BUSINESS PULSE : ORANGE COUNTY ISSUES & ATTITUDES : Most Executives Favor Slower Growth, Citing Quality-of-Life Factor

By MICHAEL FLAGG

May 12, 1988 12 AM PT

<i> Times Staff Writer</i>

Breaking ranks with local builders, more than half the executives surveyed by The Times said they would vote for the slow-growth initiative even though they expect it to hurt Orange County’s economy.

Most of the 562 executives polled by The Times said they thought the initiative would cut jobs and raise housing prices. And even more said their own businesses would suffer if voters approve the initiative in the June 7 primary.

But those negatives were offset by the biggest perceived benefit of the initiative: Most of the executives said they thought it would improve the quality of life in Orange County.

“Clearly, some business people are willing to suffer in their businesses a little if they think they’re preserving the quality of life,” said Terry D. Jacobson of Leason Pomeroy Associates, an architectural firm in Orange. Jacobson opposes the initiative, which the building industry regards as its single biggest threat.

The poll reflects a split in the business community that surprised some in the building industry.

Donald D. Steffensen, president of the Building Industry Assn. of Southern California, said he had not expected support for the initiative to be so strong among business people.

He ascribed this support to the “shortsightedness” of executives in other industries who don’t think the initiative will hurt them much.

But Tom Rogers, a leader of the initiative’s backers, said he had expected to get support from the business community.

“The top executives in this county realize there’s a problem,” he said. “The only ones opposing this initiative are the self-serving individuals in the Building Industry Assn.”

The Citizens’ Sensible Growth and Traffic Control Initiative would allow new development in Orange County only if streets around the proposed sites are improved so that traffic and other conditions meet certain standards.

The building industry says the initiative sets impossibly high standards and would harm the economy by shutting down construction in the southern part of Orange County, where most new homes are going up.

Supporters say the initiative would prevent county government from continuing to approve more construction than the roads can handle.

In interviews, some executives said they resented the rapid development of the county.

“I live in Corona del Mar, and I used to drive to work through the Irvine Ranch and watch the crops change every season,” said Anthony D. Christopher, president of A & J Manufacturing Co., a Tustin manufacturer of electronic cabinetry.

“It was really beautiful and peaceful. Now, it’s all just houses, and it makes me mad.”

And some executives said they thought the poll showed the declining importance of the once-dominant building industry as the county’s economy diversifies.

“There’s no question that developers are losing their hold on Orange County,” said Leland J. Hendrie, president and chief executive of PHD Insurance Brokers Inc. in Garden Grove, who opposes the initiative.

“As they run out of space in the county, there’s just less and less development going on.”

It is the county’s jammed roads that have split the business community. Half the executives said traffic was the county’s worst feature.

“People are really unhappy about the congestion,” said Kent Dunlap, administrator of the new CPC Laguna Hills Hospital.

“You can ordinarily assume that the more people, the more economic growth, so it’s better for business. But at some point there’s a saturation, and the county becomes unattractive to people and companies,” said Dunlap, who favors the initiative. “I think we’re seeing some of that now.”

Of the surveyed executives, 55% favored the initiative. Of the rest, 32% said they opposed it, and 13% were undecided.

Counting only executives of companies based in Orange County, support fell to 51%. Of companies based outside the county, 64% supported the initiative.

By contrast, a Times poll in February found that 73% of the county’s residents favored the initiative. That support cut across demographic boundaries, including sex, income, age and political parties. Another 13% opposed the initiative, and 14% said they were undecided.

Most observers attribute the initiative’s support to frustration over traffic, smog and other problems caused by the county’s rapid growth.

Among executives polled, those at small and medium-sized companies tended to favor the initiative by the widest margins.

Those with companies employing between 50 and 99 workers favored the initiative by 57%, with 32% opposed and 11% undecided.

Those with 100 to 249 employees favored the initiative by the widest margin: 59% supported it, while 30% were opposed and 11% undecided.

Of the largest companies--employing more than 250 workers--48% of the executives said they supported the initiative, 35% were opposed and 17% were undecided.

