Rag Trade Flees to Suburbs : High Cost of L.A. Plant Space Is Driving Many Garment Manufacturers to Cities Such as Vernon


When Bethlehem Steel closed its plant in Vernon in 1982, it was widely acknowledged to be a major sign of the decline of heavy manufacturing in communities located just southeast of Los Angeles.

The plant closing was a special blow to Vernon, which borders Los Angeles along Alameda and 25th streets. After all, Vernon was founded in 1905 solely to foster industry, and the city's administrators have long held high the community's motto--"Exclusively Industrial."

Responding to the steel plant closing and the shutdown of other heavy manufacturing operations, Vernon's administrators stepped up efforts to lure garment makers and other firm involved in light manufacturing.

Vernon had only about 20 garment firms in the wake of the Bethlehem Steel closing. However, leasing agents at real estate firms considered Vernon's proximity to Los Angeles' burgeoning garment industry to be a selling point. Seeing an opportunity, agents began to lead some fashioners of cloth to wide open spaces in Vernon.

What has happened since is a riches-in-rags story. Vernon now has more than 100 garment industry firms, an increase of about 400% since 1983. Garment makers have brought at least 10,000 new jobs along with their stitching machines over that six-year period, a significant increase in a city with only about 45,000 private sector jobs.

Acknowledging this initial movement and citing economic factors such as the rising cost of land in downtown Los Angeles, industry analysts and real estate mavens are now predicting that larger numbers of clothing manufacturers will head to small communities immediately south of Los Angeles. Some industry observers, noting that the face of downtown is changing, forecast even more change in the future.

Jack Kyser, chief economist at the Los Angeles Area Chamber of Commerce, is among those monitoring the changes. Kyser says manufacturers of garments and the contractors that help assemble clothing are willing to consider a move to Vernon because it is close to the garment district in downtown Los Angeles and near the home of many garment workers--communities such as East Los Angeles, Huntington Park and Southgate.

"We've been tracking this for two or three years and we're seeing a definite movement to Vernon and the City of Commerce," Kyser said. "Over the next 10 years we will see more changes as they (apparel producers) . . . continue to slide south."

In a recently published study of the migration, Kyser concluded that many clothing manufacturers are leaving the south and east edge of downtown Los Angeles. Clothing makers with operations in those areas accounted for 42% of the total garment-related employment in Los Angeles County in 1986, compared to a 48% share in 1984, according to the study. As of 1986, there were a total of 36,643 garment workers in those parts of the downtown area, the study said.

As part of an effort to lure more garment industry firms to Vernon, one developer--Trammell Crow Co.--last month opened a new industrial park there. The $38-million facility, dubbed Vernon Business Park, contains 14 buildings and about 670,000 square feet of industrial space.

Developers are willing to build projects in Vernon and target the garment industry because some garment company executives now feel they do not have to operate in the heart of Los Angeles' garment district to be successful, said Christopher Ludeman, a senior sales consultant in the commercial real estate division at the Los Angeles offices of Coldwell Banker. Traditionally, garment makers have been concentrated in an area bordered by Jefferson Boulevard on the south, Grand Avenue on the west, 8th Street on the north and by the intersection of Alameda Street and Washington Boulevard on the east.

"Nine years ago, garment makers wouldn't consider going beyond Washington Boulevard," Ludeman said. "They were afraid to get away from the core of the garment district."

The increasingly popular Vernon landscape is a relatively treeless sprawl of square buildings with an obvious major asset--space.

For Anthony Jeremiah, secretary-treasurer at Swede Sportswear, space was an important consideration. Swede, which produces women's sportswear, had been based on Maple Avenue, between Pico Boulevard and 12th Street in the garment district, for more than 30 years before moving to several locations in and near Vernon over the last three years.

Jeremiah said the company no longer felt bound to the downtown location when it obtained a showroom in CaliforniaMart, an apparel exhibition center that brings together clothing-buying executives from retail stores and local garment producers. CaliforniaMart, completed in 1964 and located on Los Angeles Street, between Olympic Boulevard and 9th Street, has been expanding for the past two decades. Groundbreaking for construction of a 1-million-square-foot annex, a building for menswear, is scheduled for early 1990.

"Companies have stayed in the garment district partly because it was convenient for buyers (for retail stores) to quickly would visit various manufacturers," Swede explained. "With the success (of CaliforniaMart), manufacturers don't have to be located in one area."

Jeremiah said the company decided to opt for cheaper space in the Vernon area partly because his operation was being pinched by the growth of retailing--some of it at outdoor stands--near his former location.

"The sidewalks are jammed with merchandise," he said. "Parking was a problem. Between the parking problem and the heavy traffic, we felt squeezed."

Analysts at the Los Angeles Area Chamber of Commerce have also detected changes. For example, they cite the transformation of the Cooper Building at 860 S. Los Angeles St.; once a center of garment making, the Cooper Building became a clothing retail center by the early 1980s. Santee Street near Olympic Boulevard is another notable example, observers say. Retailers set up shop along Santee several years ago and now operate cheek-by-jowl with clothing manufacturers.

As garment retailers envelop areas once considered manufacturing preserves, the competition for space heats up, according to real estate analysts. Analysts also say demand for space in the garment district has increased because apparel-making--the industry in Los Angeles County generates $6 billion in annual sales--has grown steadily. There are about 3,000 garment makers in Los Angeles County and an equal number of contractors in the county. In contrast, there were about 2,400 manufacturers and about the same number of clothing contractors in the county in 1982, according to state records.

The demand has contributed to rising rents downtown, according to Coldwell Banker. On a monthly basis, downtown space rents for 45 cents to 64 cents per square foot per month, compared to 36 cents to 38 cents per square foot in Vernon and 36 cents to 40 cents per square foot in the neighboring City of Commerce, the company said. Property sells for $30 to $100 per square foot in downtown Los Angeles, compared to $15 to $18 per square foot in Vernon and $15 to $20 per square foot in Commerce, according to Coldwell Banker.

For Bernard Lax, president of Louie Bernard Inc., the cost of space was a major factor in the decision to move from Los Angeles to Vernon.

"The square foot price for garment manufacturing space (in Los Angeles) has become prohibitive," said Lax, who produces women's sportswear and clothing for boys and girls.

Lax, who relocated in 1987, said he was initially reluctant to move.

However, many garment company executives review the pros and cons of a move from Los Angeles to neighboring communities like Vernon and decide to remain in the garment district. For example, Monarch Knit & Sportswear President Sheldon Goldman shopped for space in areas southeast of Los Angeles and decided to stay in the garment district. He said prices in those neighboring communities have been rising rapidly.

"Prices are getting as high as in L.A.," Goldman said. "It's convenient here. I live in L.A. . . . All of our suppliers are in L.A. The contractors and dye operations are all within five minutes of us."

While many executives choose to stay in Los Angeles, some leasing agents and a number of Vernon officials are gearing up sales pitches for garment makers prepared to make a move. Lately, officials at the Vernon Chamber of Commerce are touting the new Vernon Business Park.

Dolores Petullo, general manager of the Vernon chamber, is quick to note that the new industrial park is located on the site once held by Bethlehem Steel

"The plant closing had a tremendous impact on the economy," she said. "Things declined gradually after Bethlehem closed. . . . You have to change and adapt. If you don't, you're going to be lost."

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