REMARKS BY AUSTIN BEUTNER AT TOWN HALL LOS ANGELES
“LOS ANGELES BACK TO WORK” JANUARY 19, 2012
I'm not sure if anyone in this audience caught the Golden Globes recently, but I noted with interest a silent film called “The Artist” was a winner.
Certainly encouraging for me as I'm never the loudest one in the room.
It also struck a chord with me because in Los Angeles we hear so much about the problems we face yet there is so little action – nothing seems to get done.
We hear about failing schools, broken streets and sidewalks, budget deficits and the lack of jobs.
It’s time we start hearing about solutions.
It’s time our government starts solving problems.
And it’s time we recognize our potential as a great city of the 21st century. We have everything we need right here. We are the most diverse big city in our country, with institutions of higher learning second to none. We are the only city in America that owns a port, an airport and a utility. We are the window to Asia and Latin America.
With strong leadership we can and we will find a way for every Angeleno to realize the promise of a good education, a good quality of life with safe neighborhoods and decent transportation, and good-paying work to support a family.
Before Henry Ford made cars affordable a century ago – if you asked government what we needed, they would have told you a faster horse. Los Angeles city government needs to stop trying to sell us on the promise of faster horses. It’s time to do things very differently.
We are in the fifth year of a recession, with unemployment around 13%. Add in those who have given up hope and are no longer looking for a job, and almost 1 in 5 Angelenos are out of work.
I grew up in Michigan and remember family trips to Detroit – a city of almost 2 million – where schools were good, city services worked and people had good-paying jobs. Today, Detroit’s a shell of itself, barely 700,000 people. The story is simple – the jobs went away, the tax base disappeared and people left.
Make no mistake, there are many challenges facing our city – education, public safety and transportation – among others. But, the top priority of our next mayor must be getting Los Angeles back to work.
A good-paying job is a source of pride, allowing an individual to provide for one’s family – helping kids get a good start in life. Jobs also provide the tax base to support the services government has to provide.
I spent 30 years in business and only 15 months inside City Hall, but I was there long enough to know we must change the way city government does business. We need to bring transparency and accountability to City Hall.
The politics of empty talk, forgotten promises, and impractical ideas have to become a thing of the past. It’s going to take new leadership with the ability to see a problem, find a solution, and most importantly get the job done. Any discussion of how we realize all that Los Angeles has to offer is not simple, and cannot be captured in a sound bite. The opportunities are many.
I want to focus today on six ideas that can make a difference.
Our first opportunity is trade, one of the region’s largest employers. It’s time we recognized our city’s potential in the global economy of the 21st century.
Our population is the most diverse in the country, with over 200 languages and dialects spoken here – everything from Spanish to Hebrew to Mandarin. The BBC once said, America’s second-largest city is also “the second-largest Mexican, Armenian, Filipino, Salvadoran and Guatemalan city in the world.” And they left out a few – we also have the largest number of Japanese, Koreans and Cambodians living in the U.S.
There is an untapped asset in our diversity – a strength we can use in the global marketplace. Angelenos can benefit from the trade of goods, services, and overseas capital, which will invest here and create jobs.
I am speaking from personal experience. I started a company in an office the size of this stage and built a business with customers around the world – U.S., Latin America, Asia and Europe.
Let’s start with our gateways to the world – LAX and the Port of Los Angeles. LAX is the first thing seen by visitors to our city. It ought to be a world-class airport. With our roots in the creative industry – film and music – imagine an airport where The Grammy Museum meets MOCA meets Universal City Walk.
Instead, LAX has fallen to second-tier status. LAX has 50% less commercial space in its terminals than other airports. A consolidated rental car center, proposed a decade ago, remains strangled by bureaucracy.
Have you ever been through a security screening at LAX? Enough said. How about we replace the federal government screeners from TSA with people we hire locally? San Francisco did it. I have the ideal candidates in mind – our returning veterans – men and women who served our country and are well trained to keep us safe.
There is much work to be done at our port as well.
In 2014, the Panama Canal expansion will change the face of global trade. A rising tide lifts all boats, but L.A is not rising to the occasion. Take, for example, BNSF’s proposed rail facility. It’s a $500 million project that will create many jobs. However, it’s taken seven years just to produce an environmental impact report. That EIR – it’s over 4,700 pages – is five times as long as the Old Testament.
We need a plan to make San Pedro a tourist destination with hotels, restaurants, and seaside amenities.
