1
A BLUEPRINT FOR A 21ST CENTURY LOS ANGELES INFRASTRUCTURE 2 LOS ANGELES BLUEPRINT FOREWARD 3
LOS ANGELES BLUEPRINT
he Los Angeles Area Chamber of private and public sectors will have to TCommerce has played an instrumental come together to build the next generation role over the past 127 years in helping of infrastructure. A Blueprint for a 21st transform L.A. from a city of 50,000 people Century Los Angeles Infrastructure helps into one of the world’s largest population begin this process by calling upon our and economic centers. Integral to this local policymakers to develop a long-term, transformation was the development of our comprehensive regional infrastructure plan region’s infrastructure. The Chamber and that cuts across sectors and silos, and its members worked closely with local, state that clearly defnes the investments that and federal policymakers to successfully will be needed over the long-term. This advocate for the construction of some of document lays the foundation for such a the world’s largest ports, aqueducts, power plan by outlining unique infrastructure generating facilities, highway systems challenges and opportunities L.A. faces and and telecommunication networks. The by providing examples of how peer cities combination of these regional assets around the world are responding to similar enabled the growth that defned L.A. in the challenges. We also identify some of the 20th century. specifc investments, policy changes and tools needed to help address this challenge. L.A.’s infrastructure continues to drive our economic growth today, however, many of Our goal in releasing this document is to our legacy projects are now either in a state seed this critically important conversation of disrepair or not capable of meeting the between Los Angeles’ business and civic future needs of our evolving environment leaders. and economy. Exacerbating this challenge are public policies that make it more costly Sincerely, and increasingly diffcult to build new while also maintaining existing infrastructure. All the while competition is growing from other cities and regions across the world. Gary Toebben In order to maintain our economic President & CEO Los Angeles Area Chamber of Commerce competitiveness in the 21st century, L.A.’s 4 INTRODUCTION BACKGROUND
BACKGROUND
On Nov. 12, 2014, the Los Angeles Area assess L.A.’s infrastructure across key global Chamber of Commerce co-hosted a “State metrics, to identify how our peer cities and of L.A. Infrastructure” event, with the regions across the world are responding to Los Angeles Times, that brought together similar challenges and to call upon L.A.’s leaders of the largest private and public business and civic leaders to develop a sector organizations in the region to identify comprehensive infrastructure delivery plan the long-term infrastructure challenges and for the region. opportunities facing L.A.’s economy. More than 200 business and civic leaders from A Blueprint for a 21st Century Los Angeles throughout the region attended the day- Infrastructure is the beginning of an on- long event, which focused on L.A.’s energy, going campaign that the Chamber and water, transportation and telecommunication its members will embark on over the next sectors. decade. The primary goal of the campaign is to make a case for increased investment Several key themes emerged from the in our economy’s most critical infrastructure event, including: 1) the signifcant need for assets and to provide the private and public increased infrastructure investment across sector with the innovative tools to construct all the aforementioned sectors; 2) the and maintain our future infrastructure in a limitations existing local and state policies more cost-effective and sustainable manner. place on our ability to fund, construct and As this Blueprint will demonstrate, L.A. maintain our core infrastructure; and 3) is yet again at a crossroads in its history. the lack of awareness across economic How our policymakers and business leaders sectors and political jurisdictions regarding respond to our infrastructure challenges over the regionally signifcant infrastructure the next decade will determine how L.A.’s investments needed to remain economically economy will perform over the next century. competitive in the 21st century.
