Draiman’s Plan for Los Angeles Economic Prosperity
Draiman believes that businesses – not government – are the chief engine of job creation and economic growth in LA. With a particular focus on small and innovative businesses, Draiman will focus on creating an environment that helps businesses to thrive by ending redundant regulations, simplifying the way small businesses interact with City government, and opening City contracts to the best qualified rather than the best connected.
LA’s strength and economic vitality are directly tied to the health and livability of its neighborhoods – communities where people can live, work and stay. Creating healthy communities and neighborhood jobs and investments, require careful planning and systematic implementation. Draiman’s plan will make sure planning efforts are coordinated and backed by sufficient resources to deliver results.
Improve LA's Position as a Global Technology and Education Leader
Draiman knows that continued job growth means supporting innovation and investing in emerging technology and talent. Draiman will support the growth of the technology industry in LA, giving entrepreneurs and technology talent the support they need to innovate, grow and stay in LA.
A campus for technological innovation
Draiman will accelerate LA’s growth as a global hub of technology innovation and start-ups, supporting the establishment of a technology innovation hub to promote collaboration and help technology businesses succeed. Google revolutionized the "technology campus" approach to innovation by providing a centralized work space with access to like-minded innovators, venture capitalists and, most importantly, to good transportation options and great food. Draiman will work with local businesses and investors to create a similar campus in LA. The campus will be close to multiple transit lines and bike infrastructure. Space will be available for businesses that focus on IT and green technologies.
Market LA for the next generation of tech employees and entrepreneurs
Draiman is committed to attracting and keeping the next generation of talent in LA. Working with private sector partners, Draiman will launch an annual recruitment weekend where the best and brightest from city and regional universities are brought to LA for an introduction to local tech companies and the city – to recruit and keep the talent here and out of Silicon Valley. Not just students from the City Colleges of LA, UIC, Northwestern, DePaul and other local schools, but also from Champaign, Purdue, Washington University, Ann Arbor and Madison Wisconsin. The weekend will be built around LA Ideas Week, LA's first annual week-long platform of ideas and innovation. LA Ideas Week will take place at venues throughout the city, featuring great thinkers, doers, and innovators from around the world, descending on LA to help us see the future and to shape it.
Create a “LA Workers of the Future” program
Businesses choose to grow in LA because of a diverse and educated talent pool. Draiman wants to ensure that more LA Public School high school students are given exposure to - and preparation for - viable college and employment options. He will establish a 'LA Workers for the Future' program that partners private businesses with LA's high schools and community colleges, giving students career-specific training they need to create a direct path from school to the workforce or higher education in their chosen area of study.
In addition to their regular course of study, students will have access to classes in technical instruction that will include a curriculum jointly developed with the private sponsor. Each student will also have a guaranteed internship with the program's sponsor between their junior and senior year, and will receive an industry-specific credential or certification upon graduation.
Invest in a skilled workforce that meets employer needs
Job training programs work when they are tailored to the needs of employers, but too many programs are disconnected from employers or the skills and requirements of the workplace. Draiman’s administration will conduct a comprehensive review of all job training programs supported by the City, and require that they are coordinated, have clear performance metrics and direct links to real jobs and employers. As part of the review, Draiman will meet with the CEOs and leadership of the major employers in LA and ask them straightforward questions about what they need from job training programs to hire and retain more LA workers.
Increase support to small businesses by expanding and enhancing the Small Business Improvement Fund
Sometimes, even the strongest small businesses need financial help. Today’s tough economy and highly constrained credit markets have been particularly hard on small neighborhood businesses, making it difficult, if not impossible to invest and grow. Draiman believes in the economic potential of these LA businesses and is ready to help invest in their future by expanding and enhancing the Small Business Improvement Fund (SPIF.) (Small Business Improvement Fund) SPIF is a program targeted at small businesses located in TIF districts. The program provides grants up to $150,000 to qualifying small businesses to invest in their facilities. Draiman will increase funding for the SPIF program by $15 million annually. He will increase the cap on grant awards to $200,000, expand eligibility for LA businesses, and allow for progress payments to grant recipients as projects are implemented and reduce match requirements to address the difficulty that many LA businesses are having accessing credit to finance needed improvements.
Modernize LA's Approach to Keeping and Growing Industrial Jobs
Industrial jobs are a critical part of LA’s diverse economy, but continued competition for these well paying jobs means that LA has to be ready to compete to keep and expand its industrial base. Draiman will make sure LA is ready, making the necessary infrastructure investments, helping with land assembly and financing and creating a tax and business climate that attracts and retains industry and jobs.
