Appointees of Los Angeles Mayor Antonio Villaraigosa are at odds over a plan to lure a garment factory to South Los Angeles, sparking a debate over just how far the city should go to attract jobs in a dismal economy.
With unemployment at double-digit levels, the Community Redevelopment Agency has offered to give a real estate company two industrial buildings that were purchased by the city in 2007 for $2.7 million.
Pacific Center Place agreed to fix up those buildings and lease them to D&J Sportswear, an apparel company looking to relocate from South Gate. But the deal ran into trouble last week after two redevelopment commissioners argued that the city is getting too little for its money: 40 jobs over the next four years in exchange for a free piece of property and nearly $3 million in city loans.
“I think we need to be thinking about creating new jobs in South L.A., rather than moving low-wage jobs a few miles north -- and spending a lot of taxpayer money to do that,” said Madeline Janis, who was reappointed to the commission by Villaraigosa in 2006.
Commission President Bruce Ackerman, another mayoral appointee, sharply disagreed, saying the deal is a good one in a bad economy. “One of our mandates is to bring jobs to the city of Los Angeles. This does that,” said Ackerman, who serves as president and chief executive of the Valley Economic Alliance, a business organization.
With Janis and Ackerman on opposing sides, the redevelopment agency board deadlocked 2 to 2 on the project last week. That split -- with the board’s remaining three members absent -- exposed divergent views on how to rebuild the city’s industrial sector and help a neighborhood where unemployment exceeds 20%.
Villaraigosa, who was in Copenhagen for a conference on climate change at the time of the agency’s debate, has talked up the need to woo companies that build solar panels and other environmentally-friendly technology.
Janis cited those efforts as she argued that the redevelopment agency should have held a competition for the city’s land and focused instead on luring a “green” technology company, one capable of producing higher-wage jobs. “With the mayor in Europe and all these [environmental] efforts that we’re doing, to give a site away to a garment manufacturer without even trying to do some competitive process -- that seems like a waste,” she said.
That position has drawn criticism from City Councilwoman Jan Perry, who favors the agreement and represents the neighborhood where the deal is proposed. Perry called the push for green jobs by Janis and Commissioner Joan Ling “idealistic” and impractical in a dramatic downturn.
“We are in the worst recession that we have experienced in our lifetimes,” she said.
Perry promised to make sure the agreement comes back to the board when more members are available to vote in favor of it.
Meanwhile, redevelopment officials have been defending the deal with Pacific Center Place, an entity partly owned by businessman Sam Eshaghian, who deals in the garment, real estate and construction industries.
Redevelopment officials said the developer of the site would spend $3.2 million to fix up its industrial buildings. They also contend that green technology companies have little interest in the section of the city where D&J Sportswear wants to relocate.
“It doesn’t matter how much money we put on the table,” project manager Jenny Scanlin told the board last week.
Under the city’s 10-year loan agreement, D&J Sportswear would be required to bring 30 full-time jobs to the site in the first and second year of the agreement. That number would rise to 40 in the agreement’s third and fourth year and to 74 jobs in the fifth.
Half of those jobs would need to be paid at the rate of the city’s living wage: $10.30 per hour plus $1.25 per hour in health benefits. If those terms are met, one of the $750,000 loans being provided by the city would be forgiven.
But Janis was dismayed that the remaining jobs in the agreement can pay as little as $8 per hour -- $16,640 annually for a full-time position. And she urged redevelopment officials last week to go to companies that do business with D&J, including Gap, to make sure D&J has not gotten into trouble over its labor practices.
“I’m really dubious about any garment manufacturer,” she said. “Garment manufacturers, with few exceptions, have a long history of exploitation and treating their workers very badly.”