this forward and if it doesn't get on the Council agenda very soon, we're going to step up our rhetoric," said Rusty Hammer, president and chief executive of the L.A. Area Chamber of Commerce.

Another sore point is the long delay in naming a deputy mayor for economic development. Hahn took nearly nine months to name his Business Team chief Jonathan Kevles to the post.

"That probably caused a little bit of confusion," said Ken Lombard, president of Johnson Development Corp. and the Magic Johnson Theatres, who also chairs the city's Board of Water and Power Commissioners. "But I think now he's got quality people on his economic development team that will move projects forward."

Housing plan lauded

Shortly after taking office, Hahn announced he was setting up a $100 million housing trust fund to jump start financing for much-needed affordable housing projects in the city. The plan drew praise from business leaders, especially because the trust fund would be financed with money cobbled together from several departments and programs, and not through developer fees.

On Sept. 11-related matters, the mayor generally drew plaudits for trying to deal with the tourism and hospitality industries, but many of the measures he undertook have had limited success.

"He did put forward these 'Dine L.A.' and 'Shop L.A.' plans, but these only reinforced the point that it's very hard to campaign against national trends of people not going out," said Carol Schatz, president and chief executive of the Central City Association. "In the end, these things just didn't work all that well."

The biggest need for businesses in the wake of 9/11 was bridge financing, to get them through the rough patch, according to the LAEDC's Harrington. "The city has limited ability to get financing to businesses," Harrington said. "That's just not the job of a city."

But Kevles said that's what the administration intends to do: help direct small businesses, especially manufacturing companies, toward sources of capital so they can expand here.

"We want to help grow the next Fortune 500 companies, instead of watching small companies get bought up and move out of state," Kevles said.

Harrington said the biggest lift that the city could give to businesses is streamlining the permit process.

"It's the least costly and the easiest thing that the mayor can do in terms of helping business and helping the economy," he said.

Hahn has taken several steps in this area, including a money-back guarantee for "express permits" not issued within an hour of their request and the setting up of an online permit system.

Indeed, development reform is one of the major goals the Hahn administration has on tap as it enters its second year. "It's much more than permit streamlining," Kevles said. "We want to expedite projects through the environmental review process and do a better job of setting firm timelines."