Santa Monica Image Bad for Business?

The chairman of a Santa Monica Chamber of Commerce task force says it has found that the city “has a very serious image problem” that may be scaring away business.

The task force, which has spent nine months studying the city’s economy and the possible effects of its reputation as “the People’s Republic of Santa Monica,” is expected to give its complete report to the chamber and the City Council in about a month.

Chairman Christopher M. Harding said that the 15-member study group has heard testimony from businessmen and developers “who advised us that many of their colleagues would not touch Santa Monica because of its recent past. . . .

“Santa Monica still has a reputation as the People’s Republic of Santa Monica. There are businesses that will not locate here or will not consider Santa Monica because of its reputation.” He refused to disclose the names of the companies.

Santa Monica has an image problem, chamber President Vince Muselli said, because people outside the city are not aware of political changes that have taken place on the City Council since the city got its “People’s Republic” nickname.

The city became known as a left-wing stronghold in 1979 when tenant voters enacted one of the toughest rent control laws in the nation and elected renters’ rights advocates to the City Council.

In 1981, Santa Monicans for Renters’ Rights won a 5-2 majority on the council. They immediately enacted a strict building moratorium that affected an estimated $100 million worth of commercial and condominium projects.

Outraged developers saw the moratorium as an abridgement of property rights.

Bumper stickers reading “Welcome to the People’s Republic of Santa Monica” appeared around town.

That phase of Santa Monica’s political history gained nationwide publicity, but substantial changes since then have not received equally wide notice, business leaders and city officials said.

In the 1983 election, Harding and other opponents of the renters’ rights group organized themselves as the All Santa Monica Coalition and the group won three seats on the council. In 1984, the coalition won one more seat, and with it, the council majority.

This change from a liberal renters’ rights majority to a more moderate coalition majority is not widely recognized, Muselli said, adding that people think of Santa Monica as having “a local Communist Party marching up and down the streets, but it’s not that way.”

The chamber established the task force in February, shortly after General Telephone Co. of California announced that it had decided to move its corporate headquarters out of Santa Monica.

David Anderson, president of the company, said the main reason for the move to Thousand Oaks was that housing in the Westside had become so expensive that it was difficult to attract employees to Santa Monica.

Although Anderson said that the move was not the result of problems with city policies, the chamber decided that it was time to look at how Santa Monica was thought of as a place to do business, Harding said.

Santa Monica city officials contend that the city will always be attractive to business because of its beach location, climate, attractive residential areas, affluent population and labor supply.

And Mayor Christine E. Reed said that the city has a sound economic base. “We’ve always had a balanced tax base--a mix of residential, commercial and industrial,” she said. “That mix makes us economically healthy, but it also makes for conflicts (among the various interests) that the council ends up adjudicating.”

The city’s volatile political climate has made businessmen wary of Santa Monica, Muselli said. “There are a lot of misperceptions about what the city’s attitudes are and how they might impact business and development,” he said.

The problem involves “a lack of trust in city government,” he said. “People don’t know, if they are trying to build a project here, what is going to happen to them and that the rules won’t change in the middle of the game.”

Land-Use Plan

The city’s new land-use plan, for which zoning is being drafted, provides more clear-cut guidelines for development, Muselli noted, but businessmen outside Santa Monica may not know about it.

What developers and businessmen want is “predictability,” said Fred Plotke, president of the 250-member Commercial and Industrial Property Owners’ Assn. “We want clear guidelines so that not every project becomes a political football.”

Without the guidelines, Plotke said, developers are taking their business elsewhere. “Santa Monica is not in a vacuum,” he said. “Areas all around us are developing and redeveloping. . . . We’re picking up the resulting traffic without getting the revenues.”

In answer to criticism that renters’ rights policies have given the city a bad name in the business world, former Mayor Ruth Yannatta Goldway, a leader in the renters’ rights movement, said that “the people who are not happy with our policies are those who expected to make speculative gains in real estate.”

Councilman Dennis Zane, a founder of the tenant movement, said the renters’ rights organization is “pro-resident, not anti-business.” He said that renters’ rights council members voted to establish a visitors bureau and retail promotion programs, showing that they appreciate the importance of the city’s commercial base.

Zane denied that the group’s controlled-growth policies have hurt the city.

“It doesn’t surprise me that people who have vested interests try to claim some adverse results of our policies,” he said. “It doesn’t surprise me, but it’s not true.

“If what they mean is that we don’t have a lot of high-rise development on Wilshire Boulevard that otherwise would have been there, then I agree with them. That’s the way it ought to be. That’s what people want.”