In response to the themes that emerged at the event, the L.A. Area Chamber partnered with Siemens — a global infrastructure provider — to develop a report that would WHERE LOS ANGELES STANDS TODAY INTRODUCTION 5
WHERE LOS ANGELES STANDS TODAY
A unique and positive environment exists a technology leader not just regionally L.A. is one of these rising star cities. It has in L.A. today that could secure L.A.’s or nationally, but globally. Today in L.A., the third largest city economy in the world competitive position as a global economic there is a clear ambition to improve its behind Tokyo and New York City, and its fve- leader for the coming decades. The City environment and create economic activity county metropolitan area is only surpassed and County of L.A. and the local business on the back of infrastructure. The L.A. Area by the entire states of California, Texas community agree that modernizing our Chamber’s membership is supportive of both and New York. The Greater Los Angeles infrastructure across the city and its region maintaining existing legacy infrastructure Metropolitan Region is a ‘mega region’ with is critical to maintaining and improving and rolling out key projects that beneft the a population well over 10 million people. L.A.’s economic competitiveness and business community at large. The City of L.A. and its greater metropolitan environment. The aligned interests to region is also one of the most densely promote L.A. as both an economic and As the world’s population continues to populated areas in the world. This may sustainability leader could result in faster rapidly urbanize, cities are competing not come as a surprise given L.A.’s reputation delivery of key projects and undertaking only for investment, but also for highly for sprawl, cars and traffc congestion. more and wider ranging initiatives. skilled people. Traditional global centers, such as London, Hong Kong, and New L.A. is known for being home to the global Rapid urbanization has been an issue for York City, now have to compete with entertainment industry. However, it is L.A. over the last 50 years, and the City cities benefting from fast-growing local also home to one of the largest high tech, and private sector have managed to keep markets, more modern infrastructure, and manufacturing, international trade, tourism up. However, the challenge today is more more affordable housing and labor costs. and goods movement sectors in the United signifcant as L.A.’s future is intertwined These are ‘rising star’ cities, and they States. For example, L.A. is home to more with the greater L.A. metropolitan region include Shanghai, Melbourne, Mumbai and manufacturing jobs than the entire state where connectivity, both physical and Seoul, as well as cities that are not even of Michigan. More than three million jobs virtual, and a high quality of life are recognizable to a global audience. Today, based in Los Angeles impact the national a shared expectation. More than ever, some of these cities offer a living standard economy, and the entertainment industry regions are realizing that the economic and that was once thought to be found only in has and continues to infuence the world. environmental benefts of delivering truly developed, wealthy countries. In short, cities modern infrastructure need to be linked cannot assume that past economic success together, and that new technologies need will continue without a forward-thinking to be embedded in new infrastructure if mindset and policy aims. regions want to position themselves as 6 INTRODUCTION BACKGROUND
THE CHALLENGES OF SUNSHINE
The attractiveness of Southern California, L.A. is a national and possibly global leader its warm climate and diverse topography, in reducing per capita water consumption; has meant that L.A. and its neighboring it is incorporating more clean energy communities have had to manage rapid and supplies into its mix than any other region continuous growth despite having limited in the United States; its road network is natural resources. L.A. also grew during a now complemented by the largest light rail time when the car was the dominant mode expansion program in the nation; and it’s of transportation, and the region built some in the process of cultivating a burgeoning of the world’s largest water, energy and road global high technology sector. However, the networks to meet its never-ending housing importance and costs of these challenges demand. Water shortages, energy crises, are regional in scale and cross city, county traffc congestion and a digital revolution and town lines. A coordinated, multi-sector, have all stretched the capacity of local regional approach that clearly outlines the networks; L.A. is a large water and energy infrastructure investments we need to make importer with an expensive road, water, to accommodate future population growth communication and electric distribution and attain already approved policy objectives system to maintain. Furthermore, the city is required. has ambitions to replace 70 percent of its energy supplies with more effcient and cleaner technologies and reduce its use of imported water 50 percent over the next decade. These are signifcant challenges, yet the L.A. region has shown that it can lead. INTRODUCTION 7
Effcient passenger and freight transport, affordable energy, responsive communication systems, and reliable water supplies are critical ‟in attracting and retaining talent and businesses.”
