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President’s Message
 Leron
Gubler, President & CEO
2008-01 | A
Year of Challenges Ahead
2007-09 |
Sacramento’s Inaction Could Threaten a Vital
Industry
2007-05 |
Chamber’s Advocacy Role Paying Off
2006-11 |
Advocacy is our Top Job
2006-07 | What a
difference a dozen years make!
2006-04 | There is
a need for Eminent Domain Powers
2006-02 | Building
a strong economy
A Year of Challenges Ahead
We are concerned and want to help any way we can.
While it is difficult to predict the future with any
accuracy, I can offer one prediction with confidence
– that there will be an important role for the
Hollywood Chamber of Commerce to play in 2008 in
working for our members.
It appears that the year 2008 will be much more of a
roller coaster ride than we have faced in many
years. Certainly the uncertainty of the continuing
slide in the real estate market nationally, and the
potential for lengthy strikes in the entertainment
industry are not good news.
Almost everyone we talked to about the coming year
was nervous about some of these unpredictable
issues. However, one thing we do know is that
Hollywood has come a long way in the past several
years. We are much better positioned now to face a
downturn than we were a decade ago. The Chamber has
been working nonstop over that time for the
renaissance of this community. Despite the potential
for short-term disruption to our economy, I feel
that Hollywood’s long-term outlook remains bright.
Having said that, we are very concerned about our
many small businesses that could be devastated by
lengthy strikes. The Chamber will be looking for
ways to help develop new business for our community.
One project that is already proving its value is the
Hollywood Shopper, a direct-mail piece that the
Chamber distributed for the holidays to allow our
members to reach the Hollywood residential community
for a reasonable price. We felt that there was a
need to offer this service to our members, as
traditional advertising methods were too expensive
for the average small business to afford to reach
this market. The initial feedback we have received
has been very positive from our advertisers. We are
now planning a second direct mail piece for this
spring.
What this example demonstrates is that there are
opportunities for our members to benefit when we can
pool our resources. With nearly 1,000 members, we
are a lot stronger together than we are as
individual businesses. As the year proceeds, we will
be looking for other ways to serve our members’
needs.
If you have an idea on how the Chamber can assist,
please feel free to email it to me at:
leron@hollywoodchamber.net. Certainly the
writers strike and potential for additional strikes
later in the year could be a threat to the viability
of many of our small businesses that interact with
or depend on the entertainment industry. We are
concerned and want to help any way we can. Let’s all
work together to keep our Hollywood community a
vital and prosperous place to do business.
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Sacramento’s Inaction Could Threaten a Vital
Industry
Many seem to take
the entertainment industry for granted
Back in the early part of the
20th century, the motion picture industry began on
the East Coast – in places like New York and New
Jersey. However, the pioneer film companies were
reliant on natural sunlight – of which there was a
distinct shortage at certain times of the year, and
so they searched for better locales to base their
productions. They were drawn to Southern California
with its mild, year-round good weather – first to
Downtown L.A. and then to Edendale (now part of Echo
Park). By 1911, they had arrived in Hollywood, and
the industry became synonymous with the community.
Hollywood is proud to be called
the home of this world-famous industry, but as we
all know, the industry long ago grew beyond the
confines of our community. It spreads across the
length and breadth of Southern California and has
been an economic stimulus to the entire region and a
major source of tax revenue for the State of
California. However, many seem to take this industry
for granted. Let me tell you, sunny weather alone is
no longer good enough to keep the industry here.
There are some legislators,
mostly in Northern California, who do not seem to
recognize the importance of this industry to the
entire state. They have stymied all efforts to craft
a package to fight runaway production. Even here at
home, our own Los Angeles Times has editorialized
against the State providing tax breaks to the
industry, charging that one industry should not be
singled out for special favors.
Earlier this year, Film L.A.
reported that feature film production in L.A. is
down 36 percent since 1996. Meanwhile, in 2006, a
total of 16 out of 28 states that currently offer
financial incentives either enacted them for the
first time or significantly sweetened what they
offered.
Incentive packages offered by
other regions include a 15 percent tax credit in New
York, a 20 percent credit in New Mexico, and a 25
percent credit in Louisiana. Internationally, they
range from a 12.5 percent rebate on qualified
spending in Australia to federal and provincial
labor tax credits in Canada that can exceed 45
percent.