“If you have a smaller number of employees, you don’t have to worry as much about the cost of housing pushing your workers out of the county,” said State Farm executive Roger Tompkins, who opposes the initiative.

Tompkins heads State Farm’s regional office in Costa Mesa. The company employs 1,500 in Orange County, and Tompkins said he has been having trouble finding clerical workers because the local unemployment rate is so low and affordable housing so scarce.

Separating the responses by industry, executives of manufacturing companies were the initiative’s biggest supporters. They favored it by 62%, compared to 23% opposed and 15% undecided.

The next-highest margin was in retailing and services, where 58% favored the initiative, 29% opposed it and 13% were undecided.

“Having worked in areas where they have gone through overbuilding, I know how it can drastically hurt the owners and operators of businesses,” said John Schulz, general manager of the Sheraton Anaheim Hotel.

“Growth controls can help maintain an orderly level of development.”

Schulz said he thinks the initiative might help the Sheraton by slowing construction of new hotels in the county’s exceedingly competitive lodging market.

Not surprisingly, most building executives opposed the initiative. So did a majority in financial services and real estate.

But those industries no longer dominate the county’s economy as much as they once did. The 8,500 companies in finance, real estate and insurance account for only 10.6% of the county’s 80,000 companies, according to Contacts Influential, publisher of a directory of county businesses.

Construction firms and contractors account for only an additional 7%.

The foundation of the rapidly changing business community is now the service sector, with more than 44,000 businesses, or about 55% of the total. There are another 16,000 retail businesses and 4,800 manufacturers.

And even in construction and real estate, the poll found some support for the initiative.

Builders opposed it by 56%, with 34% in favor and 10% undecided.

In financial services, insurance and real estate, the vote was 49% opposed, 40% in favor and 11% undecided.

Typical of those opposing the initiative is Richard Boyle, president of Pioneer Bank in Fullerton: “Slow growth is the stupidest damned philosophy any human being could have,” he said.

“We are not put on this earth in order not to grow.”

Said David Prizio Jr. of Prizio & Prizio General Contractors in Fountain Valley, one of the county’s larger builders: “It’s a very shortsighted and negative solution to the problem. Even if we stop housing construction, we’ve still got the jobs in Orange County. So people are going to continue to pour in over the freeways from the Inland Empire.

“Voting for it is an emotional, personalized type of reaction. “It’s like saying: ‘Hey, I’m sick to death of jammed freeways and I’ve got to do something.’ ”

Like Prizio, 60% of the executives said the initiative would harm the economy and the lower the creation of jobs. Only 16% said it would help, and 24% said they didn’t know.

Even more executives--63%--said the initiative would hurt housing prices, presumably by raising them in what is already one of the nation’s most expensive housing markets.

Another 28% said the initiative would have a “good effect” on housing prices, while 9% were not sure.

Assessing the impact of the initiative on their own businesses, 40% of the executives said it would hurt, while 20% said it would help and another 40% were not sure.

But 60% said the initiative would improve the quality of life in the county, the key point executives found in the initiative’s favor. Only 20% said it would hurt the quality of life, and 20% were not sure.

“It’s a bittersweet problem. Once I moved here, I wanted everyone else to stop moving here,” said Ron E. Hanson, president of United Syatt America Corp., which makes auto supplies.

“But I can’t support slow growth, because a businessman can’t say he supports bringing economic downfall to a community.”

Replied initiative supporter Roger J. Reynolds Jr., chairman of Reynolds & Taylor Inc., a Santa Ana Plexiglas manufacturer: “I don’t think we can or should stop growth, but we need to have it made orderly.”

SLOW GROWTH INITATIVE

A majority of executives say they support the slow-growth initiative on next month’s ballot. TOTAL VOTES FOR SLOW GROWTH

Yes: 55%

No: 32%

Don’t Know: 13%

VOTE FOR SLOW GROWTH

Don’t No. of Employees Yes No Know 50-99 57% 32% 11% 100-249 59 30 11 250 or more 48 35 17

INDUSTRY-BASED SUPPORT Construction

Yes: 34%

No: 56%

Don’t Know: 10%

Manufacturing