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Valley Perspective

Thinking Outside the City Lines

April 12, 1998

The friendly competition between neighbors Burbank and Glendale highlights how good intentions can overcome bad situations. Despite good-natured civic rivalry, the two cities cooperate to lure businesses within their boundaries. That's a big deal because local tax structures are set up to encourage municipalities to fight each other for everything from car dealerships to office parks. Neither Burbank nor Glendale is above occasionally sticking it to the city next door, but officials recognize the importance of taking an aggressive regional approach to economic development.

Most California cities are addicted to growth just to pay the bills. Since Proposition 13 limited the ability of local governments to raise money through property taxes, city administrators have looked for other ways to keep streets paved and cops on the beat. Among the easiest: charging newcomers and courting retailers and big business. In place of property taxes, cities can collect fees on new development to keep coffers full. But that's a one-time infusion. Retail stores provide a steady flow of sales tax into city treasuries. Strong companies also bolster the tax base. So it's no wonder that cities go to drastic lengths to make themselves attractive to retailers and successful companies.

Although officials from Glendale and Burbank do try to cut the best deals for their respective cities, they realize the importance of cooperation. In other words, they know when to fight each other for a company and when to band together to attract the kind of business that provides stable, long-term benefits to the region as a whole.

Case in point, entertainment.

Quietly, Burbank has grown from the center of aerospace to the center of entertainment. Its two biggest employers are Warner Bros. and the Walt Disney Co., and the city is home to NBC and scores of smaller entertainment companies. Anchored by the Burbank companies and Universal Studios to the west, entertainment firms have blossomed across the southeast San Fernando Valley. Some big companies pressed for space--including Disney and Warner Bros.--have spilled over into Glendale. Dozens of other small companies ring the cities in North Hollywood and Los Feliz. The benefits cross boundaries and the concentration of successful businesses attracts others.

Thinking beyond municipal lines is critical to consistent economic growth. Smart executives look hard at the bottom line when making location decisions. Tax rates and support services matter. So, too, does a region's commitment to business development. Modern companies do business internationally. Burbank and Glendale demonstrate that local cities, too, can look beyond their own boundaries and recognize that a neighbor's windfall can mean good things for them.

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