How Bad are Things in California for Business?

Here are the words of Austin Beutner, first deputy mayor of Los Angeles and CEO of the city's Office of Economic and Business Policy, and general manager of the Department of Water and Power:

Not only did Chief Executive magazine recently rank California as America's worst state for business, but the publication called us "the Venezuela of North America."

In other words, the Golden State, with its world-class economy, is no better than a dictatorship that can't keep its lights on.

Fighting words? You bet. But sometimes a slap across the face can also serve as a wake-up call. After losing more than 111,000 jobs in the Southland this past year and seeing marquee corporate names head elsewhere, we have to develop smarter ways to retain businesses and attract new investment.

Monitoring the Milken Institute Global Conference

Alan Prest of PEU Report emails:
 
Bob,

I ran across the speaker list for next week's Milken Institute Global Conference "Shaping the Future." 

You'll recognize many names, including:

Austin Beutner, City of Los Angeles
Leon Black, Apollo Management
David Bonderman, TPG Capital & GM Board of Directors
H. Rodgin Cohen
Robert Dove, Carlyle Group Managing Director, focus infrastructure
Numerous Goldman Sachs people
Nouriel Roubini
Meredith Whitney

There are lots of private equity, pension fund, and politicians (US & international)..  The media reps include John Carney, David Gregory & Andrew Ross Sorkin.

Austin Beutner to the Rescue

L.A. Mayor Antonio Villaraigosa on Monday appointed First Deputy Mayor Austin Beutner as interim head of the Department of Water and Power.

He has a simple task. Lati reports:

Villaraigosa said Beutner’s primary task will be to salve the lingering animosity that ratepayers and the City Council have toward the DWP.

This should be as easy a task to perform as playing basketball with hockey skates on, since L.A. is basically broke and the public doesn't want taxes raised and the public is on to the scam that the city would like to raise power and electric rates  (instead of raising taxes)and divert the funds to the city's general fund. In the meantime DWP employees attend lactation classes.

Tom Garrett profiled Beutner, earlier this week, in an excusive for EPJ, here.

Goldman Weasels Its Way Into Los Angeles Politics and Comes Out Smelling Millions Richer

Financial regulations have never stopped Goldman Sachs, so why should zoning regs.

Admittedly in a Private Property Society, private property owners would be free to do whatever the hell they damn well pleased on their own property. But in a world of government created power centers, it's only those who know how to influence the power centers, that have freedom, while the rest of us schmucks can just sit and watch from the outside.

At the start of the 21st century, Goldman Sachs has been the slick operator that finds the way to capture government officials for its own benefit. The latest example of this comes out of Los Angeles.

Last Friday,  the Los Angeles City Council voted  12 to 2 in favor of a change in zoning laws that handed the Goldman additional development rights on 111 acres of property it co-owns at Playa Vista.

According to LA Weekly:

The vote allows Playa Vista's final build-out phase to dispense with land-use rules that permitted just 100,000 square feet of commercial space — about the size of a single Costco warehouse — to allow about 2.6 million square feet of luxury housing, a smattering of senior housing and about 341,000 square feet of retail, offices and public buildings — significantly more square footage than is contained in Chicago's 92-story Trump International Hotel and Tower.

In pure dollar terms, the new rights substantially boost the value of Goldman Sachs' property — by $145.6 million, according to land-use consultant Bill Christopher.

After this play, expect more out of Goldman in terms of using and abusing the city. They appear to have dug their tentacles into the city big time. How deep?

The land which Goldman owns jointly with Morgan Stanley Real Estate Funds and union pension funds is known as Playa Vista. The president of Playa Vista is Steve Soboroff.

According to LAW, Soboroff participated in a "kitchen cabinet" that recommended Austin Beutner as Mayor Antonio Villaraigosa's new jobs czar, the new ultimate power position in Los Angeles.

Bottom line, Goldman's man in  L.A. was directly responsible for putting the city's new power player into his new position.