The purpose of this Infrastructure Blueprint • Identify the specifc steps and performing schools. These new standards is to: processes L.A.’s businesses, ensure an even higher quality of life for residents and policymakers need to residents, inducing more people to move • Outline the benefts associated take to develop a regionally based to cities and, importantly, to contribute to with developing a regionally based infrastructure plan. government coffers. infrastructure plan that can inform High-quality infrastructure has been proven the public on the City and County’s L.A. is well positioned to compete against to improve cities’ economic competitiveness priorities, and transparently illustrate other global cities in securing the best jobs in a global market. to the private and public sectors where and companies of the 21st century and investment should be targeted. Investing in infrastructure technologies, as remain a leader in innovation. But to do so, • Compare and contrast L.A.’s major well as committing to policies that support it must ensure that a positive policy in one assets to its peer cities around the them, is the primary way in which cities area is not immediately negated by other world among key infrastructure and can position themselves as world leaders — policies that limit the region’s ability to economic indicators. both now and in the future. Examples from attract the jobs and businesses of tomorrow. around the world demonstrate that effcient An infrastructure plan, which addresses • Provide examples of how peer cities passenger and freight transport, affordable the large amount of land, diverse industry are responding to similar infrastructure energy, responsive communication systems sectors and populations, and multitude challenges via technology and and reliable water supplies are critical of political jurisdictions in the Greater innovation. in attracting and retaining talent and Los Angeles Metropolitan Region, would be • Highlight some of the specifc businesses. However, these attributes are one giant step towards ensuring that L.A. is investments, tools and policy changes today considered to be ‘standard’ in all not only an urban powerhouse of economic the L.A. region’s business community developed cities. People and businesses are growth, but also a city pioneer in regional believes are needed to more effectively now asking for high speed communication, economic inclusion. build new and maintain existing enhanced security, cleaner energy, better infrastructure. air quality, affordable homes and higher 8 INTRODUCTION THE CASE FOR AN INFRASTRUCTURE PLAN
In a world where capital and jobs fow to the most effcient and attractive markets, modern, reliable, high-tech infrastructure is the primary ‟way to ensure a city remains competitive. THE CASE FOR AN INFRASTRUCTURE PLAN INTRODUCTION 9
THE CASE FOR AN INFRASTRUCTURE PLAN
The link between infrastructure and shorten the distance between businesses economic competitiveness is proven. The and consumers, frms, and employees, both strength of any urban economy is based physically and virtually, thereby cutting on the productivity of its human capital transaction costs. Studies have shown and its access to natural resources. that property values also tend to rise near Infrastructure connects both of these things infrastructure projects. For example, in to the marketplace, increasing mobility for Dallas, TX, proximity to the light rail system people and goods, facilitating effciency increased property valuations by 25 percent for businesses and residents, and opening compared to neighborhoods not near the new markets regionally, nationally, and even light rail system. Higher property values, globally to cities. It enables businesses to coupled with urban population growth, have obtain supplies, manage inventories, and resulted in more buoyant property markets deliver goods and services to the market and increased local tax revenues. In the quickly. This increases proftability for frms United States, the Brookings Institute has while lowering prices for consumers. This found that state and local governments fund also leads to agglomeration of economic 75 percent of all spending on transportation activity, which can accelerate productivity and water infrastructure, and the fnancial and create ‘sticky’ industries like the return comes back to local governments logistics industry in Southern California. predominantly through an increased tax Furthermore, infrastructure is a core base. A higher tax base typically results in economic input that ensures people can more funds for local schools and services, access jobs, education and other core which then retains and attracts additional services. In a world where capital and jobs businesses, further increasing the tax base fow to the most effcient and attractive and facilitating a positive investment cycle. markets, modern, reliable, high-tech infrastructure is the primary way to ensure Investments in cleaner sources of energy, a city remains competitive. energy effciency in buildings, public transit and intermodal freight transport can also Importantly for a city economy, have positive environmental benefts. In infrastructure projects can also produce the South Coast Air Basin, buildings and positive spillovers in terms of economic transport constitute about 80 percent development and improvements in of greenhouse gas (GHG) emissions. quality of life. In the short-term, investing Retroftting older buildings and improving in infrastructure provides good jobs public transit systems can reduce emissions at varying skill levels. Infrastructure and ameliorate air quality. If planned investment is a powerful government tool correctly, many energy, transit and building for counteracting an economic downturn investments can also have a secondary like the one experienced in 2009. In the beneft of improving local resilience to long-term, investing in infrastructure cuts natural disasters and expected changes in costs, creates value and can beneft the climate. environment. For example, faster transport and more reliable communications systems 10 INTRODUCTION WHY AN INFRASTRUCTURE PLAN?