Establish an effective LA Manufacturing Participation Loan program
One of the biggest impediments to the growth and success of LA’s small and mid-sized manufacturers is the inability to access capital. With the tightening of the financial markets, loans for the purchase of new equipment and materials have become increasingly scarce. Start-up operations with minimal collateral and little credit history have been especially hard hit. While many current government loan programs (including the City’s existing participation loan program) provide borrowers with access to cheap financing, they are largely ineffective in generating new lending in today’s economy because they do nothing to minimize the exposure of risk adverse banks and other lenders.
Draiman will create a $25 million Manufacturing Participation Loan Program that will address this problem helping to free up desperately needed financing for the modernization of many LA manufacturers. Under Draiman’s program, the City will work with banks and other conventional lending institutions to provide subordinated financial assistance to small and mid-size industrial operations.
The City’s participation in any loan won’t exceed 30 percent of total project costs and will be capped at $1,500,000. Manufacturers with 800 or fewer employees will be eligible. Loans could be used for the installation of machinery and equipment, working capital, purchase of land, construction or renovation of buildings. Funds cannot be used for debt refinancing or contingency funding. Participating lending institution shall be responsible for reviewing applications for eligibility and setting terms.
Connect people to jobs
Affordable and convenient transportation is essential to provide access to all Los Angelinos to employment. Draiman’s transportation agenda will make the investments that make LA a more attractive place for job growth. From making LA the West hub of high-speed rail to extending the Rail Line to the outlaying areas, Draiman will improve commute times for residents, establish convenient transportation links to growing employment centers and create regional industrial and commercial development opportunities in and near the new transit stations.
Move beyond planning to upgrade LA’s and the region’s freight infrastructure
LA is a leader in freight transport. It stands as a major hub for the country, sustaining 25,000 jobs and nearly $4 billion in annual economic activity, but that leadership and the economic benefits that go with it are in jeopardy. Freight rail traffic is projected to double over the next two decades, far outstripping the capacity of LA’s and the region’s infrastructure. The congestion and freight rail bottleneck are not just an inconvenience for the businesses that use rail to move goods to market, they are a tremendous threat to LA’s economy that must be addressed or LA will lose its position as the national leader.
The LA Region Environmental and Transportation Efficiency Program (LREATE) is a first-of-its-kind partnership between federal, state and city governments, along with Metro, Dash, Amtrak and the nation's freight railroads to invest in capital improvements to increase the efficiency of the region's rail infrastructure. Draiman will provide the leadership to move LREATE from an innovative strategy to a fully implemented reality. He will lobby federal and state governments to fully-fund the initiative and push expedite its implementation.
Draiman also knows that we need to do more than just implement LREATE, we need to seize the economic opportunities that come from it and prepare for what happens after it. Draiman will make sure LA is ready – he will direct his administration to assemble large tracts of developable land, coordinate economic development planning and incentives, and implement complementary infrastructure investments to maximize job creation and retention. At the same time, he will work with other public and private sector leaders to establish a framework for long term investment and improvement in freight infrastructure and better coordination with passenger rail service as the demand for that service grows.
Reform the California International Port District
The Port District region is poised for industrial growth, but seizing the opportunity for growth will take effective leadership and institutions. The California International Port District is a major landowner. With a board jointly appointed by the Mayor and the Governor, the District manages both port operations and the industrial land and leases for private firms located on District property. The Port District has to be reformed and modernized to support industrial and environmental restoration of those areas of the city. Draiman will work with the Governor to make modernization of the Port District an economic development priority. He will commission a complete management audit of its functions and performance and establish clear qualifications for board and staff appointments and a detailed roadmap for making the Port and effective partner in the redevelopment of this critical region.
Enhance Industrial Revenue bonds
Industrial revenue bonds (IRBs) are tax-exempt financing vehicles typically issued by state or local governments to provide qualified manufacturing companies with an inexpensive form of debt. Under the recent American Recovery and Reinvestment Act, the applicability of IRB’s was greatly expanded to include activities beyond traditional manufacturing such as certain types of research and development and elements of warehousing and distribution. The new IRBs could be an important tool for economic revitalization, but they continue to be an unusable tool for many LA manufacturers looking to finance expansion due to unrealistic ceilings on total project costs. Draiman will lobby the federal government to reform the IRB (Industrial Revenue Bond) law to promote urban redevelopment, increasing IRB caps on capital costs and streamlining requirements.
