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

by Paul R. Spitzzeri

Continuing with a look at the “Conclusions and Summary” portion of the important Stanford Research Institute study done on the City of Industry, focusing on the city’s development from its incorporation in 1957 up to 1970, the impact of the city among adjacent communities and the region was analyzed.

Notably, the City recently commissioned a similar study by researchers from Cal Poly Pomona, providing an interesting comparison and contrast nearly a half-century later.  The Stanford study concluded that

City of Industry naturally has a substantial impact on the communities that neighbor it, particularly since its municipal policy has required the expanding labor force of the City to seek homes outside the corporate boundaries.

Because workers preferred to live close to their places of employment, “the benefits and the burdens of the City’s growth . . . will fall largely on the neighboring communities in the lower San Gabriel Valley.”  At the end of 1963, some 8,600 persons were employed in the city with a payroll of $50 million which was “considerable support for the San Gabriel Valley.”  Those numbers jumped significantly by 1970, to 30,000 workers and $200 million in payroll.  Today, the employee population is more than double that of over forty-five years ago.

A corresponding table showed increases in manufacturing workers in the city reflecting growth in those in neighboring communities, along with higher levels of residents generally, school-age children, households, personal income, retail stores and sales, registered cars, and bank deposits.  This information was gleaned from material with the Institute and the U.S. Chamber of Commerce.

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The city as a tax source had a notable component to it in terms of the fact that “because the City and its property owners receive little in the way of direct service from many of the [school/water/sanitation and other] districts and therefore contribute support disproportionate to the benefits received, it is clear that property owners within the many districts but outside City of Industry receive the equivalent of a reduced tax burden.”  Conversely, “their only loss . . . is the inability to share in the City’s locally generated sales tax receipts, or, perhaps, to impose a municipal property tax.”

With respect to cost burdens and offsets, the study maintained that it was problematic to analyze impacts connected to nearby communities having more residents and school children requiring more services.  But, it continued, especially concerning school districts, “the City’s tax contribution surpasses the cost burden imposed.”  With registered cars and the issue of maintenance and repair of roads, it was observed that this cost exceeded in-lieu tax transfers, but the argument was that sales taxes on retail sales generated funds for local communities as something of an offset.

Consequently, the report continued,

On balance, it would appear that City of Industry has contributed a great deal to its immediate surroundings.  The hypothetical erasure of the City and its functions from the economic map of the area would constitute a serious net loss to the San Gabriel Valley.

The City had two major functions in the broader region; first, promotional as it played a key role in luring business and industry to greater Los Angeles (though it also sought to outdo local rivals), and, second, “the City must seek satisfactory working relationships . . . in county, district, and other cities’ offices to develop workable solutions to regional problems.”

The important of the city as an industrial center was measured by its growth outstripping that of the region and state, doubling its “relative importance” in its first five or six years and tripling it  between 1963 and 1970.  Its share of growth in assessed valuation doubled from 1958 to 1963, though a decline in that growth afterward reflected changes in land use concerning the proportion of industrial land as a share of total land area in the city.

Taxable retail transactions were lower than in the region broadly, because the presence of retail outlets “has not been encouraged.”  This rung true with planners, because a dramatic change ensued from the early 1970s onward, so that the Puente Hills Mall, other shopping and retail centers, and auto dealerships, among others, were and are a major focus for development in the city.

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Another table showed the change in the percentage of indicators reflecting the city’s share of regional growth, so that the number of workers, the payroll for those employees, and the value added by manufacture grew significantly, while those connected to assessed valuation and taxable retail transactions grew much less rapidly.  All this said, a note pointed out that “City of Industry’s share in Southern California has jumped so substantially and is expected to continue to rise” and this reflected “remarkable growth in absolute terms.”

With respect to that second role in working for solutions to regional problems, the report noted that there was “a general lack of success” that the City and other jurisdictions had in this area.  The problems of “friction and factionalism” were worsened by the complexity of the structure of the county, its cities, various district, and agencies.  Moreover, the city’s unique status meant that it “could claim few partners” in the solution-seeking arena.

Yet, it was also observed that there were views that fragmented conditions were the result of “a handful of select industrial and other special-purpose cities” and that the intractability of regional problems ascribed to these were “carelessly unrealistic.”  These views were considered “injurious to the need for compromise and the requirement for much hard work to solve the myriad problems facing the Southern California region.”

Next week, we move on to look at the report’s evaluation of “special-purpose cities” like Industry, guidelines on the future impact of the city, and regional problems.

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