WHY AN INFRASTRUCTURE PLAN?
Places that have benefted from natural simple fact that business members from the Resilience and sustainability are just advantages and invested in infrastructure L.A. Area Chamber have identifed projects two examples of cross-sector initiatives as they grew have by and large become the with cross-sector support is all the more that would beneft from this type of megacities we know and visit. Today, we remarkable. synergistic planning. assume that most successful megacities have both infrastructure and economic Policymakers across the region now have • Outlining priorities to the private sector. strategies and that these strategies are the opportunity to co-opt this message Infrastructure plans help the private mutually reinforcing. Policymakers certainly and create a strategy outlining how they sector identify key investment priorities, have ambitions and targets for the local will ensure that the right infrastructure is thus spurring the private sector to governments they oversee, but a well- available to its growing population in fve, explore mechanisms for public-private considered infrastructure plan that supports 10, 25 or even 50 years. The respective collaboration and fnancing. a region’s economic goals is rare. Rarer cities and county will need to ensure that yet is an integrated multijurisdictional local utilities and other private sector • Investment priorities. An integrated strategy delivered in partnership with the companies that own and operate private, strategy would need to compare apples local business community. The Los Angeles yet critically important aspects of our and oranges across municipal project Area Chamber of Commerce is challenging regional infrastructure, are also on track to silos, and require agreement on a set of this norm, and its membership has come meet predicted future growth. A strategy key performance indicators, economic together to put forward infrastructure of this size would require commitment and social — frst to prioritize both projects with cross-sector support. from the City of L.A., L.A. County and the investments and then to track their other communities making up the wider returns. There are reasons behind why these economic region. Cities have a long history strategies do not exist, as many local of managing local politics when fghting • Transparent public spending. A clear, governments do not have direct control of for a greater good — and a strategy of public strategy will tell people how their their entire infrastructure, and the private this magnitude would need senior level city and the wider region are planning sector, with control of key services, wants support from public agencies, offces and to leverage private investment and to deliver a cost effcient service that may their private counterparts. The combined spend their tax money. not ft with local and regional governments’ win would also have to be signifcant and long-term aims. Furthermore, businesses do include: • Signaling stability to potential investors. not want to invest considerable resources Infrastructure plans show confdence in project development only to lose out in a • Promoting projects across sectors and from city and county government in public tender. For all of these reasons, the identifying investments with the most rising real estate values, as well as positive impact across the region. in stable political administrations. INTRODUCTION 11
Furthermore, they demonstrate that integral to improving services, leveraging term job creation. Meanwhile, 84 percent a government is not only business- current investment and potentially attracting of Americans support greater investment to friendly and interested in building the future investment into the sector. address infrastructure problems. A study by infrastructure necessary to support the Rockefeller Foundation found that four economic growth, but also people- Globally speaking, support for infrastructure of fve Americans agreed with the statement friendly, committed to ensuring a high investment is high, both from the public that: “In order for the United States to quality of life. sector and from the public itself. In remain the world’s top economic superpower the United States, for example, federal we need to modernize our transportation • Justifying funding from state and policymakers are concerned that the U.S. infrastructure and keep it up to date.” Given federal governments. Infrastructure ranking in the World Economic Forum’s that household spending on transport is