Encinitas Gets Crash Course on Economics

The economic times are like a Freddy Krueger movie. Businesses are skipping town like jilted lovers. What’s a city to do?

If you’re the city of Encinitas, you ask a group of experts to come to town, take a day to look around and give you some suggestions about what can be done to jump-start the economy.

“The trick is to keep the businesses you’ve got and attract new ones at the same time,” said Mayor Gail Hano. “Businesses are leaving Encinitas on a daily basis. A majority of that is the fault of the economy. But some of the blame has to go to the bureaucracy.”

Recently, both City Council and members of the business community in the North County coastal community took a crash course in economics--one taught by the California Assn. for Local Economic Development.

In the end, the city got a passing grade for its efforts to inspire its own economic redevelopment. But, the teachers added, there was also room for improvement.

One problem, they said, is the city’s fractured, multilevel government system that includes numerous community action boards as well as a planning commission--a situation that is scaring businesses away like bears from a trap.

“There’s just too much government there,” said Wayne Schell, executive director for the Sacramento-based nonprofit economic development association. “There are five communities that came together to form the city of Encinitas five years ago. But a lot of those communities are still fiercely independent, with their own boards and forms of government.

“The city was formed as an attempt by these communities to do a better job governing themselves than the county was doing. But a lot of these little groups--the town councils and community action boards--don’t want to give up any bit of their power. I’ve never seen anything like it.”

Schell and a panel of three other economic experts spent a recent morning touring Encinitas before spending several hours with local environmentalists, businessmen and city officials.

If the economic climate doesn’t change, the city can expect rougher economic times.

“We found that the businesses were generally unhappy there,” Schell said. “There’s no confidence among them that the City Council gave a damn about business in general. And that’s not much of an economic strategy.”

If the city is to develop an economic game plan, he said, the first act would be to stop the car dealerships from leaving town and be receptive to such controversial projects as the building of a Home Depot and a seaside resort.

“For one, a lot of these car dealerships are squeezed for land. And some are looking to leave town. Once a car dealership leaves town, that town’s got problems, because those businesses bring tax dollars. There’s a lot of cities right on Encinitas’ borders that would love to lure those dealerships away from them.”

Hano said the city plans to take a closer look at the relationship between the City Council and local businesses. And it may invite the experts back to town soon for a more advanced course.

“And we’re going to look at some of these community action boards, and see if we can cut down on the time it takes to make decisions on would-be building projects,” said Hano, who in the past has voted to reduce the power of the individual community in building permits.

“If it takes two times as long for a decision to be made in Encinitas than other places, if you’re a business, where are you going to go? These are things we have to rectify.”

Schell said attracting businesses to town--and working to keep the ones it’s got--does not have to be done at the expense of the taxpayer and public interest groups.

“You do the best you can with what you’ve got,” he said. “You act like a businessman yourself and that your businesses are your customers. They’ll bring in taxes, which will keep the burden on other residents lower.”