We need to increase trade. 80% of all consumers live outside the U.S.; yet only a small fraction of businesses in L.A. are exporters.
Businesses need help to navigate the complex web of city, state and federal export regulations. As First Deputy Mayor I helped start the Los Angeles Regional Export Council with support from the Brookings Institute. The idea is to coordinate federal, state and local agencies to increase trade. My team also created a pilot program with the city of Shanghai to increase two-way trade between our two cities. The idea was simple – help an exporter from Shanghai open a sales office in Los Angeles, or help an exporter from Los Angeles get permits to operate in China. Let’s take this idea to Busan and other cities around the globe.
Trade is not just containers and cargo... it’s also content. International investment will provide jobs building factories and making movies. That’s right, movies. The biggest new source of incentive money for filmmaking is EB-5. EB-5 is a federal program to attract overseas capital to the U.S. to invest in job-creating projects. There is over $150 million available. That’s more than the entire State of California’s film incentive program offers. The project is stuck in government limbo – it’s time to get it unstuck.
Our second job creator: technology and education.
The two are linked.
“Silicon Beach” is the emerging technology hub of Southern California. As First Deputy Mayor, I led an effort to reform the city’s internet business tax. That is what helped keep 300 jobs at Shopzilla in Los Angeles. But helping existing companies to expand is only one piece of the puzzle.
The foundation of our technology community is our intellectual capital – biologists, chemists, aerospace engineers, and our universities. USC, UCLA and CSUN boast a collective 8,000 advanced degrees. Recently, Caltech was named the world’s leading research university.
As USC President Max Nikias has said, “The queen of the sciences in the 20th century was physics – and as a result, electronics. This century is poised to be the Age of Medicine and
Biology.” Los Angeles has one of the largest biotech research and development communities in the country. That’s a good foundation. How can we build on it?
San Francisco took a rundown shipyard and turned it into a biotech magnet – UCSF Mission Bay. Why not aim even higher?
Just ask New York’s Mayor Bloomberg. He told the world’s leading universities to make an offer to come to New York City. The best gets to build a life science campus on Roosevelt Island. The idea is simple: take an underutilized piece of government land and turn it into a massive job creator. New York is getting 2 million square feet dedicated to classrooms, labs, conference centers and student housing. The project will create thousands of jobs, hundreds of spin-off companies and $20 billion in economic activity.
Let’s do that in Los Angeles – partner with educators and embrace the future. This will create jobs for all of the people who live in our city, not just a scholarly few. Construction workers will build it. High school graduates will work there. PhDs will invent the future there. It sounds like common sense, but too often government loses sight of what is important.
Take the case of our largest private employer, USC. Not once but twice over the last decade they have seen their efforts to invest billions and create jobs in our community either slowed down or stopped by government.
Several years ago USC invested $500 million to upgrade its medical center and proposed adding a bio-medical research facility. The new facility would have generated $1 billion in economic activity and thousands of jobs. But instead of being met by the welcome wagon, SC had the door slammed in its face by local government.
Today, USC wants to spend $1 billion on University Village, providing services for the surrounding community and creating thousands of jobs. Estimates are it will take five years to get started. Five years to get a green light on construction? It takes less time to get a degree from USC.
Our universities are not just our pride and joy, they are our future. It’s time government treated them with the respect they deserve.
Community colleges are just as important.
Los Angeles has the largest community college network in the nation, but we can do a better job of connecting students with employers looking for skilled workers. During my time at the city, we created an intern program for auto mechanics. Community college students now work alongside master mechanics at auto dealers. The students are earning permanent jobs when they graduate.
This program started when I made a sales call to auto dealers and was surprised to learn they were having trouble finding entry level employees. Strange, in a city where many cannot find work. We convened a meeting of dealers and community college heads and convinced
them to work together. It’s making a difference, and shows what can happen when you start listening to the needs of employers.
Our third opportunity is our largest employer – tourism.
We have world-class destinations...Venice Beach, The Getty, LACMA, the Reagan Library, La Plaza, Rodeo Drive, Magic Mountain...too many to name. That’s a winning hand – but we can do better.
Believe it or not Los Angeles, Beverly Hills, and Santa Monica don’t work together. Imagine a tourist office in London being visited on successive dates by officials from these different cities – does not make much sense. Our cultural institutions do not pool resources to make their dollars go further. And none of the above work with the two largest tourist draws – Disneyland and Universal Studios.
We are one community and we need to work together.
