Concerned that too many employers have fled Los Angeles over the past five years, Mayor Richard Riordan has proposed spending more than $1.9 million this fiscal year to retain and attract businesses.
The mayor will ask the City Council today to allow him to hire 19 people and a marketing firm to launch a massive business retention program.
On Tuesday, the council's Budget Committee and Personnel Committee, meeting jointly, gave preliminary approval to Riordan's plan, saying it is long overdue.
"If this is done right, the whole will be greater than the sum of its parts," said Councilman Zev Yaroslavsky, Budget Committee chairman.
"You will have a mayor who is taking responsibility for economic development and business retention in the city and you should have a council that is working toward the same goal."
As part of Riordan's proposal, officials would launch a marketing plan to fight off efforts by other states to lure Southern California firms away. Los Angeles would also be in the position to offer incentives, including tax breaks and loans, to employers.
The mayor said he wants to send a "clear message that the city will be working to attract, retain and expand new business here."
"These kinds of efforts translate to jobs," he added.
Scores of firms have left the area in the last five years, contributing to the region's economic slump.
In 1992, 140 companies announced plans to move nearly 18,000 jobs out of Los Angeles, Orange, Ventura, Riverside and San Bernardino counties, according to the Economic Development Corp. of Los Angeles County. About 44 firms left in 1993, taking nearly 7,100 jobs with them.
This year, eight companies, employing about 2,000 workers, have announced plans to leave Southern California.
As the businesses packed their bags, Los Angeles officials found themselves ill-equipped to stem the tide.
Although four people in Riordan's office have been working to keep business in the area, their task was too large for such a small staff, said Deputy Mayor Mary Leslie.
"We were in a reactive mode," Leslie said.
Even smaller cities such as Glendale and Palmdale are doing more to keep businesses, city officials said.
"We have competition from other cities, counties, states and even foreign governments," said Michael Gorfain, a city senior administrative analyst who has worked with the mayor's office on the plan. "They are not just at our doorstep, they are inside our house and they are taking our businesses."
Members of the business community said they were hopeful that the mayor's plan would give the city the edge it needs.
"It should have been done years ago," said Carol Schatz, senior vice president for the Central City Assn., a group representing Downtown businesses. "We need to have a strong focus on these issues in the mayor's office . . . (Riordan) deserves kudos."
Riordan's proposal calls for establishing outreach teams to meet with executives before they consider leaving. The program would be funded with money set aside by the City Council this year to improve relations with business.
Salaries of the program's staff members would range from $35,000 to $70,000. The effort would be a one-year pilot project, subject to reconsideration next year.
"We do believe it will more than pay for itself as far as business retention and development," Leslie said.