L.A. County Gets Grant for Defense Conversion : Regional economy: The $5.6 million will help devise a strategy for dealing with Pentagon cutbacks.
The U.S. Commerce Department has issued a $5.6-million grant to Los Angeles County to help it adapt to lower defense spending, the first federal money intended to help contractors find new markets and help the region develop new industries.
Although the grant seems small compared to the nearly $9 billion in annual defense contracts that flow to Los Angeles County, the money will be important in setting a strategy for local industry, government and educational institutions to pursue subsequent federal grants, said Gary Conley, president of the Economic Development Corp., a private, nonprofit group.
“It is not much money to make any kind of a dent compared to what is being cut out (from) defense,” Conley said. “But it is more than we have had so far to implement a strategy to respond.”
The county has lost more than 78,000 aerospace jobs since 1988.
At best, federal economic conversion programs will provide marginal help to industry and universities in Southern California trying to cope with defense spending cutbacks.
So far, Congress has appropriated $1.7 billion for economic adjustment, although the money may take two or three years to be allocated, Conley said. In addition, there are proposals in Congress calling for $20 billion in spending for infrastructure and technology and $5 billion for an advanced research projects agency patterned after a similar office in the Pentagon.
If California gets the same 20% share of those grants as it does Pentagon contracts, it would get about $340 million of the existing program and as much as $5 billion of the proposed programs.
The Economic Development Corp. has received $2.5 million of the grant to provide an overall strategy for pursuing subsequent federal programs. It will use $1 million of its grant to provide seed capital to small firms, $900,000 to set up a technology resource center for small subcontractors and $675,000 to establish a high-technology council that will recommend a regional strategy for economic conversion.
The balance of the $5.6-million grant has been allocated to the county’s Community Development Commission to provide grants for new equipment and factory improvements for small-and medium-sized defense firms.
The county plans to add $1 million in local funds to the grants, providing a pool of $4 million for local industry, said Edna Bruce, the county’s inter-government relations manager. The grants will be administered by Ray Sakaida at the county’s business finance center in Monterey Park at (213) 260-2205.
Conley said Los Angeles may be ahead of other regions by doing the early planning necessary to get a major share of such federal programs, which will be allocated to different regions through competitive proposals.
“We have a tremendous opportunity here,” Conley said. “Other states are lagging behind.”
