City Hall and 'political lifers' are a 'roadblock,' Caruso says

Rick Caruso continued to play coy about his plans to run for mayor, but in the luncheon speech at Town Hall Los Angeles we told you about this morning he got in some jabs at the city's politicos. News coverage by Mark at LA Biz Observed, the L.A. Times, City Maven, LA Weekly. Some lengthy pull quotes from the prepared speech are after the jump.

Los Angeles has a special grip on our collective imagination. From the aspiring actor to the immigrant; from the entrepreneur to the student; people still find their way to Los Angeles to realize their dreams.

But we are also a city of nearly four million people and six area codes; a patchwork quilt of 500 square miles, spanning the rolling hills of Porter Ranch to the docks at the Port of Los Angeles. And as we’ve grown, so have the challenges of ensuring Los Angeles remains a vibrant and livable city.

I’m speaking out on these issues, because what’s happening to Los Angeles is painful to me. I love this city. I was born here, I went to school here, I’ve built my business here and I’m raising my family here.

And I’m frustrated that our current political class often seems to be incapable of even recognizing the scope of the city’s challenges – let alone addressing them. They look instead to the next election, the next fundraiser, the next ribbon-cutting or – in some cases – for tickets to the next sporting event.

The problems we’re facing will only grow in complexity and magnitude, if we don’t get it right today. If we’re going to create new jobs; or better schools; or a more livable city, we need a new kind of leadership for a changing Los Angeles.


We need decisive leadership, which brings people together to achieve meaningful change. We don’t need political lifers, who’ve held on to their government paychecks by glorifying process over results.

We need disruptive leadership, that’s unafraid of risk when it comes to making our city a better place. We don’t need accommodationists, who have an interest in preserving the status quo.

And we need demanding leadership, which reflects the seriousness of our city’s problems, and which operates with deep purpose and at a high tempo.

This is the time for strong, confident and creative leaders with vision; leaders who are bold and positive, and who can set a new tone and a new direction for the City. It also calls for compassionate leaders, who understand that our social safety net has become dangerously fragile. And I believe all this will only come from men and women who know how City Hall works -- but who haven’t been part of the problem.

That’s because City Hall is a roadblock that’s keeping Los Angeles from reaching its potential.


With all due respect, I’d say our job creation efforts in have been an abject failure. Who here thinks that Los Angeles is a “business-friendly” city?

One statistic alone can show you why change is so badly needed. Since 1980, the City of Los Angeles has added one million people to its population. In that same period it has not added ONE net new job. In fact, it has lost 50,000 jobs.

Compare that to other cities in Los Angeles County which have collectively added nearly 500,000 new jobs since 1990.

When it comes to jobs, the cities around L.A. are eating our lunch.

In some cases, if an employer is fed up with the City’s taxes and regulations, they can literally cross the street to another city that gives them what they need. Businesses vote with their moving vans, and the message they’re sending couldn’t be clearer.

A healthy, welcoming business environment is essential to the future of this city. The revenue businesses create help provide critical services to all the people of Los Angeles; that social safety net. That’s why retaining, expanding and attracting jobs must be a clear and urgent priority.

We need to reduce -- and eventually phase out -- the city’s gross receipts tax, which is regressive, anti-business, and has become an efficient job-killing machine. Imagine a tax that skims money off the top before a business ever makes a profit. Skimming off the top is what the mob used to do in Vegas, and has no place in L.A.

But taxes are only half of the problem. We also need to streamline the planning, development and permitting processes.


We were asked to consider putting in a bid to help design and lease the interior of the new Tom Bradley International Terminal, as well as some other terminals. We were excited about it, put together a world-class team, and spent nearly one million dollars on design work and planning. And then we sat, because the RFP never came out. Month after month of delays. Then the airport began to carve out big chunks of the plan, all for the wrong reasons, to the point where it was simply no longer a viable project for us to pursue.

By the time this contract is awarded, they will be a full year behind schedule. This is a contract that is worth millions to the city, would support lots of new jobs, and it’s a full year behind. Who is accountable?

Government simply can’t create private-sector jobs. Any politician who tells you it can is selling you something you don’t want to buy. What government can do is create the conditions where the private sector can thrive – and hire. And that’s where the City of Los Angeles has failed us.

That’s why we’ve needed so-called “job czars” and “business SWAT teams” trying to attract or retain businesses to the City. I’m happy for the limited successes they’ve had, but they’re symptoms of the real problem -- not a cure. A city with rational and progressive pro-business policies shouldn’t have to resort to gimmicks.
There aren’t any silver bullets. Big projects like football stadiums get the headlines, but no single project can even come close to having the same impact on our economy as smart, business-friendly reform of our tax and regulatory climate.

We must also educate people that the word “industrial,” as in industrial land use, is not a dirty word. It’s a green word – green and lush with jobs, tax revenues and growth.

And we must start by reviewing the structure of City government itself. There are somewhere around 40 City departments, bureaus and commissions – to be honest, I’ve lost count. It’s a bureaucratic nightmare.

Why do we have full-time paid Public Works Commissioners when we’re freezing police hiring, and cutting firemen and paramedics? Shouldn’t we identify functions that aren’t providing real benefits to our neighborhoods and get rid of them first before we stop hiring cops? Shouldn’t a hiring freeze on police officers or a reduction of firefighters be the last thing we do instead of the first?

Until we stop nibbling at the edges and enact significant structural reforms businesses will continue fleeing the city. It’s not glamorous work. But strong leadership usually isn’t.

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