July 11, 2018 - From the July, 2018 issue

Mayor Butts: Inglewood’s Economic Renaissance Continues

Since taking office in 2011, Mayor James Butts has transformed the almost cashflow bankrupt city of Inglewood into a booming center of sports, infrastructure and real estate investment. Set to host the Opening Ceremony of the 2028 Olympics, Inglewood has even begun to capture global interest. As the Mayor proudly states in this TPR interview: “The only thing that has changed in Inglewood is everything.” What follows is a master class in how to create a business-friendly city, attract investment and dozens of major employers, and balance the budget to boot.


James Butts

"Like Apple said about the iPhone 6, “The only thing that has changed in Inglewood is everything.” - Inglewood Mayor James Butts

Mayor Butts, update our readers on what some have called the City of Inglewood’s “economic miracle.” How did you build the business-friendly ecosystem that has attracted the Hollywood Park stadium, the Forum, and more? 

 James Butts: In 2014, when we negotiated the reopening of the Forum at Madison Square Garden, conventional wisdom said that people would never come back to Inglewood because of high unemployment, high crime rates, and poverty. Well, today, the Forum is the No. 1 concert venue in the state of California, No. 2 in the country, and No. 4 in the world.

In 2015, we began negotiations with the NFL for the Rams. Again, conventional wisdom said that Inglewood was just a stalking horse for St. Louis. Well, in January 2016, the NFL owners voted overwhelmingly to relocate the Rams to Inglewood, and in January 2017, the Chargers exercised their option to join them. In 2020, the Rams and the Chargers will play their first home season in Inglewood in the most expensive NFL arena in the world.

The LA Philharmonic is in the process of purchasing a commercial building in the Civic Center for the relocation of their youth orchestra program to Inglewood.  The building will undergo a $14 million redesign by Frank Gehry. This year, the Girl Scouts of the United States announced plans to move their regional headquarters from Marina Del Rey to Inglewood.

Over the next 10 years, events of nationwide and worldwide stature are going to occur in our city. In 2020, the NFL Network will move to Inglewood. In 2022, the Super Bowl will be held in Inglewood. In 2023, the NCAA college national championship Bowl Game will be played in Inglewood. In 2024, the Clippers will play their first season in a brand new, state-of-the-art NBA arena alongside their corporate headquarters and practice facility. In 2026, a FIFA World Cup may be held in the NFL stadium (negotiations are underway). And in 2028, the Olympic Games Opening Ceremonies will be held in Inglewood.

Our unemployment rate has dropped from 17.5 percent to 5.5 percent since I took office in 2011. We attribute that in large part to our development agreements for these major projects, which set a local-hire goal of 35 percent and include provisions for the “hard to employ”—like people who have had brushes with the law. Some of those individuals are working with the Iron Workers Union and make between $60 and $90 an hour, including benefits.

If you include non-spendable assets that could be converted to cash, our general fund reserve balance is about $87 million today. Our unobligated cash on hand at the end of this fiscal year is projected to be $31 million dollars. A few years ago, Moody’s issued an advisory saying that, as a percentage of our spending plan, our general fund reserve balance far exceeds any city that they rate nationwide. 

What do all these accomplishments mean for the city going forward? Compare your inaugural 2011 agenda for Inglewood, versus your ambitions now. How will the city take advantage of the economic successes you have chronicled here?

When I came into office, the city was about seven months away from cash flow bankruptcy. We had a huge structural deficit, and we were burning on average $50,000 a day more than we were taking in in revenues. We had to make a lot of tough business decisions, like putting employees on furlough, cutting 120 employee positions from the budget, and engaging in public-private partnerships for street-sweeping, tree-trimming, and parking control. We started doing smart business things to make services more efficient and cost-effective and to right-size the organization while we sought to attract the entertainment industry.

I’ve worked in three cities—Inglewood, Santa Monica, and Los Angeles—and I’ve seen that cities with entertainment survive recessions much better than cities that depend on their indigenous property taxes and internally generated sales taxes. That’s why the first thing I did when I came into office was seek conversations with Madison Square Gardens and the Raiders. The Raiders didn’t work out, but eventually we came upon Stan Kroenke.

The joint venture among the Hollywood Park Land Company, Stockbridge Capital, and the Kroenke Group started with the largest single contiguous block of open land in urban Southern California. It expanded upon the original plan, ending up with close to 900,000 square feet of retail and fine dining, over 800,000 square feet of Grade A office space, a movie theater, a 300-key hotel, a 70,000-seat NFL arena, four public parks totaling 26 acres, a 6,000-seat performing arts theater, 2,000 residential units of various flavors, and two lakes.

For Perspective, this development will be three times the size of Century City, three and a half times the size of Disneyland, and twice the size of Vatican City. Across the street, we’re negotiating to bring the Clippers headquarters along with an 18,000-seat basketball arena and practice facility.

This will be the sports entertainment economic center for Inglewood and the South Bay. We are re-establishing our long forgotten brand as the City of Champions.  We are adding culture and community to our brand.  This is evident from the broad spectrum of other entities that are coming here—the Girl Scouts, the LA Philharmonic, the NFL Network, Verizon—the Inglewood brand is something that people and organizations want to be associated with.

Speak to the evolution of the Inglewood ‘brand.” With all the city’s recent economic successes, what do you and your constituents anticipate the city will look like in five years?

Like Apple said about the iPhone 6, “The only thing that has changed in Inglewood is everything.”

