Last month, readers collaborated with Long Beach Post contributors to identify the Ten Worst Decisions in Long Beach History. The exodus of automobile dealers from Long Beach held seventh place on that list. Available information leads me to conclude that in all likelihood no single decision resulted in this loss. Instead, it appears that a range of factors contributed to this sad state of affairs, including legislation, sales trends, and geography.
In 1992, California voters passed Proposition 13, an anti-tax ballot measure structured to freeze property tax rates, limiting increases to real estate appreciation when property is transferred. This new law severely impacted municipal government, and it eviscerated one of the most significant revenue sources for school districts. In response, cities began relying more upon local sales taxes to boost revenue, resulting in competition between municipalities to attract retail. Developers and retail chains were in the advantageous position of pitting one city against another to provide the best incentive for them to locate within their borders.
During the second half of the twentieth century, land use development changed to accommodate the private automobile. As suburban neighborhoods were built along new freeways, major shopping began to be oriented toward regional transportation. New commercial centers moved from major thoroughfares to freeway off-ramps, eventually seeking the interchanges of multiple freeways as an ideal location. This included department stores, specialty retailers like bookstores and office suppliers, as well as home improvement stores and car dealerships.
In California, the convergence of these two factors led municipalities to orient themselves along freeways and toward regional commercial development. Large pylon signs now litter the peripheral vision of freeway drivers, signaling to potential buyers that merchandise awaits them at the next off-ramp. Innovative cities positioned themselves to appeal to specific markets: the cities of Cerritos and Tustin developed auto centers that seemingly include every make and model of car, while Costa Mesa developed a home furnishing hub and Anaheim created a home improvement corridor that may well feature every type of tile and stone available in the developed world. These sorts of item-specific shopping nuclei draw shoppers on a regional basis, typically providing the cities in question with massive sales tax revenue for their respective coffers.
Long Beach once had its own automobile Mecca along Anaheim Street, which had eventually transitioned over to Long Beach Boulevard. But as cities began competing for sales tax revenue and shopping fashions altered in favor of freeway access, auto dealers began to migrate toward Interstate 405. Long Beach and its “city within a city,” Signal Hill, share an interlocking border along Interstate 405; this put them on a collision course in terms of competing for those auto dealerships, as well as competing for a variety of other high sales generators, like Home Depot and home appliance stores. Signal Hill has largely been on the winning end of this competition, as exemplified by the recent opening of a second Home Depot within their borders, steps from Long Beach. However, the competition between the two municipalities has largely resulted in a collection of big-ticket retailers with little sense of identity, retailers that as a result seem to fail to draw in shoppers beyond a zone of local convenience.
Long Beach and Signal Hill thus compete for the limited disposable income of their mutual residents; it would prove far more effective for these cities to consolidate their efforts and work to compete on a regional basis. The stretch of Interstate 405 running between Interstate 710 and Interstate 605 carries over a quarter million cars daily; it lies within a ten-minute drive for over 500,000 people. There is still a significant amount of land in this borderland between Signal Hill and Long Beach which could be used for regionally-oriented commercial development. This could take the form of expanding upon the available automobile makes and models for sale. There is also the potential to develop a regional shopping center on the scale of the Towne Center along Interstate 605 at Carson Street, but without bleeding away a significant amount of the Towne Center’s patronage. Developing this area along Interstate 405 at the border of Long Beach and Signal Hill could also take the form of providing office space for companies doing business in both Los Angeles and Orange County, since the location is ideally suited to reach both markets.
The question, then, is how this area can reach its full potential short of one city swallowing the other. There have been examples of developing joint authorities to administer areas of interest to multiple municipalities. SEATAC is one such agency, formed to administer the joint seaport and airport facilities of Seattle and Tacoma. The Empire City Corporation is actually a joint agency of multiple municipal and state governments to administer economic development in New Jersey and New York. Such a joint administration could be developed to consolidate the economic development efforts along Interstate 405 between Interstate 710 and Interstate 605, or perhaps for a smaller region. Instead of Long Beach and Signal Hill competing for the same companies, they can cooperate through this joint authority to recruit businesses and consolidate a single marketing and development strategy. The agency could take the form of a redevelopment agency, a community development corporation, or a business improvement district. Such an area would likely be designated an enterprise zone, with tax incentives to help attract new businesses.
Obviously, a proposition like this would face logistical hurdles, requiring extensive negotiation between the two municipal governments. What would be the primary mission of such an agency? How would such an administration govern itself? How would revenue be generated and shared? Regardless of the form such a joint administration between Long Beach and Signal Hill in this area might take, its fundamental objective would ideally be to nurture an area that could act as a regional economic generator, to the benefit of both cities’ citizens.