Just four years ago New York City replaced its tourism office with a new public-private partnership headed by a top advertising executive. Since then, New York City has added six million more visitors while Los Angeles added fewer than one million. Six million versus one million – sounds like we can learn from them.
Let’s replace LA. Inc., the city’s tourism and marketing arm, with something to give our competition a run for the money. Let’s call it “Destination: L.A.” We will get the best minds from our businesses and cultural institutions to draw up a plan. And we will hire the best Los Angeles has to run it.
Let’s convince a business traveler to stay an extra day and visit the Getty and MOCA. Working together, we can convince visitors who come to a Super Bowl at Farmer’s Field to visit Griffith Park. I have discussed this with leaders throughout the region, from Disney to the Santa Monica Chamber of Commerce; from the City of Beverly Hills to the California African American Museum. They all agree this will bring more tourists and will create jobs.
Another piece is Farmer’s Field – that project is a winner. It starts with our convention center. Currently, the two halls are not connected. Have you ever tried to book convention customers in the South Hall? It’s like telling your teenagers they have to sit at the kids’ table at Thanksgiving.
Farmers Field will change that – giving Los Angeles the nation’s fifth largest convention center. The covered stadium will allow us to compete for Final Fours, World Cups, and the 2017 Super Bowl. Imagine the 50th anniversary of the big game, being played in the city of its birth. Farmer’s Field means at least twenty thousand jobs and it won’t cost taxpayers a penny. Not one penny.
Our fourth opportunity is manufacturing.
Remember when “Made in L.A.” wasn’t something you read on the closing credits of “Keeping Up With the Kardashians?”
Goodyear’s tire plant in South L.A., GM’s Van Nuys auto plant, Rockwell’s Downey facility... They are long gone.
We need to attract a new generation of manufacturing jobs. We offer an experienced workforce and a big local market and can leverage those assets to our advantage.
One example – electric buses. As First Deputy Mayor, I brought the headquarters of the Chinese electric carmaker BYD to Los Angeles. It was the first time in years a company opened its headquarters in L.A. and it opened the door to something even bigger. The future is not the buses we buy today, the buses that run on compressed natural gas – it’s electric buses.
They’re cheaper to operate – and cheaper means our dollars will go further and bus riders will save money. Electric buses run cleaner, reducing greenhouse gas. These reasons are why, as First Deputy Mayor, I created a pilot program at MTA to test electric buses in L.A. Currently, we buy buses from Alabama and Minnesota. No jobs for Angelenos there. But the first city to place a big order for electric buses? They are going to get a manufacturing plant, creating thousands of jobs. And Alabama and Minnesota? They will be buying from us.
I started our electric bus program a year ago, but Metro still has not ordered a single bus. Instead, it’s mired in red tape. Our buses are supposed to run on time. So should Metro.
That leads us to our fifth job creator: transportation.
California was built on investment in education and infrastructure. It was a winning formula – investment in education and infrastructure created jobs and a decent quality of life. We have gotten away from those principles.
Our own Bureau of Street Services says we should have spent almost $300 million per year on our roads for the last decade – we spent on average about $50 million. Anyone wonder why our streets are the nation’s worst? Half of our sidewalks are in disrepair...our trees are not trimmed.
As First Deputy Mayor, I put 18,000 miles on my car visiting employers. I lost count of the hours I wasted in gridlock on the 101. But what we are doing in the name of “improvement?” Well, it makes no sense. We are spending $1 billion to add 10 feet of asphalt to the 405 – though I cannot find an expert who says it will fix the problem.
In contrast, Washington D.C. is linking their metro with Dulles airport – transporting commuters and tourists straight down the middle of their freeways and into their city. Why not light rail down the middle of our own freeways?
We want a bike-friendly city. What does the City deliver? A 35-year plan.
It took Tolstoy one year to write “War and Peace,” four years for physicists to assemble an atom bomb, eight years to answer JFK’s call to land a man on the moon, and it took Dick Riordan three months to fix the 10 freeway after the Northridge earthquake. Why is it going to take 35 years to make us bike-friendly?
We extol the virtues of light rail, but don’t include a stop at Leimert Park, the center of the city’s African American arts scene and home to many folks who could use a ride to work.
Angelenos deserve a transportation network that works – creating jobs to build it and laying the foundation for a decent quality of life in the years to come. Here is how we get there – an infrastructure program I call “CONNECTING Los Angeles.” One part common sense, one part technology, and one part investment.