plans can be a helpful lobbying tool for competitiveness index has fallen from No. second only to spending on housing, this obtaining funding from higher levels of 1 to No. 14; outdated infrastructure was result comes as no surprise. government. cited as one of the main reasons for the drop. Indeed, The McKinsey Global Institute L.A. should capitalize on the public Infrastructure silos are merging and local has estimated that the United States will and political support for infrastructure governments will no longer be able to issue have to invest $150 billion per year until investment to develop a long-term separate strategies. For example, alternative 2020 to meet infrastructure needs, with infrastructure plan. A collaborative effort fuel vehicle sales are increasing, and most of those investments dedicated to air, to develop such a plan will address some transport and energy strategies will need to freight and passenger transport. A large of the major crises L.A. is facing with refect these market realities. The energy amount of that funding will be needed to regards to water supply, energy demand, strategy will need to consider how, when maintain existing infrastructure as opposed communication needs, and traffc and where these vehicles will be fueled and to delivering new forms of transport. There congestion, and position the metropolitan how demand will be met. To date, London are solutions to make benefciaries pay, area to grow in a more strategic and is one of the frst cities to have put forward and there are inherent subsidies in existing sustainable way. a transparent, cross-sector infrastructure infrastructure that make it diffcult to strategy. London 2050 also includes prove the economic case for more mass changes to cross sector communication transit. At some point tough decisions and will require representation from the key will have to be made. Policymakers at all infrastructure players, public and private, levels of government are therefore looking at future strategy meetings. Changing how to infrastructure investments to increase local and regional infrastructure managers, U.S. competitiveness and to drive short- public and private, communicate will be 12 HOW LOS ANGELES COMPARES L.A.’S HISTORY OF INFRASTRUCTURE PLANNING HOW LOS ANGELES COMPARES 13
HOW LOS ANGELES COMPARES
L.A.’S HISTORY OF INFRASTRUCTURE PLANNING
Despite L.A.’s reputation for sprawl, the City and County actually have a long history of leadership in infrastructure planning. For example:
• The Los Angeles Concept Plan of 1970 was a very modern plan • Every two years, the Los Angeles Department of Water and that was infuential in developing the multi-centric nature of Power (LADWP) updates its Integrated Resource Plans (IRP), L.A. today. This may look like sprawl, but there are in fact many which are roadmaps for providing reliable, affordable, and cities across the world that are actively trying to create more environmentally responsible electric and water service over a urban centers, whether it is to attract new employment sectors, 20-year timeline. The IRP takes into account future demand, create vibrancy or, more practically, to shift traffc patterns and regulatory requirements, advances in technology and other reduce congestion. factors. The LADWP updated its power IRP in 2015 and is in the process of updating its water IRP. • Californian cities are required by law to put forward a General Plan that guides long-term population growth and • In 2009, L.A. County’s Metropolitan Transportation Authority land development. While L.A.’s Concept Plan was a modern (Metro) released its Long Range Transportation Plan (LRTP), plan when it was originally developed, the City has yet to which takes a three-decade look ahead to identify what comprehensively update its Zoning Code since 1946. Over the transportation options best serve the County’s needs and past 65 years, the constant additions to the Zoning Code have expectations. The LRTP lists specifc public transportation led to a cumbersome, unclear and unnecessarily complicated and highway projects that have been approved, funding document, which no longer promotes the best practices forecasts over a 30-year timeframe, and project performance in planning. The City of L.A. is currently in the process of measures. Metro is in the process of updating its LRTP and updating its General Plan and reforming its Zoning Code. has identifed $300 billion in needed projects. This is a positive step forward for transparency, and it is an opportunity for key projects