Mayor Villaraigosa, in a column
last year in the L.A. Times reported that only 11
percent of all feature films are being made in
California. And why should they, considering what
these other states are offering?
A California Film Commission/LAEDC
study estimates that a $70-million feature film
generates close to $11-million in state taxes, and
can pump up to $200-million into the local economy.
How much clearer can we get?
What will it take to convince the California State
Legislature that by doing nothing, they are losing
millions of dollars in potential tax revenue to
other states – tax revenue that just might help to
close the billion dollar deficits that the State has
been running?
This month, our annual
Entertainment Industry Luncheon will focus on the
issue of why we cannot seem to get any traction in
Sacramento on what has become a serious problem. We
have put together an excellent panel of experts to
discuss the issue. We invite you to come out and
show your support of our entertainment industry.
Let’s ensure that the future of
the entertainment industry is written here in
California, and not in some other state or country.
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Chamber’s Advocacy Role Paying Off
Our efforts to
build a strong economy and to look at the “big
picture” earned us praise
Several years ago, our western
regional chamber association undertook research to
study how chambers of commerce are perceived by our
members and how we can improve our image. The
research revealed that chambers were not
communicating in terms that meant a great deal to
businesses.
Since that time, we have worked
at the Hollywood Chamber of Commerce to improve our
communication and to emphasize the work that we do
in advocacy for our members – whether it is fighting
for a strong business climate, promoting Hollywood,
providing networking opportunities, or representing
the interests of business.
In 2004, we conducted a
benchmark survey of our members to see how we were
perceived. We have just completed the same survey
again, and I am happy to report that we have made
marked progress, with perceptions of the Chamber
improving in every category.
Of particular interest to me
was that we ranked in the top 10 percent of chambers
in the West as far as our members believing that the
Chamber is relevant to their own business. Too
often, businesses think that the Chamber may be good
for the community or other businesses, but not for
their own business, so it is gratifying to see that
our members are recognizing the work that we do for
them.
The survey also measured what
is known as the “performance gap” between how
important our members feel certain tasks should be
versus how we measure up to those expectations. In
2004, we had a 37 percent performance gap on how
effective businesses expected us to be on
strengthening the economy. This year, that gap had
shrunk to 16 percent, as opposed to a 36 percent gap
in other chambers. On providing networking
programs, we exceeded expectations by four percent,
compared to a negative five percent gap in other
chambers.
I believe the survey validates
my own observations that the Chamber is more
respected today than it has been in many years. A
few examples might be of interest. When I testified
before the Board of the Community Redevelopment
Agency a few months ago in regards to our freeway
cap park project, one of the commissioners stated
that she thought the Hollywood Chamber of Commerce
was the most effective chamber in the county. It is
rare for a chamber to receive such praise. I am
sure it is our efforts to build a strong economy and
to look at the “big picture” that earned us such
praise.
Recently, the Chamber honored
Helmi Hisserich, who was named by Mayor Villaraigosa
to the new position of Deputy Mayor for Housing and
Economic Development. Helmi was very complimentary
to the Chamber and paid tribute to the work we are
doing. She said that she would be advocating for
the Hollywood Chamber to be involved on citywide
issues.
The respect that the Chamber
has earned is capital that we can use to better
represent our members, because after all, that is
our chief mission – to represent your interests.
We have a wonderful team of
great volunteers and an outstanding staff to achieve
our mission. With such a team, we cannot help but
succeed. Thanks to everyone who makes our success
possible.
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Advocacy is our Top Job
Our major thrust
is now to show you what we have done on a weekly
basis:
It may be a phone call or letter to the right person
in government, or testifying
at a public hearing, but we are always out there
fighting on your behalf.
I am surprised occasionally
when I hear that some business won’t join the
Chamber because they say they would get no benefit
from it. Now, while they may not be able to trace a
dollar received at their cash register back to the
Chamber, the fact is certain that, in the long-run,
the things that the Chamber does, affect the bottom
line of every business in Hollywood.
The Hollywood Chamber’s number
one job is Advocacy on behalf of the businesses of
this community. You may recently have noticed a new
look in the Chamber’s weekly online newsletter and
in our news magazine, including a name change to the
Hollywood Business Advocate. We have made
adjustments to better reflect what we are doing for
you.
