Reprinted
Opinion
Downtown News
April 3 2006

March 29, 2006

Letters to the Editor

Los Angeles Downtown News

1264 W. 1 st St.

Los Angeles , CA 90026

VIA FAX: 213-250-4617

VIA E-MAIL: realpeople@downtownnews.com

To the Editor:

Your article this week, “The Industrial Crisis,” focused on the economic factors driving the conversion of industrial land citywide, but especially Downtown. The situation is influenced by more than market forces, however, as noted in your article by Planning Commissioner Michael Woo. Any analysis of Central City East’s industrial viability requires an understanding of both the history as well as the future of manufacturing in Downtown Los Angeles.

As a 21-year organization representing 75% of downtown’s industrially-zoned land, the Central City East Association (CCEA) has a unique understanding of the wide-ranging issues that have played important roles –some positive, some negative-- in transforming our industrial zone.

Fact # 1
Industrially-zoned land in downtown has always been home to many non-industrial uses.
Industrially-zoned land has always been used for commercial (retail and wholesale), institutional and residential uses, including low-income housing and social services. The newer pressures on industrial land are not solely residential – institutional/government users actually represent the greatest source of conversion. For example, four new downtown schools will occupy 82 acres of commercial and industrial land that could have created significant employment.

Fact #2
The majority of industrial employment in downtown LA is not traditional manufacturing.
According to a 2005 Kosmont study, Central City East is home to an estimated 33,000 industrial jobs. Only 1/3 of these jobs are manufacturing jobs, which usually requires industrial (M or CM) zoning. 2/3 of these jobs are in wholesale trade, which frequently does not require industrially-zoned land. Furthermore, many large, multi-story buildings are creating few or no jobs. They are used solely for occasional filming or storage – because they are not suitable for modern industrial uses.

Fact #3
Many industrial uses operate on non industrially-zoned land.
According to the City’s own 2004 Industrial Development Policy Initiative (IDPI) Study, 7,272 acres of non industrially-zoned land in the City of LA are used for industrial purposes. This reflects two things: the predominance of wholesale trade, and an overall trend toward cleaner industry. For example, both the printing industry and media production have transitioned to digital methods. As a result, many of these uses are “clean industrial” and no longer need industrially-zoned land.

Fact #4
Manufacturing employment is declining throughout the nation.
Globalization is driving the decrease in manufacturing employment. The costs of labor and related costs of doing business are cheaper in other countries. The U.S. has huge trade deficit with other countries. In 2005, nearly 2/3 of cargo containers leaving the Port of LA were empty. These issues are major factors. Land use and zoning play a relatively small role in determining where businesses locate.

Fact #5
The City of LA has neglected its industrial base for decades.
Industrial lots have been subdivided to the point where site assembly is financially infeasible. For example, only two parcels within the Central Industrial redevelopment project area are larger than 10 acres, while 72.2% of parcels are less than ½ acre.

The streets of industrial downtown are inadequate for modern distribution needs. The City is not only unable to widen them, but has never made it a priority to repair potholes, repave streets, or install left-hand turn signals to facilitate truck movement. We have industrial users who have been on the City’s “waiting list” for street repaving for 10 years.

The M-3 zone has been abused. Downtown LA is no longer home to smokestack industries that needed the M-3 zone. M-3 zones are now fertile ground for the “by right” development of strip clubs, pallet yards, tire yards and recyclers.

Fact #6
Live/work housing creates jobs, and is not necessarily incompatible with many industrial uses.

The City has allowed ad hoc conversion for decades. There are now more than 30 existing artist-in-residence projects east of Alameda. These represent small businesses that have created tax revenue and quality jobs --- often in buildings that had not supported jobs for decades. People who want to live in this industrial area are attracted by large units that are conducive to operating a home-based business, and the energy of a thriving arts/creative business and manufacturing community. The downtown industrial area is becoming a microcosm of California, where small businesses account for 98% of all employees. As seen in Downtown News earlier this month, GoldSign is a jeans manufacturer that employs 40 people and operates from a three-unit loft in Toy Factory Lofts. Newer residential offers the opportunity to create a synergistic jobs/housing balance.

These issues represent the reality that CCEA members have faced for decades. We share the City’s concern for the fate of industrial land, and look forward to working collaboratively with the City to develop practical, sustainable strategies. As the process moves forward, we will continue to advocate passionately for an expedient yet inclusive process, and for a swift resolution of a critical dilemma.

Sincerely,

Estela Lopez

Executive Director