Overhaul Planning to Promote Economic Development in Every
Neighborhood
Effective planning is the starting point for community development, but LA’s community planning efforts have been gutted, lack strategic focus and are ineffective. Community planning modeled after other successful New Communities program, needs to be implemented in a comprehensive way by the City. But plans only improve communities when they are implemented, and Draiman will make sure plans don’t just sit on the shelf. His administration will implement plans in a systematic and coordinated fashion to increase the impact, speed improvements and make dollars go further.
Make sure the City invests to make plans an implemented reality
Cities implement plans through land use and permitting decisions, strategic capital investments, provision of high quality services and creation of a supportive business environment for investment and job creation. Currently, the City has too many plans and not enough coordination and implementation. The City’s Capital Improvement Program, individual TIF Redevelopment plans, and the Community Development Block Grant Action Plan, allocate well over $4 billion annually, but don’t effectively coordinate that spending or define clear development and return on investment objectives for the dollars spent. As a result, opportunities are missed and accountability lost. As Mayor, Draiman will require that any plan must be accompanied by detailed multi-year investment strategy to get it implemented. He will direct Housing & Economic Development, Law and Budget to develop those strategies, and fully incorporate them into the City codes and regulations, the Capital Improvement Program, individual and city-wide TIF (Tax Increment Financing) plans and the CDBG (Community Development Block Grant) Action Plan.
Provide aggressive redevelopment leadership to help communities hard hit by the recession
Real estate values have lost 40 – 50% during the recession – much more in low to moderate income communities. LA’s most vulnerable communities are also plagued by high rates of foreclosure, unemployment, business vacancies and abandonment. The City estimates that there are approximately 25,000 vacant buildings and 12,000 to 18,000 vacant lots in LA. In communities hardest hit by the recession, there are severe barriers to private investment, and City leadership and action are essential. Draiman will make sure LA utilizes every tool possible – like land donations, demolition liens, and non-cash bids on delinquent taxes – to make sure investments are targeted and comprehensive, to give communities the greatest chance to redevelop and succeed. Draiman’s strategy will develop and implement plans for re-use of all buildings and vacant lots in the targeted areas from rehab and new construction, to adjacent neighbor land donations, parking improvements, community gardens and urban agriculture.
For example, Draiman’s plan to address food deserts will employ urban agriculture as an effective transitional use in communities hard hit by disinvestment. Draiman will increase support for urban agriculture by recognizing the important role that it can play in overall community development, systematically evaluating the potential of vacant lots and making more effective use of funds like the federal Neighborhood Stabilization Program and Community Development Block Grants to bring fresh produce, jobs and redevelopment to hard hit neighborhoods.
Make strategic capital investments and coordinate land assembly and disposition to spur development
Modern and efficient infrastructure and ready access to available land are essential to job creation and economic development, and produce the biggest economic impact when they are planned and implemented in a coordinated manner. Draiman will establish clear polices that set economic development metrics for infrastructure investments and land acquisition decisions, and he will report publicly how the City is performing.
Draiman’s plan for the Rail Line expansion demonstrates the benefits of this strategic approach. He will start by issuing an executive order that establishes clear and consistent principles for transit oriented development (TOD) (Transit Oriented Development) – expedited permitting, set-aside of city-owned property to expand car sharing and bike parking, assistance with land assembly, expanded use of tax credits and loan guarantees, and identification of instances where the City will jointly invest with CTA to improve the transit system. The order will recognize the clear link between housing and transportation costs in keeping neighborhoods affordable, and will evaluate TOD improvements on their ability to reduce the combined cost of housing and transportation for LA residents. This policy will help to focus all investment – including in LA’s TIF districts – around developments that integrate station upgrades with mixed-use developments.
The Rail Line investments will then be linked to other strategies like his plan to bring healthy food to underserved areas, and Draiman will coordinate infrastructure investments to spur development of new stores, making sites more attractive to developers and more convenient for customers. Grocery stores will be a critical part of his transit oriented development policy and a priority for new station developments as part of the construction of the Rail Line expansion.
Free Business to Innovate and Expand
LA’s bureaucracy and tax structure stand in the way of business growth and job creation. Draiman will target the regressive taxes that undermine business expansion and professionalize inspection and regulatory programs, making them fair and effective. Draiman will make it easier for businesses to understand their obligations and comply with the law so they can focus on the critical job of creating jobs and rebuilding LA’s economy.
