Uplifting View for the Valley
As more than 1 million San Fernando Valley residents move toward a vote on seceding from Los Angeles, the Valley’s 43,000-plus businesses--almost all of them small to medium-sized firms--are anxious about what that might mean for them.
The answer is lower taxes on business licenses and gross sales, at least initially. Yet even that reward is not certain.
And the idea of secession raises so many potential problems that before we add up benefits and drawbacks, it makes sense to ask what the Valley--and all of Southern California--really needs to succeed in today’s global economy.
The region is missing the trend to regional cooperation that could really help its many small companies. Other places around the United States, including Silicon Valley to the north and San Diego County to the south, are organizing regional cooperation efforts to attract and hold industry and allocate resources. The Los Angeles area lags badly, despite the fact that its companies do business increasingly on a global scale.
Ricon Corp. of Pacoima is a clear example of Valley industry and its expanding horizons. A manufacturer of wheelchair lifts for minivans, buses and homes, Ricon was founded 25 years ago by aerospace engineers who adapted concepts from rocket gantries to home wheelchair ramps. The company has been rejuvenated in the last decade by investment and leadership from Canada.
Jules Tremblay, chairman, Andrew Loduha, president, and Douglas Aziz, executive vice president, bought the company in 1990 from a failing Montreal investment fund named Medequip Healthcare.
They have taken it from 75 employees to 650 worldwide, including 300 at the Pacoima headquarters, and from $14 million annual sales to almost $80 million.
And now Ricon banks on its local work force to help it expand its international business. “An official of Mitsubishi complimented the quality of our production, said it was better than he could get in Japan,” says Loduha, a Milwaukee-born entrepreneur who sold his Wisconsin home chair-lift company to Ricon and came west in 1987.
These workers, Loduha says, gesturing to men in Ricon uniforms dismantling minivans to fit them with moving ramps and chairlifts, are the reason Ricon will stay in the Valley. The company will move a year from now to a new, larger plant in Van Nuys, rather than accept the blandishments of Camarillo, Valencia and cities in other states that have tried to lure the company.
“We could be in a plant in Camarillo for half the $8 million we’ll spend for the Van Nuys plant, but we’d lose most of our workers and have to hire and train new employees. The work ethic is great here; it wouldn’t make sense to leave,” Loduha says.
Ricon, which ships more than 20,000 lifts a year, up from 1,500 a decade ago, got help from the city-funded Valley Economic Development Center and from Randy Steinberg of Mayor Richard Riordan’s City Hall business team in finding new factory space on the site of the shuttered General Motors plant, which is being redeveloped as an industrial and commercial park called The Plant.
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Like many small business people, the Ricon partners are cool to talk of secession. “It all depends on what it does for taxes,” says Loduha.
Business people acknowledge that frustration with Los Angeles schools and Los Angeles bureaucracy, more than specific plans for a new Valley city, are prompting secession talk.
Marvin Selter, chairman of Van Nuys-based National Staff Networks and head of the Valley Industry and Commerce Assn., says business people should wait and see what develops with charter reform in Los Angeles. “The Valley needs more self-determination. But there are a lot of issues to address before a secession vote would be useful.”
Economist Shirley Svorny of Cal State Northridge believes the secession issue is a necessary wake-up call to Los Angeles’ bureaucratic city government.
But many experts argue that secession would prove a dangerous idea, while others say it’s a distraction and a delusion.
“If the Valley seceded from Los Angeles, what would then hold the Valley together?” asks William Fulton, author of “The Reluctant Metropolis,” a new book on Los Angeles.
Fulton fears that the cost of assuming the Valley’s share of the debts of the Department of Water and Power, Los Angeles airport and other facilities would present the first obstacle to tax relief.
And that’s not to mention the fees for accountants and lawyers to figure out the Valley’s share of liabilities and assets.
But beyond such considerations, David Abel, editor of the Planning Report newsletter, says the whole idea of Valley separation is “irrelevant.”
“Other cities are cooperating to help their regional industries while Southern California is bickering with itself,” Abel says.
At a recent civic government conference in Santa Barbara, Neal Peirce, author and urban expert, cited Minneapolis, Cleveland, Phoenix, Seattle, Portland, Ore., Baltimore and many others as cities that cooperate with suburbs in economic development.
But the Los Angeles region was cited as an area that has been slow to catch on to the regional trend.
What should be done? The region should promote its historic skills as a global asset. The San Fernando Valley has been a high-tech manufacturing center since the advent of aerospace in the 1930s, explains Allen Scott and Edward Soja of UCLA in their new book, “The City.” And those skills obviously have been transferable through the decades to newcomers from Central and South America who are now in Ricon’s productive work force.
Promoting that work force and many others in this area would be more useful to Southern California than talk of separation.
The trouble with the secession idea is that it lacks a vision of the region. And Southern California was not built by men and women of narrow vision.
It was built by the kind of people who bought Ricon and those who came to work in it.
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A Look at the Valley
Some key economic indicators for the San Fernando Valley*:
Population: 1.71 million
Private-sector employment: 589,922
Total payroll: $4.55 billion
Commercial vacancy rate: 12.0%
Industrial vacancy rate: 6.7%
Private establishments: 43,002
Number of people receiving aid**: 143,272
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Note: Unless noted figures are for first-quarter 1997.
* Includes Glendale, Burbank, Calabasas, San Fernando and Hidden Hills.
** Numbers are for the month of January and include AFDC, general relief fund and local stamp recipients.
Sources: California Employment Development Department, Center for the Study of San Fernando Valley Economy, Economic Development Corp. of Los Angeles County, Los Angeles County Department of Public Social Services.