to be developed and promoted. As demonstrated by the plans referenced above, L.A. has several long-range infrastructure plans in place. However, these plans • In April 2015, L.A. Mayor Eric Garcetti released the City’s do not account for privately funded infrastructure such as frst-ever comprehensive sustainability plan. Sustainable City telecommunication, railroads and gas pipelines. These types of pLAn outlines a wide range of short- and long-term economic existing plans serve as the foundation for a more comprehensive, and environmental policy objectives that have the potential regional infrastructure plan, but alone do not provide the to deliver benefts and cement L.A.’s role as a technology specifcity and aggregated information that L.A.’s businesses leader. These projects will require substantial infrastructure community needs to plan long-term. investments and implementation plans throughout the region and will require widespread support to deliver. 14 HOW LOS ANGELES COMPARES INFRASTRUCTURE COMPARISON CHART
INFRASTRUCTURE COMPARISON CHART
INDICATOR LOS ANGELES NEW YORK CHICAGO HOUSTON
CITY POPULATION SIZE (MILLIONS) 3.9 8.4 2.7 2.2
POPULATION SIZE METROPOLITAN AREA 13.1 23.5 9.5 6.3 (MILLIONS)
LAND AREA CITY (SQ MILE) 469 304.8 227.2 599.5
LAND AREA METRO (SQ MILE) 12,562 13,318 10,874 10,062
POPULATION DENSITY CITY (PERSON PER SQ MILE) 8,282 27,778 11,864 3,662
POPULATION DENSITY METRO (PERSON PER SQ MILE) 1,042 1,765 874 626
POPULATION SIZE CITY IN 2025 (MILLIONS) 15.6 12.1 11.4 5.8
GDP PER CAPITA (IN DOLLARS) 60,406 63,238 54,953 64,226
PERCENT OF NATIONAL GDP CONTRIBUTED BY THE CITY 5.2 8.6 3.6 2.6
ELECTRICITY CONSUMPTION (PER CAPITA GJ) 27 65 31 50
EIU BEST CITIES REPORT 17 16 15 --
EIU LIVABILITY 2014 42 55 36 46
TRAFFIC CONGESTION INDEX 36 26 22 21
AIR QUALITY (ANNUAL MEAN PM10 UG/M3) 25 21 22 21
RENEWABLE ENERGY (PERCENT OF OVERALL 13.5 11 5 9.5 ENERGY MIX) (STATE) (STATE) (STATE) (STATE)
WATER CONSUMPTION (ANNUALLY PER HEAD IN 29.57 46.36 52.85 57.82 GALLONS)
Private transport: 74% Private transport: 33% Private transport: 66% Private transport: 88% MODAL SHARE Public transport: 20% Public transport: 28% Public transport: 27% Public transport: 6% Non motorized: 6% Non motorized: 39% Non motorized: 7% Non motorized: 6%
SOURCE: SIEMENS CITIES CENTER OF COMPETENCE INFRASTRUCTURE COMPARISON CHART HOW LOS ANGELES COMPARES 15
PARIS RIO DE JANEIRO SEOUL MOSCOW LONDON
2.2 6.5 10.1 11.5 8.6
12.2 12.1 25.6 15.7 13.6
40.7 486.5 233.6 970 607
6,631 1,759 4,581 1,800 8,382
54,000 13,930 43,000 11,865 13,870
1,839 6,879 5,588 8,722 1,623
-- 13.6 12.7 12.5 10.2
669 16,282 32,155 44,774 51,978
28 8.2 24.1 20.5 22
97 9 36.5 23 77
4 42 20 27 12
16 91 58 73 56
28 55 -- 66 27
38 64 64 33 29
13 39 1.6 0.8 17.8 (NATIONAL) (NATIONAL) (METROPOLITAN AREA) (NATIONAL) (NATIONAL)
28.93 29.02 20.04 29.60 14.82
Private transport: 32% Private transport: 16.5% Private transport: 26% Private transport: 20% Private transport: 37% Public transport: 62% Public transport: 46.5% Public transport: 69% Public transport: 80% Public transport: 40% Non motorized: 6% Non motorized: 37% Non motorized: 5% Non motorized: 0% Non motorized: 23% 16 HOW LOS ANGELES COMPARES INFRASTRUCTURE COMPARISON CHART
INFRASTRUCTURE COMPARISON CHART
This planning is incredibly important how invested the local government is in What this comparison also underscores and has had results in physically shaping maintaining and growing the city — all of is that L.A. is not only a relatively dense L.A. while driving economic growth. This these and more play roles in their choice. city, but its public transit system is small section’s infrastructure comparison chart when compared to some of its competitors. compares L.A.’s current infrastructure Here are a few key observations from this New York, Paris and London all have large with some of its main city competitors. comparison: underground metros and suburban rail Competitor cities were chosen on the systems that extend far beyond the city basis of many factors: population size, • L.A. ranks third out of four U.S. center with both under and over ground density, climate-related and topographical cities for public transport use; L.A.’s sections. These cities took a decision to attributes, GDP and industry mix, and a congestion is not the worst. invest in rail and they are continuing to few other intangibles (cultural attractions, • Residents of L.A. consume less expand services. London’s Crossrail, New for example). These cities are national or electricity per person than in the other