Time Capsule Tuesday: Stanford Research Institute Study on City of Industry, 1957-1970, Part Two

by Paul R. Spitzzeri

In its important early study on the City of Industry, which helped set the table for the city’s general plan approved in summer 1971, the Stanford Research Institute laid out its conclusions and summary as part two of the document.

It observed that the city was “designed to provide attractive areas, facilities, and corporate conditions suitable for industrial growth.”  Five main findings were cited:

  • The city in the six years from 1957-1963 experienced faster growth that found elsewhere in the region and state, with the rate of increase of the “value added by manufacture” averaging nearly 30% per year.
  • Projections through 1970 were that the city’s growth would be above average and that total “value added by manufacture” would be about 3% of the total for southern California, about four times greater than in 1963.
  • The city’s “emphatic orientation toward industrialization” and its growth “imparts no significant advantage and no major disadvantage” to companies operating there, to neighboring areas, or the region.  It was not structure, but economic and “locational forces”, that either provided advantages or its opposite.
  • The city’s economic impact was “a benefit to the neighboring communities” in that employment, payrolls and other income, and property tax receipts accrued to the areas that surrounded Industry.
  • Future growth, however, involved some issues, including the projection that “sales tax receipts will not increase as rapidly as disbursements for needed services, thus creating pressure to discover other and/or additional revenue sources.”

With regard to the city’s organization, it was pointed out that the only three employees on the payroll in the early years were the city manager, clerk, and treasurer until the five members of the city council were given salaries starting in summer 1962.  Moreover, it was added that

The services and functions that a large complement of municipal employees would perform are instead accomplished either by Los Angeles County on a contract basis [such as police and fire services] under the “Lakewood Plan” or by private individuals and firms on a retainer of fee basis.

To the date of publication, some 80% of city revenues were derived from a 1% uniform local sales and use tax, while less than 10% came from permits, licenses and franchises, though the latter went to the county to reimburse it for services provided.  About 5% came from fines and forfeitures on motor vehicles earmarked for traffic safety spending.  Overall disbursements were about 70% of receipts, allowing for a surplus, with general administration comprising half and street repairs and public safety accounting for roughly 20% each.  It was stated that “the avoidance of a municipal property tax” and using contracted county services were essential policies.

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As to the types of industrial businesses in the city, a table showed that, in 1958, there were 53 firms.  Five years later, that number increased four times and then more than triped by 1970, so that there were almost 700 companies operating in the city.  Almost 70% of them were involved in manufacturing.  The employee population rose from just over 3,000 in 1958 to 8,600 by 1963 and then to 30,000 by 1970, with about 80% in the latter year working in manufacturing.  The value added in manufacture amounts more than tripled in those first five years and then quadrupled between 1963 and 1970.

It was noted, however, the non-manufacturing firms, generally supporting those that were engaged in manufacturing, had higher rates of growth, even if the numbers were far smaller.  In addition, an influx of smaller firms did mean a reduced average of employees per firm, lower payroll size, shipment value and the value added by manufacture.  Wage scale declines were attributed to a “austerity wage policy” enacted by companies during these early years.

With respect to land use and prices, it was observed that the rise in smaller firms coming to the city meant that less land was needed for conversion from agricultural to industrial uses.  Notably, pacels west of Stimson Avenue, just east of the Homestead, were said to have nearly doubled in value to about $22,000 an acre by 1964, while property east of that point were up to $12,000 per acre from a little less than half that just prior to the city’s incorporation.

It was stated that, by 1970, those values would be $43,000 in the former and just under $20,000 in the latter, reflective of the increasing distance east from Los Angeles.  It was expected, however, that the completion of the Pomona Freeway (SR-60) and what was called the “Brea Canyon”, actually “Orange”. Freeway (SR-57) would lead to increased values in the eastern reaches of the city.

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Another table, showing certain economic indicators, noted that the city’s population rose from 687 in 1958 to 750 five years later, but no figure was given for 1970.  The gross area of the city rose from under 4,000 acres to over 6,200, an increase of well over 50% and industrial land within that more than doubled to nearly 1,100 acres.  Large increases in assessed valuation, taxable transactions and sales tax receipt were to be expected.

As to advantages and disadvantages, there were asserted to be many of the former and few of the latter.  A survey sent by the Institute to managers in the city’s industrial firms revealed that 45% of them chose to come to the city because of proximity to markets; available land in the required acreage; low land costs; and access to freeways and truck routes.  Also important was the city’s attitude toward industry, a good labor pool, and adequate housing nearby.

The three main disadvantages were local traffic conditons, the cost and service access to telephones, and a “lack of public eating accommodations.”  Also stated was that the availability of rail transport was an major advantage, though “many of the smaller firms have not availed themselves of this opportunity.”  More elaboration on the freeway system, including the San Bernardino (I-10) completed in the mid to late 1950s, the in-process San Gabriel River (I-605) and the projected 1970 completion dates of the 60 and 57 were important for ease of transport generally, as well as access to Orange County and the region’s harbors and airports.

As for resources, electricity, gas, and water supplies were all considered to be good, while the recent introduction of double trunk sewers represented an advantage over older industrial areas (downtown Los Angeles and Vernon, for example) that had single trunk systems, while flood control work had improved greatly and more work was in progress along San Jose Creek and other areas.

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Those disadvantages included traffic issues with poor railroad grade crossings; streets that were too few in number and too narrow for those that existed; costly telephone service that was often considered faulty; higher shipping costs because of its distance from existing free delivery zones in the region; and “the need for greater control, at higher cost, over air pollutants.”

We’ll continue with more from the conclusions and summary section of this interesting report next Tuesday, so check back then.

2 thoughts on “Time Capsule Tuesday: Stanford Research Institute Study on City of Industry, 1957-1970, Part Two

Add yours

  1. Interesting comments about the poor phone service. My family moved to La Puente in 1958. The phone company was General Telephone. (much later GTE) There was no competition or choice back then. While I was too young to remember, my parents always complained about the poor quality phone service. Party lines were the norm until the mid 1960s when private lines finally became available.
    General Telephone was so stereo-typically bad that they were the punch line in many jokes about poor phone service. Likely this is the situation that the report was making reference to.

  2. Thanks for the comment and recollection of rural phone service as urbanization was coming to this area.

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