After a yearlong study of Santa Monica's economic climate, a Chamber of Commerce task force has concluded that the city is stuck with a reputation of being anti-business even though cooperation between local government and business interests has improved considerably in the past few years.
The blue-ribbon panel of 17 business leaders and public officials has recommended that the city and the chamber establish an Economic Development Council to address the city's business image problems and devise economic strategies.
The task force also recommended that the city enact laws to streamline building permit procedures and protect developers' rights.
The chamber's Economic Development Task Force will formally present its 38-page report to the City Council within the next month, said Christopher M. Harding, chairman.
Mayor Christine E. Reed said Tuesday she had not had time to study the report in detail, but that her initial reaction was that it was "a positive addition to the debate over economic development" in Santa Monica.
However, she said she is not sure the city needs another city-funded committee to advise public officials on economic issues. Santa Monica already has several joint projects with the chamber and economic development advisers on the City Hall staff, she said. "I'm not saying it's a bad idea, but I'm not entirely convinced we need another one of these committees," she said.
Former chamber president Martin Gottlieb said he set up the task force last January in response to fears that the city "is perceived as a being a very negative business climate."
Gottlieb said the need for the study was emphasized by last year's departure of Santa Monica's largest private employer, General Telephone Co., which moved its corporate headquarters, with 2,200 employees, to Thousand Oaks. Company officials said they decided to move mainly because Westside housing is so expensive that it had become difficult to attract employees here.
"Assuming the perception was true that we did have a negative business climate, we wanted the task force to come up with some recommendations on how we could turn that around," Gottlieb said.
The task force surveyed local businessmen and economic development programs around the state as part of its yearlong research. It also conducted a confidential survey of top executives of major businesses currently or formerly located in Santa Monica.
The report said that Santa Monica's business reputation was tarnished because the city adopted an "adversarial role" with the business community several years ago.
"More specifically," the report said, "Santa Monica's business image has suffered from enactment of rent control in 1979, retroactive application of the 1981 building moratorium . . . and the adverse publicity generated by these events." Santa Monica's rent control law is viewed as one of the strictest in the nation, and the 1981 building moratorium brought to a standstill commercial projects that were already under way, such as Welton Becket Associates' Colorado Place.
The city's image problem was accentuated by its adoption of a General Plan housing element in January, 1983, the report said. The element has drawn intense criticism from developers because it requires apartment or condominium projects with as few as three units to provide affordable housing in conjunction with the developments. As a result, Harding said, only a handful of multifamily projects have been built in Santa Monica since 1983, defeating the element's purpose of providing affordable housing.
"Santa Monica developed the unfortunate reputation of a very difficult place to conduct business, and has been referred to as 'the People's Republic of Santa Monica,' " the report said.
But "substantial progress" has been made since 1983 through the leadership of the late Mayor Ken Edwards and former City Manager John Alschuler and others in the public and private sectors, the task force said.
As evidence of the improved climate, the report cites the 1984 approval of a land-use element, which is part of the General Plan that will serve as a guide for zoning throughout the city.
The land-use plan was adopted unanimously by the City Council and with widespread community support, contrasting dramatically with the still-controversial housing element approved in 1983, Harding said in an interview.
As further evidence of a "developing spirit of cooperation" between the city and the business community, the report points to the formation of a Convention and Visitors Bureau co-sponsored by the city and the chamber. Also, the report notes that there is significant business representation on the boards of city corporations formed to oversee development of the Santa Monica Pier and the Third Street Mall.
But in spite of progress, the task force warned, "Santa Monica is still suffering from its 'anti-business' image.' "