York’s Second Avenue Subway and le Grand regional logistics hubs, leaders within a U.S. cities and wealthier global cities. Paris Express illustrate that the economic larger metropolitan area, global cities in case for these systems is still strong. These their own right or rising star cities. Although • Electricity in L.A. is some of the cities are not expecting the systems to be L.A. may not be competing with these cities greenest in the world. self-fnancing; however, they are looking for geography-dependent products and for ways to recover a portion of the costs • Air quality in L.A. is the worst services, it is certainly competing with them through Tax Incremental Finance or some amongst U.S. cities, but better than in for mobile jobs and investments. form of land value gain tax. Delivery of L.A.’s international cities. Westside Purple Line Extension would be a As globalization tightens its hold on the What is striking about the outcomes positive contribution to the City’s growing world economy, infrastructure will be a main of the city comparison is that despite public transportation network and would differentiator in businesses’ re-location L.A.’s reputation for being a sprawling start to bridge the gap in rail provision. The decisions, and the chart refects many of the nonsustainable city, its residents use less extension is expected to increase ridership indicators businesses use to compare cities. electricity, more of which is generated by 49,000 passengers per day and create The size of the existing local economy, the from cleaner sources, than the other cities. 52,500 jobs when completed in 2035. availability of employees, the city’s natural Some residents are taking advantage of the attributes, its accessibility and transport sunshine by walking or cycling, and city networks, how the city is powered, and government expects this number to increase. INDICATORS FOR NOW AND IN THE FUTURE HOW LOS ANGELES COMPARES 17
INDICATORS FOR NOW AND IN THE FUTURE
Cities around the world are being asked to • Whether car ownership is necessary plans looking ahead 20 to even 30 years. deliver more, and many are rising to the • Speed and comfort of public transport There will be a need to look across sectors, challenge. The idea that cities can do more and the private sector will be challenged and can learn from each other is why city- • Housing types and styles available to see how they can best support local based organizations, such as C40 Cities and • Speed of data connections government aims, as well as where their ICLEI, have grown so quickly. individual business interests lie. Technology • Security will play a role and the private sector will While the chart on pages 14 and 15 On these indicators, it is less clear how L.A. be critical in developing platforms that can measures use of public transport and the would compare to its main city competitors. be integrated across government services. prevalence of cleaner power, we expect We expect that L.A. would score incredibly Remaining competitive will be a challenge that in the future people will be demanding well on its natural beauty, but far less well for regions, and there is an increasing more from their cities and that quality of on how much time people spend commuting need for leadership as gridlock and ballot life issues may become a key driver for city to work, the resulting loss of productivity requirements in California hinder national growth. Cities may distinguish themselves and time spent with family. Because of and statewide initiatives. by: changes in technology, time spent on public transport today in many large cities is now • Average commuting times or ease of the used to respond to emails or purchase journey groceries. The fipside of driving door-to-door • A city’s particular ethos or politics for the driver is now a loss of productive time; multiplied across a city, that is a real • Beauty and air quality of a city economic cost. • Accessibility to green space Modern cities are being asked to deliver • Entertainment offerings more services, typically on shrinking • Accessibility for the very young and old budgets. The private sector will be critical • Proactiveness of local government to delivering more tasks, and technology will also play an increasing role. We see real • Not how much tax you pay, but how tax value in governments and the private sector money is spent putting forward joined-up infrastructure 18 HOW COULD LOS ANGELES DO BETTER? HOW COULD LOS ANGELES DO BETTER? 19
HOW COULD LOS ANGELES DO BETTER?