While we still list special
upcoming events and promotional opportunities for
our members, our major thrust is now to show you
what we have done on a weekly basis to advocate on
your behalf. I think you will be impressed as you
see the breadth of the Chamber’s activities.
Let me point out just a few
current examples. After five long years, the
Hollywood & Vine project is finally breaking ground.
This $500-million development is going to be a
catalytic project for that area of Hollywood. I
could not begin to tell you how many meetings the
Chamber testified at, how many letters we wrote, and
how many public officials we lobbied to overcome the
obstacles to progress. The Chamber played a key role
in keeping up the pressure so that the project kept
moving forward.
With all of the new development
coming in to Hollywood, one of the major topics of
conversation is quality of life and how the
community will be affected. We believe that it is
important to show that the new investment in
Hollywood will improve the quality of life here. For
this reason, the Chamber has been the leading
champion of building a cap over the Hollywood
Freeway where it is below grade to create a 24-acre
park. Don Scott’s task force, with assistance from
our V.P. of Public Policy, Rochelle Silsbee, has
done an amazing job moving this initiative forward.
The proposal has been warmly received by just about
everyone who has had it explained to them. Numerous
contributors have stepped forward - from the City,
CRA and private sector – to get the initial study
underway.
In only a few days, you will
have the opportunity to vote on the many measures on
the California ballot. The Chamber, through its
Legislative Action Committee, has thoughtfully
researched and studied each of these from the
standpoint of the business community. Many of these
measures will hit you in the pocket book. Which ones
should we support and which ones will harm the
business climate? We have produced a Voters Guide to
share with you our recommendations. Let me touch on
a few of these.
Proposition 89 is a blatantly
anti-business initiative that would raise taxes on
all incorporated businesses and financial
institutions to fund publicly-financed campaigns.
While it raises $200-million from business to fund
this program, it then turns around and limits
campaign contributions from business. If enacted, it
would effectively muzzle the business lobby, making
it easier to pass anti-business legislation in the
future.
Proposition 90 is being touted
as a way to prevent local governments from taking
private property through eminent domain to benefit
private developers. In reality, it goes far beyond
that by requiring government compensation to reflect
the value of the property after the new development
is completed and makes it very difficult for
government and utilities to build the basic
infrastructure that cities need. A similar measure
in Oregon has literally led to thousands of
lawsuits, which citizens’ taxes will have to cover.
As I have said before in this
column, there is a place for eminent domain. It is a
power that redevelopment authorities need to have in
order to turn around run-down districts - a power
you need to have but want to only use as a last
resort. It is an issue often caught up in
emotionalism. A case in point was recently
demonstrated in connection with the Bernard’s
Luggage property in Hollywood. Fortunately,
negotiations led to an agreement that was acceptable
to everyone, but it was the threat of eminent domain
that finally brought the parties together to find a
solution.
As is often the case with
propositions, there are hidden consequences of the
measure that are not obvious on the surface. The
restrictions in Proposition 90 would severely hamper
local jurisdictions’ land-use authority. Business,
government, environmental groups and labor unions
have all come together to oppose this measure as bad
public policy.
The Chamber has gone on record
supporting the State infrastructure measures – 1A-E.
There is so much deferred maintenance in California
that simply must be addressed if we are to have a
healthy business climate in the future. With the
State’s rapid population growth, we cannot afford to
put off these improvements. This may be our best
chance of getting the electorate’s support in more
than a generation.
There are numerous other
examples of how the Chamber advocates for its
members. It may be a phone call or letter to the
right person in government, or testifying at a
public hearing, but we are always out there fighting
on your behalf. And whether-or-not you notice it
today in your pocketbook, I assure you that we are
making a difference for you. What we do for you
today will definitely affect your pocketbook in the
future.
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What a
difference a dozen years make!
A statement made by Ira
Dankberg at the 2006 Hollywood Economic Development
is very telling. He noted that when we started this
event about 12 years ago, we had to practically
“beg” people to attend in order to attract an
audience of 75 or 80. Then, all we had to tout was
the arrival of new fast food restaurants. By
contrast, this year we are talking about more than
$1-billion in new investment just along Vine Street,
and we had to turn away a crowd far exceeding the
capacity of our venue.
