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The First Rule of Economics: Talk is Cheap

By Frank Gruber

In an interview published in The Mirror recently, Santa Monica's new mayor, Richard Bloom said that as mayor his "primary focus" will be the "economic picture."

Last year when the City's budget crisis was looming, then mayor Michael Feinstein on more than one occasion cited the importance of the sales tax revenue the City receives from car dealerships, and how the City needed to develop zoning standards to keep them in Santa Monica.

I knew the City was in trouble, but if Richard Bloom and Michael Feinstein -- both no growth stalwarts -- are talking about the economy, then we must be in trouble deep.

But it's hard to know what to make of this kind of talk.

I would like to believe that the no growth majority on the City Council -- Bloom and Feinstein, along with Kevin McKeown and Ken Genser -- have come to see benefits from economic growth, beyond balancing the City's budget, but I doubt it.

Although they are aware that sales taxes come from sales, and perhaps aware that sales are generated by businesses that people invest in that sell to other people called shoppers using money they have earned at a job, my fear is that they only have a "cashbox" view of the economy.

By that I mean that the benefit they see coming from economic growth is strictly a matter of whether there is enough in the public till to cover the money they want to spend or, in the current situation, how much they have been spending.

But the benefits of economic growth go beyond whether the City can hire more traffic cops and code enforcement personnel. The creation, accumulation and investment of wealth, private and public, is what allows individuals to live better lives and what the public can marshal for public purposes.

In a region of have-nots and impoverished public services, in a city in which many live in poverty, economic development is a necessity, not a luxury.

Previous City Councils have understood this, but the current majority -- until recently, at least -- has taken the economy for granted, taking one action after another to frustrate investment in the city.

How might we know if they have changed their thinking?

The first change might simply be rhetorical. If the no growthers stop talking about "greedy developers" that would mean a lot.

No growthers use this kind of moral rhetoric as a smoke screen. The motives, good or bad, of developers and other entrepreneurs are irrelevant to the objectives of those opposed to growth, which are not to prevent developers from making profits, but to prevent developers from building new buildings to house new residents or new jobs.

Or sometimes new students. Remember the no-growther opposition to Santa Monica College's bond issue? Since there are no "greedy developers" at the College, the no growthers had to call the College a "bad neighbor."

Similarly, the council members (and planning staff for that matter) could lower the hyperbole by no longer referring to Santa Monica as "built out" when it clearly is not. Huge expanses of the city, in and along the industrial corridor, and up and down the boulevards, are lightly developed with buildings that in many cases look like they are ready to collapse.

Toning down the rhetoric would be nice, but rhetoric is not as important as how the Council votes. Recently the City Council has given mixed signals.

Although the council approved the Boulangerie site apartments and exempted certain affordable housing developments from discretionary review -- actions that in any other town would be routine, but in Santa Monica were little short of courageous -- when push comes to shove, the council tends to let fears about traffic trump the benefits of development.

The best recent example of this came back a few months ago when the City Council sent an excellent project, the expansion of the Lantana studios, back to the drawing board, and possibly to oblivion, because of existing problems with cut-through traffic in the adjacent neighborhood.

Still, the council's action was something of a "soft denial," and nearly all of the council members, in particular Feinstein, expressed chagrin that they could not bring themselves to approve a development that so ideally suited the zoning the City had established for the property.

I hate cut-through traffic as much as the next person, but the way to deal with it is not by thwarting quality developments. Because so much of Santa Monica is zoned residential, it is inevitable that certain residential streets, particularly the few north-south streets that cross the freeway and go around the airport, and streets that feed them, will bear commuter traffic.

But there are ways to deal with local traffic problems as traffic problems. Streets can be narrowed and blocked off. I live off Sixth Street, in Ocean Park, and to prevent traffic cutting through to Lincoln, the City blocked cars from entering Sixth from Pico. The City narrowed Fourth Street and Ocean Park Boulevard. The impacts on the neighborhood have been reduced.

If we hold development hostage to traffic, the economy as a whole loses the benefits of development, yet traffic gets worse anyway because of sprawl.

If City Council is serious about the economy -- and, for that matter, about traffic -- it might direct planning staff to look at traffic as an infrastructure issue, not a development issue.

Five years ago planning staff were working on revising the Circulation Element of the City's General Plan, which would address traffic and other transportation issues on a systematic basis, focusing on infrastructure and transit alternatives. But work has stopped. Instead, the time and energies of staff have been dissipated on one "emergency" measure after another.

Every year City Council agonizes over the Planning Department's priorities. Council has made planning staff the sole arbiters within city government of development issues. Not only are they overworked, but institutionally there is no voice within government analyzing the benefits of economic development -- only the drawbacks.

If City Council starts asking the Economic Development Division, as well as planning, to opine on projects like Lantana, or the Housing Division to opine on issues like Downtown housing, then Council might start making more balanced decisions about economic development.

Lastly (for this column at least), there is one action the City Council could take that would show it takes the economy seriously, and which would more or less summarize all the issues I've discussed above. That would be to elect a representative of the business community to the Planning Commission.

Whoa. Who am I kidding?

The views expressed in this column are those of Frank Gruber
and do not necessarily reflect the opinions of The Lookout.
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