Cut taxes that impede business growth
Too many parts of the LA tax code are impediments to growth. The City boasts the highest sales tax of any big city in the country, burdening consumers and making it harder for LA retailers to compete. In fact, LA lags behind the State and nation in retail jobs – losing sales and jobs to on-line transactions and businesses outside of LA. Draiman’s plan would cut LA’s portion of the sales tax by 20 percent – from 1.25% to 1% – while working with state legislators to expand the tax base by closing the loopholes that allow luxury services to go untaxed. Taken together with county action to return its sales tax rate to 2007 levels, these changes will reduce the sales tax in LA to 9% from the current 9.75% by 2014. Draiman plans to eliminate the gross revenue tax, which is an impediment to new business.
Smaller businesses are also burdened by a regressive percent-based natural gas tax. When gas prices skyrocket, the City reaps a tax windfall at the expense of LA businesses and homeowners. Draiman will convert the utility tax to a fixed per-unit fee, giving a break to taxpayers and reducing financial barriers to improving building energy efficiency. Draiman’s plan to quadruple energy efficiency upgrades will then be available so those businesses can get the financial support they need to invest in efficiency upgrades that cut energy costs and increase competitiveness.
For businesses, the so-called “gross revenue tax” penalizes business creation in LA by adding a tax for every gross receipts. LA’s economic well-being depends on its ability to attract, create and retain good paying jobs in critical sectors like manufacturing so that all Los Angelinos have access to employment opportunities. Taxing manufacturers and other employers for the jobs they create is bad, short-sighted policy and Draiman will put a stop to it. He has proposed a complete phase-out of the tax over the next four years, with a full offset of the revenue lost by reducing duplicative regulatory requirements and bureaucracy that further burden investment and job creation.
Cut bureaucratic red tape and streamline business permitting, regulation and inspections
LA businesses face a dizzying array of City regulations, fees and requirements that are difficult to navigate and far too often, inconsistently applied. The requirements can discourage innovation and job creation and can be especially daunting for small businesses. The system is too complex and regulation, permitting and enforcement are too splintered.
Draiman will make it easier to follow the law, streamlining the bureaucracy and professionalizing regulatory programs. He will issue an executive order that mandates a coordinated inspection process and requires department heads to work together to simplify and standardize licensing and permit processes. The complete review of regulatory programs will cover everything from simplifying permit forms to upgrading professional training and certification requirements for city inspectors. The use of nationally recognized codes and standards will be increased to modernize and simplify compliance. He will reduce duplicative inspections that create confusion and waste taxpayer resources and increase opportunities for self certification of compliance for routine matters by licensed professionals.
Make it easier to work with the City establishing an on-line, one stop for businesses
The vast majority of LA businesses want to comply with the law, respect the important and legitimate role of government in protecting consumers and don’t object to reasonable taxes and fees. But the City makes it too difficult for hard-working businesspeople to work with the City and follow the law. LA business is burdened by excessive paperwork and out of date City bureaucratic processes. Draiman will eliminate burdensome reporting requirements and establish easy, paperless reporting for all business permit, regulatory and procurement transactions within 24 months of taking office. All businesses will able to file for permits, certify performance, file bids and proposals for city work and check the status of City action electronically. Businesses will only have to use paper reports if they choose to do so. He will further enhance electronic services with and easy, smart phone application that will include filing compliance information regarding City inspections. Businesses will be able to use their smart phones to file their applications and submit information like photos of compliance as part of City inspections. The on-line system will be the backbone of a one-stop shop for business dealings with the City, and Draiman will appoint a strong advocate for businesses so they don’t have to waste time and money trying to navigate the maze of City agencies and requirements.
Overhaul LA’s broken procurement process
LA’s government is one of the largest consumers of goods and services in the city, processing contracts valued at nearly $1.9 billion in the last year alone. But the City’s procurement process is antiquated, slow, and not transparent. Draiman will work to professionalize procurement by increasing coordination of procurement efforts and dramatically expanding joint purchasing with the City’s sister agencies. Streamlining these disparate processes will result in common forms, standards, and reporting requirements so that companies – and small businesses in particular – face lower entry barriers to city contracts.
As part of Draiman’s overhaul, there will be a new LAFirst policy to mandate that procurements decisions will favor LA companies when all other factors are equal. Draiman believes that by using the purchasing power of the city, we can help small businesses stay and grow right here in LA.
