CALIFORNIA COMMENTARY : In Search of a City's Economic Elite : Peter Ueberroth's exit from Rebuild L.A. leaves a board that typifies the area's political and economic gridlock.

By JOEL KOTKIN

May 25, 1993 12 AM PT

<i> Joel Kotkin, a senior fellow with the Center for the New West and an international fellow at Pepperdine University's School of Business and Management, is the author of "Tribes: How Race, Religion and Identity Determine Success in the New Global Economy" (Random House, 1992). </i>

The departure of Peter Ueberroth from the chairmanship of Rebuild L.A. leaves an enormous void within the economic leadership in Southern California. Whatever his shortcomings, and they are legion, Ueberroth to many represented the only effective national business spokesman for a region desperately in need of strong advocacy.

Certainly it seems inconceivable that any of Ueberroth’s four co-chairs could even begin to fill his shoes in the foreseeable future. Rather than being entrepreneurs and creators themselves, they epitomize the bureaucratization of the Los Angeles business elite; none represents a significant job- or wealth-creating entity within the region, and only one, Bernard Kinsey, possesses either the temperament or the presence to emerge as a credible leader.

Nor can much be expected from the rest of the board, dominated largely by professional managers, often from companies based elsewhere, social-service advocates or political leaders. To a large extent, the board more accurately reflects Southern California’s economic and political gridlock than any effective business community leadership.

This gaping hole in Los Angeles’ economic elites is remarkable for a city that long boasted one of the most aggressive and dominating business communities in the nation. From the days of Henry Huntington and Harrison Gray Otis to Howard Hughes, Donald Douglas, Jack Warner, Walt Disney and Asa Call, Los Angeles’ business community usually shaped and controlled the public agenda. Although they certainly did so in their interest, these leaders also boasted a strong common sense of commitment to creating a great metropolis.

Increasingly, it seems that the 1984 Olympics, led so effectively by Ueberroth, came to be the last gasp of this leadership class. At that time, Ueberroth still could rely on such strong figures as powerbroker attorney Paul Ziffren and aggressive, locally based firms like First Interstate Bank. Los Angeles’ business community was still dominated by entrepreneurs who had built great companies--the likes of Occidental’s Armand Hammer, ARCO’s Robert AnderSon and MCA’s Lew Wasserman--and were capable of reaching decisions without worrying overmuch about outside shareholders, advocacy groups and political correctness.

In his leadership of RLA, Ueberroth sought to recreate this kind of elite, but he could not awaken the dead or dying. Many of the companies that typified the Los Angeles of the early 1980s--ARCO, Occidental Petroleum, MCA, Security Pacific Bank--had already either passed into the hands of bureaucratic managers, been sold to outsiders or gone out of existence. At the same time, key business organizations such as the Chamber of Commerce and the Economic Development Corp. had become increasingly irrelevant or incompetent.

This lack of effective leadership was obvious at one recent RLA meeting co-sponsored with the New York-based Committee for Economic Development. Portrayed as a meeting about the corporate role in rebuilding Los Angeles, it was sparsely attended and dominated by second- or third-tier public- and government-relations types. In contrast, a similar CED-sponsored conference in San Francisco drew heavily from the top of that region’s business leadership, including such luminaries as Tom Clausen, retired head of Bank of America.

Ueberroth never truly adjusted his strategy to the fading fortunes of the old elite. His early obsession in bringing old corporate leaders into key leadership of the rebuilding process missed the mark, since most came from companies that were tHemselves downsizing or talking of leaving town. Some RLA board members, most notoriously Hughes Aircraft boss Michael Armstrong, stretched credibility even further by actively stripping jobs from the region, contributing to the perception of the area as bad for business.

At the same time, Ueberroth was slow to recognize the sources of economic energy in Los Angeles that are rapidly replacing the old elites. These include a plethora of small and mid-sized companies in fields such as biotechnology, medical instruments, entertainment software, international trade, fashion and textiles. The leaders of these firms, much more than the residue of the old corporate elites, far better epitomize both the region’s ethnic diversity and the dynamism that still exists, often unnoticed and unheralded, in one of the world’s greatest urban economies.

Whoever is elected mayor on June 8 will need to nurture and develop this new emerging business class. If the post-Ueberroth RLA is to remain relevant, it can do so only as a vehicle through which these new players can gather and direct their individual efforts toward the collective rebuilding process.