For those of us who have been
working on the revitalization of Hollywood, it is
nothing short of remarkable to contemplate the
changes that have occurred. Perseverance has
definitely paid off. Then, reporters were writing
the obituary on Hollywood. Today, Hollywood is
described as leading the charge into the future.
I believe we have finally
reached the tipping point where critical mass has
been reached and the revitalization of our community
is surging forward on its own accord. Of course, it
is never wise to get too comfortable, lest we be
surprised by a changing economy, unanticipated
circumstances or a new kid on the block, but we do
have a chance to do some great things if we take
advantage of this opportunity.
Both L.A. City Council
President Eric Garcetti and new City Planning
Director Gail Goldberg took the opportunity at the
summit to challenge us to be leaders in the City and
nation. Hollywood has always been a trendsetter … a
place where imagination reigns. Now, with the great
infrastructure that has been built and Hollywood’s
natural advantages, we have a chance to shine.
From an urban planning
standpoint, L.A. has always been criticized as 60
suburbs in search of a city. People have told us for
so long that we could never have the excitement of
urban destinations such as New York or Boston, that
we believed them. We have spoken about the
horizontal city for so long, that people didn’t
notice that we are finally moving towards a more
vertical city. And certainly, with another 3 million
people expected to move here over the next 20 years,
the time is now that we must start addressing the
need to move back toward the center rather than
constantly moving out.
I must admit, as urban expert
Joel Kotkin reminds us, that the majority of folks
still like that home in the suburbs. But then again,
we have never really given them an alternative that
is attractive – an exciting urban center with a high
quality of life, entertainment, and transit
alternatives. I have to believe that there are
enough people who would take advantage of such a
center if it existed here.
And that is where the “vision
thing” comes in play. Our civic leaders are looking
to us to show the way. Hollywood is compact enough
to provide an urban village. We already have the
entertainment options, and we have a subway. We have
a residential base with high spending power in close
proximity, and we have a core entertainment industry
on which we can build.
Now we need visionaries to step
forward and work to make the possible a reality. We
need developers who will stretch a little and
propose high quality projects that will meet
people’s expectations of Hollywood. We need projects
that will add to our quality of life. We need to
improve our public places and make them special,
upgrade our infrastructure, improve safety and
cleanliness.
Gail Goldberg cited a quote at
the summit from the great architect Daniel Burnham,
who once said, “Make no little plans. They have no
power to stir men’s blood.”
Let’s think big rather than
making little plans and create a community that will
show the way!
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There
is a need for Eminent Domain Powers
Recently, the Los Angeles Times
ran an editorial entitled “Boulevard of Dreams” that
did not give an accurate characterization of eminent
domain as it relates to the proposed Hollywood &
Vine project. I responded with a letter to the
editor, and I wanted to share some of my thoughts
with you on this subject.
About a year ago, the U.S.
Supreme Court made a ruling reaffirming the right of
cities to use eminent domain in connection with
redevelopment projects. The ruling raised a storm of
fury from parties opposed to the use of eminent
domain. There are now efforts to change the law to
restrict use of this power. While there may be
nothing wrong with a tightening of the law to be
sure that these powers are used properly, I am
afraid that many would go far beyond that point to
eliminate eminent domain altogether. That would be a
serious mistake. There are indeed occasions when
eminent domain is justified. In such cases, the
property owner should be fairly compensated and the
city should bend over backwards to assist in
relocating affected businesses.
Without eminent domain powers,
redevelopment agencies would simply not be able to
perform their mission in revitalizing blighted
neighborhoods. It was specifically because the CRA
possessed these powers that the Hollywood Chamber of
Commerce supported bringing the agency to Hollywood
in the 1980s. At that time, Hollywood was spiraling
downward because most property owners were sitting
on their property and doing nothing. Without added
investment, there was no way to turn things around.
Eminent domain gave the CRA the clout to encourage
property owners to either invest in their property
or to discuss selling it to someone who would. The
CRA has only used this power twice in Hollywood in
20 years … once to seize property from a slumlord
and the second time to restore the Egyptian Theatre.
The fact that they have rarely had to exercise their
powers is indicative that they have made fair offers
to property owners when acquiring property.