First of all, the physical topography is going to change. It’s going to be modernized. You’re going to see a lot of the old housing stock turn over ownership  and be renovated and modified. You’re going to see unemployment continue to drop. You’re also going to see the children of Inglewood who go away to college have a place to come back to for mid-level and management and upper management careers that were not available here before. It won’t just be sports and entertainment. We have Marvin Engineering in our town; it’s the largest employer in the city. Other large employers like Don Lee Farms, Kaiser and Centinela Hospital will now be joined by other large entities.

Before, people in Inglewood had to leave town to get unique services and high-end retail. They won’t have to do that anymore. In fact, people from other towns will be coming here to spend their money—resulting in more tax dollars for the city, which will result in more police, more firefighters, and better library and recreation services for our children. We’re going to have a city that is largely self-contained.

Like all cities in the LA Metro area and California, Inglewood is facing demands for more housing and specifically affordable housing.  How is the City addressing such concerns?

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We’ve been doing affordable housing in Inglewood since 1969. Forty-three percent of the affordable housing units that have opened in those 49 years have opened during the seven years I’ve been in office.

We are opening PATH Villas, a 40-unit affordable housing development for seniors at Eucalyptus and Lime, in 2019. We are in the process of acquiring two parcels near Rogers Park to turn into subsidized affordable housing. We’re working with the County of Los Angeles to build 100 units of affordable housing on Redondo Boulevard. Over the next two or three years, we anticipate that we will add 170 affordable units.

Inglewood has more affordable housing per capita than anywhere in the South Bay. We also have the lowest average rent in the South Bay, and our average rents are lower than the state of California’s. Maintaining affordability for our residents isn’t something that we’re going to start doing; it’s something we’ve been actively engaged in. 

There’s a lot of pressure from the state Legislature to wrest control over housing density from local government. Given your local governance experience with planning, what are your thoughts on the role of state versus local governments in determining how housing is accommodated and funded?

I think it’s highly inappropriate for the state to attempt to determine housing density. Take, for example, the city of Inglewood. Most of this city was built in the 1940s and ’50s—back when every family didn’t have a car, and certainly, families didn’t have two or three cars. Now, we have more people and more families, and the cars that go with them. The parking that was built with our old housing is woefully deficient for our residents today, to the point that we’re now looking at turning public land into residential parking lots. For the state to blindly make decisions on housing density without taking parking requirements into consideration is a recipe for disaster.

Related to state/local governance, Inglewood’s successful negotiation with Clippers owner Steve Ballmer to build a basketball arena in your city was abetted by an expedited CEQA review exception granted by the Legislature. It’s been the dream over the last 25 years of many local jurisdictions, and others, to modify CEQA. What are your thoughts about what CEQA reforms are needed, especially on urban infill?

When it comes to the future Clippers arena, we’re only seeking the same legislative certainty that was afforded the Golden One arena, Oracle arena, Farmers’ Field, and Levi’s Stadium, and that is now being sought for the Oakland A’s stadium.

The thing about these huge multibillion-dollar developments is that time can kill them. Opponents—who are usually economic opponents—weaponize and fund CEQA lawsuits with the intent of dragging things out so that the builder will give up on a project. But in this case, this arena has to open in 2024, because the Clippers’ lease will be up and they need a place to play. All we’re asking is for a nine-month certainty window for challenges to be filed, court processes to be conducted, and adjudications held—and no injunctions barring some type of life-threatening situation.

More generally, if you’re going to provide housing and you want investors to invest in it, you need certainty for developments. I think the certainty window should be applied to every builder, because right now it’s just too easy to drag out a project, wreck the timeline, and kill it by destroying the financial prospectus.

Mayor, address transportation infrastructure’s contribution to realizing Inglewood’s growing economic ambitions.

I’m second vice chair on the Metro Board, and that is the biggest construction project in the state of California at about $14 billion. We’re doing a lot of exciting things: We hope to open the Green Line in 2019, and we are exploring a people-mover or last-mile option to get people from Florence/La Brea Station to the football arena, the Clippers arena, and the Forum. We’re looking at different options to keep people out of cars on their way there.

Before entering politics, you worked in public safety and law enforcement in a number of metro LA’s cities and the airport. Talk about the policing and cybersecurity issues that may accompany all this economic success.

The reality is that the issue of cybersecurity has been with us for a number of years. Look no further than the last presidential election and what happened with the server of the Democratic National Committee.

I spent five years in the Los Angeles World Airports system working in public safety and counterterrorism, so I’m very aware of the security issues involved in an undertaking the size of our new arena. A lot of the safety systems will be automated, so a secure computer environment is mandatory so that we know that all these systems are going to operate as they’re supposed to in the event of an emergency. 

Lastly, speak to the challenges of governing as a mayor with such an ambitious agenda, and with competition from 87 other cities in the basin, including Los Angeles.

I have an educational background in business (MBA) and public safety. Councilmember Elroy Morales has law training, Alex Padilla was a captain for me in the City of Santa Monica, Ralph Franklin was a manager of a supermarket chain, and George Dotson was a self-employed businessman. Inglewood’s city council is a blend of people who appreciate the fact that time is money, and that political uncertainty translates into economic uncertainty for businesspeople seeking to invest in a community—particularly a community like Inglewood that, at one time, didn’t seem to have any prospects.

Our council is very much unified in our vision, and that is attractive to investors. That’s why the NFL and Madison Square Garden first took a look/chance at/on us, and why the Chargers and the Clippers came; followed by the NFL Network; the Girl Scouts; the LA Philharmonic; Verizon and others. The problem that a lot of cites have is that the council, as a body, doesn’t appreciate the impact they can have on whether economic entities will land in their city. This council does appreciate that, and has done a marvelous job.

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© 2018 The Planning Report | David Abel, Publisher, ABL, Inc.