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

by Paul R. Spitzzeri

We continue with this “Time Capsule Tuesday” series of the first in-depth study of the City of Industry, conducted by the Stanford Research Institute and which helped provide the groundwork to the city’s 1971 general plan and other planning documents.

A notable portion of the report concerned an “Evaluation of Special-Purpose Cities” and four academic were asked to list reasons given publicly for and against these entities and to give their opinions about these.  The consensus of the quartet was that more “specific investigations” were needed, rather than “abstract generalities” and they agreed that most criticisms of these cities were based on personal views.

So, for the most persuasive arguments for cities like Industry were cited: 1) owners of land suited for industry “have the right to band together” for mutual benefit, including profitability, and to decide which form of government suited them best; 2) incorporation is a defense against “residential areas that seek to ‘milk’ the industrial areas economically; and 3) laws, tax structures, and government grant policies were not only more likely “but also necesary in some cases.”

As to why a special-purpose city was a problem, there were two reasons: 1) it is “not a well-rounded community in the traditional sense and does not provide an adequate community life for residents” and manufacturing should support the communities where workers and managers life, else the city is likely to “be dominated by outsiders, often leading to strife and factionalism”; and 2) removing an industrial tax base “deprives neighboring cities of a much needed tax base to finance services” and these disparities “further complicate the problems of regional planning.”

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While the report acknowledged that “there is some element of validity in all of the arguments,” it followed that some elements of each argument are based on false assumptions or could be applied to general-purpose cities.  Moreover, it went on “the ‘pros’ and ‘cons’ tend to nullify one another.”

This was followed by a discussion of future issues for the City of Industry’s leadership to consider.  One was what to do with the rising accumulation of cash reserves which “flaunts a challenge to envious officials” nearby, especially when announced commitments of these funds for road projects “seems specious because those dollars were “critically inadequate” to need.

With respect to roads, it was suggested that the city avoid the piecemeal approach that focused on “pay-as-developed” projects.  Instead, a master plan was needed to deal with all manner of street improvement (traffic patterns and flow, dealing with rail crossings, improved drainage, etc.)  It was a question of how to financially structure these improvements through bond issues in which the city paid the interest, but developers took care of paying off the principal.

With the city so dependent on sales tax revenue, it was assumed that “such receipts will not keep pace with the City’s industrial and economic growth.”  Moreover, “continuing attacks on special-purpose cities” and ideas of revising how sales taxes were distributed meant that there should be a review of revenue creation.

The study’s authors are suggested adding to the city staff to “relieve the [City] Manager of much administrative detail” and to make sure there was “professionally competent guidance” when the city manager “is unavoidably absent.”  In terms of leadership, the report also recommended “expanding City Council membership to give greater representation to the increasing diversity of economic and political interests owning property in the City.”  This would require “solutions to various statutory and political difficulties.”

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Concerning industrial development issues, the report called on the City to “reappraise the types of firm[s] that should be encouraged to locate” there.  A focus on small firms meant a “decline in taxable transactions” and “a downward trend in wage rate structure.”  So, giving attention to enticing companies with larger employee numbers and payrolls, more taxable transactions and other factors was suggested.

More attention was needed to promote the City’s “strongest selling points” including market proximity; the low cost of land; land availability; the city’s attitude towards industry (given particular emphasis by the authors); a strong labor pool and good housing stock in surrounding communities; and excellent transportation routes.  These involved the two major rail lines, more freeways, good utility supply and improved sewage disposal systems, and a strategic regional location.

Another point cited was to “discover corrective measures” over the concern of industrial business owners who “are fearful that the City will one day be without residents or registered voters or, worse, be peopled with unprincipled ones.”

As to neighboring areas and communities, the report recommended looking at the annexation of residential areas, not just undeveloped ones.  It specifically suggested looking into “annexing land along the City’s southern boundaries, at least as far south as the proposed Pomona Freeway” and “a strip along the south side of the freeway wide enough to accommodate industrial and/or residential sites.”

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It also, however, encouraged the City to “refute charges” that Industry was “an unfair ‘tax haven’ by noting that the city’s borders “are no barrier to many tax levies” by other agencies and entities.  The report noted that “the inclusion of the high assessed valuations of the City’s industrial properties . . . permits a lower tax rate to be levied” in those areas.  This lightened the burden on taxpayers and allowed more revenues “under the same total tax rate to go to other tax-levying jurisdictions.”

Other matters concerned looking into vandalism “purportedly coming from areas near the City;” improving unsightly commercial areas near the city; and dealing with combatng the decline of residential areas adjacent to Industry.

Finally, looking at regional issues, the report recommended addressing critiques that claimed that Industry was a tax haven (as noted above), specifically by pointing out that there were 16 other cities in the county that did not have a city property tax.  It noted that not having this one tax did not make the city a “haven.”

It also called for city leaders to advocate that the city provides “some psychological, political, and administrative advantages, especially in maintaining daily working relationships with local property owners” and that these outweighed negative connotations.  It went on to suggest that “economically, there are neither advantages or disadvantages directly related” to the city’s status as industrially oriented.

Rather, the city was encouraged to state that

the strongest and most valid criticism that can be directed in principle against City of Indstry rests simply on the fact that is is one among 75 [now 88] incorporated cities in Los Angeles County, any one of which, without regard to its economic base, represents fragmentation of the metropolitan region.  Even this line of argument is based on the not-unopposed assumption that regional planning is desirable.

Finally, the authors concluded that the legislature’s action establishing Local Agency Formation commissions probably would “forestall the future incorporation of additional special-purpose cities” whether for agricultural, residential, industrial or other uses.

Next week, the series moves to a section on the “Industrial and Economic Development of City of Industry” including the historical background of the area.

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