The L.A. Times editorial
complains about the taking of the Bernard’s Luggage
building for the Hollywood & Vine Project, and says
the City and developer should “make him a fair deal.
If he doesn’t go for it, redraft, redraw and build
around him.” The problem in this case is that the
owner has refused to even talk with the developers
of the project. It is not possible to follow the
Times recommendation to redraw and build around
Bernard’s Luggage, because this one-story building
would then be surrounded on three sides by 12-story
buildings, making the property unviable for
business, with no access to parking, and possibly
opening the City up to an inverse condemnation
claim.
We understand the CRA has some
excellent possibilities to relocate Bernard’s
Luggage within close proximity of the current
location. We hope that the owner does get a high
valuation for his property and can be relocated in
the neighborhood so he can benefit from the
revitalization that is occurring. Over the years,
most retailers in the vicinity of Hollywood and Vine
folded as the area deteriorated. It is commendable
that Bernard’s Luggage was able to hold on.
The Hollywood & Vine project is
a catalytic project important to Hollywood and which
can also prove beneficial for Bernard’s Luggage. It
will generate many new pedestrians and customers who
can help ensure the long-term viability of this
business and attract other businesses to the area.
It will create hundreds of jobs, provide
badly-needed affordable housing, and a long-awaited,
four-star W Hotel for the area.
Without a doubt, there is a
role for eminent domain if it is used sparingly and
only as a catalyst to turn around truly blighted
areas. If you take away the eminent domain powers
from redevelopment agencies, you will make it
virtually impossible to turn around other
communities in this City that are still waiting for
the help that redevelopment agencies can offer. The
fact that it has been so difficult and taken so long
to turn around a world-famous community like
Hollywood, shows just how difficult it is to achieve
revitalization. Don’t take away one of the most
important tools that helps make it possible.
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Building a Strong
Economy
One of the major roles of a chamber of commerce
is to build a strong local economy. In the 13 years
that I have been here, I cannot recall a time when
the Chamber has been more active than now in
pursuing that goal. With a committed corps of
volunteers and a capable staff, we are looking at
the things that will keep our economy humming far
into the future. Let me share a few examples with
you.
Our Community Plan Task Force, chaired by Marty
Shelton on NAI Capital, has been encouraging the
City to “beef up” the transportation element of the
plan update. With the potential large infrastructure
bond measures being put before voters later this
year, we want Hollywood to be well-positioned to
apply for those funds. Having a comprehensive
transportation list of priorities will help us to
achieve that objective.
This spring, a major capital improvement project
will begin on the congested intersection of Highland
Avenue and Franklin. A portion of the funding for
this critical project will come from $3.2-million in
relinquishment funds that the State has provided the
City. The Chamber played a major role in lobbying to
secure those funds. This project is the first phase
of resolving the problems at that intersection and
deals primarily with northbound lanes. One important
component of resolving traffic issues that still
needs to be addressed is to widen Highland to allow
two southbound lanes of traffic to turn west onto
Franklin Avenue. When we discovered that no plans
had been made for this eventuality, the Chamber
organized a meeting between City officials and an
important Chamber-member property owner. Those
discussions are continuing and will hopefully result
in a second phase to this project that will benefit
both the businesses and residents of Hollywood.
It is no secret that Hollywood has one of the
lowest parks-to-residents ratio in the City of Los
Angeles. With more than 3,000 housing units in the
pipeline, this is an important quality-of-life
issue. One Chamber visionary is Don Scott of First
Financial Bancorp., who is now heading up a chamber
task force that is researching the possibility of
capping a portion of the Hollywood Freeway to
provide future recreation grounds for the community.
Realistically, this is a long-term project, but by
working on it now, who knows but that it may someday
become a reality.
With all of the interest in building new housing
in Hollywood, concerns have been raised by the
Chamber that the employment base in Hollywood may be
threatened if we do not plan for future commercial
office users. The Community Redevelopment Agency has
asked the Chamber to convene a meeting on the topic
of the Jobs/Housing balance in Hollywood. Earl Lestz
of ESL Consulting and Elizabeth Peterson of the
Elizabeth Peterson Group will chair this meeting.
Maintaining a strong economy so that your
business can prosper is a top priority for the
Chamber. Rest assured that we are working to achieve
that goal on your behalf.
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