How many of you have lost a tire or a hubcap after hitting a pothole? Let’s use technology to create an iPhone app like New York City to ensure potholes are fixed. The app allows you to report, track, and verify your request has been handled. It works. Have you tried the City’s internet approach? When you “point and click” you get answering machines in government offices, not results. Steve Lopez isn’t the only one whose repair has been put on hold.
Rebuilding our roads and sidewalks won’t be cheap. It’ll cost a lot of money – $3-4 billion – and we will have to spend more than that if we want public transportation that really works. Not coincidentally, that’s the same sort of money Angelenos will have to spend as a down payment towards high-speed rail.
Despite its lofty promises, the reality is high-speed rail is a boondoggle – a solution in search of a problem. The project was promised to cost $40 billion. It’s now on track to cost in excess of $100 billion. Revenues were supposed to cover operating costs. That will not happen. It’s time to put a bullet in high-speed rail and invest those dollars where they are needed – in local transportation right here in our community.
Finally, we cannot have a conversation about L.A.’s future without discussing the backbone of our economy – small business.
Hundreds of thousands of small businesses employ most of the people who work in our city. City Hall should serve the needs of small business owners, but it does not. Too often our city takes a small business owner’s dream and turns it into a nightmare of taxation and regulation.
As First Deputy Mayor – in a matter of weeks, start to finish – I brought together a coalition and created a business tax holiday. It brought jobs to Los Angeles. Some career politicians in this town have jumped on the bandwagon. They want to cut the business tax. They want to be seen as friends of small business.
To anyone who has been in office for years, but who only now is seeing the light, we have to ask... Didn’t you create these problems? Where have you been?
Let’s reduce the business tax and pay for it through spending cuts. And let’s cut the red tape and regulations.
Just ask my friends at Pear Garden Produce, a family-owned business in East LA. They are America’s largest exporter of rice cakes, with nearly half their sales from overseas. Two years ago, on the eve of the Chinese New Year, Pear Garden was being forced out of L.A. I directed my office to step in and streamline the inspection process. It enabled Pear Garden to open a new facility, and saved 20 jobs.
Let’s treat employers as valued customers – finding a way to help them succeed. We need a new approach – what I call “Regional Jobs Centers” – each a one-stop shop for permitting and providing assistance to businesses. Let’s locate them where the employers are – Van Nuys, El Sereno, Watts, Mar Vista and San Pedro. The centers should be open nights and weekends, with services available online.
We need to make Sacramento part of the solution as well. Businesses in California are seeing out-of-control increases in workers’ comp costs. A business owner with 800 employees in the Valley told me workers comp now accounts for more than 10% of his wage costs – versus costs of only 2-3% in most surrounding states. California employers are left with one of two bad options – reduce payroll, or leave the state.
I have laid out an ambitious agenda, many areas where we will create jobs.
Some will say we cannot do it. These same people will choose rhetoric over results, and press conferences over progress every time. The career politicians in this town will continue to extol the virtues of faster horses.
After all, they have spent their entire careers living in the barnyard called City Hall. It’s a conversation for another day about the barnyard odor from the way business is commonly conducted at the corner of 1st and Spring...
Earlier I spoke of an auto intern program. I recently met with one of the graduates. The internship helped him stay in school and get a job when he graduated. Today, he supports his family and is proud of the work he does. He’s a perfect example of how government can make a difference in people’s lives.
The ideas I have shared today are a start, but I would be remiss if I did not mention the most important difference between rhetoric and results.
Ask yourself: Who has the ability to take this city in a new direction? Who brings real world experience and a track record of getting things done? Who brings independence and is not bound by ideology or special interests?
Call me old-fashioned, but I come from a time when public service was an honor – an honor based on a record of true accomplishment. Holding office was a temporary stop on a longer path through life. It meant a sacrifice of time and income. It was a life choice, not a lifestyle.
Twice in my life, I have volunteered for public service – both times, at the government’s request. President Clinton asked me to help rebuild Russia’s economy. Mayor Villaraigosa asked me to do the same for Los Angeles.
No one is going to confuse me with the bodybuilders on Muscle Beach. But it’s time to fix this barbell economy of ours – a “barbell” with income heavily weighted on the two ends, rich and poor, with a disappearing middle class in between.
Change won’t be easy, and it can’t be done alone. This is not about “me,” it’s about “we” – all of us working together. Please work with me and let’s get Los Angeles back to work.