54% of Valley business leaders say LA is headed in wrong direction

A majority of San Fernando Valley business leaders surveyed by the region’s Chamber of Commerce say Los Angeles is headed in the wrong direction, a stark assessment that confronted four Valley City Council members Thursday as they discussed the city’s business climate, budget, homelessness and preparations for the 2028 Olympics.

Fifty-four percent of roughly 165 business leaders surveyed by the Greater San Fernando Valley Chamber of Commerce said Los Angeles was headed in the wrong direction, compared with just 6% who said the city was moving in the right direction. Another 32% said the city was staying about the same, while 8% were unsure.

The results were released at the Chamber’s 13th annual State of the Valley luncheon in Universal City, where Councilmembers Bob Blumenfield, Monica Rodriguez, Imelda Padilla and Adrin Nazarian fielded questions before more than 250 business and civic leaders.

Council members John Lee and Nithya Raman, who also represent parts of the San Fernando Valley, did not attend. Raman is challenging Bass for mayor.

Nancy Hoffman Vanyek, the Chamber’s CEO, said before the panel that homelessness remains one of the biggest concerns she hears from Valley businesses, particularly when encampments outside storefronts deter customers. Transportation, infrastructure and the rising cost of operating in Los Angeles are also persistent concerns, she said.

“The cost of doing business is getting greater and greater, and that’s why people talk about moving out,” she said, noting that city wage mandates and taxes can compound expenses for small employers.

The council members largely acknowledged the dissatisfaction reflected in the survey.

Nazarian, the newest member of the council, said the problems behind the numbers were readily visible.

“I don’t think you need numbers necessarily to justify what’s going on,” Nazarian said. “You see it all around you. It’s palpable.”

He pointed to homelessness and public safety, describing blocked sidewalks and the financial toll that break-ins and other crimes can take on businesses.

Rodriguez said she understood the frustration, citing affordability, homelessness and the city’s business climate. Blumenfield said he would “share responsibility,” acknowledging that some things the city has done for good reasons have produced unintended consequences.

The city’s gross receipts tax, which business groups have sought to repeal, emerged as one point of debate.

Rodriguez said she wants the city to raise the $100,000 threshold at which small businesses become subject to the tax and provide targeted relief for restaurants and child-care providers, citing restaurants’ struggles since the pandemic and families’ need for affordable child care.

Asked after the panel what she believes the new threshold should be, Rodriguez said she had not settled on a figure and would need to negotiate with colleagues after reviewing a report from the city’s Office of Finance.

“I’m just eager to get things moving,” Rodriguez said.

Blumenfield said he supports reforming the tax but opposes eliminating it outright, warning that doing so would jeopardize revenue for critical city services. He said the city could consider raising the level at which businesses begin paying the tax, better indexing that amount and providing targeted relief for certain industries.

Nazarian likewise supported reform but cautioned that the city would need to determine how to replace any revenue it gives up.

Padilla, meanwhile, defended the city’s inflation-linked minimum wage increases, saying the city should instead look to measures such as targeted business-tax relief to support businesses.

The discussion also turned to the city’s growing legal liabilities and their impact on funding for basic services.

Blumenfield said the LAPD generates the largest share of lawsuits and argued that Los Angeles should focus limited resources on core municipal responsibilities rather than taking on services that properly belong to other levels of government.

After the panel, Blumenfield pointed to mental health and substance abuse services for homeless residents as areas he believes should primarily be funded by the county.

The luncheon came one day after the City Council approved an agreement governing reimbursement of city costs associated with the 2028 Olympic and Paralympic Games. Rodriguez opposed the agreement, saying it did not provide adequate protections against potentially large security costs.

Rodriguez told SCNG Thursday that she has met with the Los Angeles Police Department and wants the city to develop estimates for Olympic security costs and deployment needs, particularly given uncertainty about how much support will ultimately come from the federal government.

Padilla, meanwhile, said Los Angeles still has work to do to ensure local businesses benefit from Olympic contracting and said city departments must prepare the Sepulveda Basin for visitors, including through improved lighting, walkability and accessibility for the Paralympic Games.

Mayor Karen Bass, who opened the luncheon, offered a more optimistic assessment of Los Angeles, pointing to efforts on homelessness, public safety, housing construction and the entertainment industry.

“I believe in Los Angeles,” Bass told the crowd. “I believe in the San Fernando Valley.”

Blumenfield returned to the Chamber survey in his closing remarks, saying the city’s successes are often overshadowed by its problems.

His goal for next year’s luncheon, he joked, was simple: “I want to get that 6% up to 60%.”