Investments in transport, energy, water and This section discusses infrastructure in telecommunications infrastructure drive four sectors: transport, energy, water and economic competitiveness among regions, telecommunications. We chose these four and the regions that have been successful sectors because they represent areas where in adapting to the demands of the 21st the business community in the United century global economy have leveraged States has traditionally been involved support from both public and private with the local government on funding, sectors to do so. The next section considers fnancing, implementation and operation some of these examples. It draws on case of infrastructure. However, they are by no studies from London’s transport system, means exhaustive, either of the physical Seoul’s high speed network, New York infrastructure normally associated with City’s green buildings campaign, and other the built environment or of the social competitor cities’ water and energy networks infrastructure that supports it and the to understand the elements of successful people who use it. Follow-up discussions implementation — and to determine how from the publication of this Blueprint could they might inform recommendations to L.A. include broader consideration of other infrastructure. 20 HOW COULD LOS ANGELES DO BETTER? LEADING TECHNOLOGIES AND POLICIES IN TRANSPORT
TRANSPORT
L.A. has made great strides in improving businesses to invest and employees to With the support of the private sector, L.A. poor air quality related to vehicular traffc, remain, it will have to more effciently move is fnally poised to tackle the challenges of as well as reducing congestion on its people and products through L.A. congestion, and to do so, it can look at some highways. But to many, the City still calls to of its competitor cities as examples. London mind past images of clouds of smog hanging L.A. is already investing $40 billion in rail, has been moving a lot of people around for over traffc-stricken streets. rapid bus and other transit improvements, a long time, and the city has learned some creating the largest public works project good lessons along the way. One of those If L.A. wants to be competitive in the future, in the United States That investment, in lessons is that transport transformation it will have to address head-on issues addition to the region’s increasing emphasis happens when strong executive leadership surrounding both passenger and freight on active transportation, will likely improve from the local government is informed by transport. It will have to do so, not only the modal share of walking, cycling and fnancial and technical inputs from the because congestion costs city inhabitants public transit throughout the region. private sector and aligned with a supportive time, money and personal health, but also national government. A good example is because business leaders from around the The L.A. Area Chamber’s list of member- London’s simultaneous implementation world consider transport infrastructure to be approved projects supports many of the in the early 2000s of the Congestion the number one driver for economic growth. region’s goals for transport. The Westside Charge, the Low Emissions Zone and bus L.A. is the most traffc congested major Purple Line Extension Section 2 and the prioritization technologies. city in the United States, with Angelenos Los Angeles International Airport (LAX) wasting on average 64 hours in traffc Landside Access Modernization Program When the frst Mayor of London came into annually according to the INRIX Traffc will ensure connectivity for Angelenos, both offce in 2000, he had limited taxation Scorecard, 2013. within the City and to outside markets. powers, but he did have control over London’s The BNSF Railway Company’s Southern Transport Agency, Transport for London (TfL), The opportunity costs of congestion, the California International Gateway, Union strategic planning and the environment wasted productivity, and the delayed Pacifc’s Intermodal Container Transport and waste. Building on the momentum of logistics, among others, are estimated at Facility, and even the newly piloted the newly formed position, his frst act was 1 to 3 percent of metropolitan GDP in e-highway concept in Carson, CA, facilitate to work with TfL to create an aggressive U.S. cities and, according to the American logistics in the nation’s busiest ports, transit strategy that addressed decades- Public Transport Association, transportation bringing products to market more quickly long underinvestment in existing or new generates 38 percent of all California’s and with less impact on the environment. infrastructure, congestion and air pollution. GHG emissions. If L.A. wants to attract LEADING TECHNOLOGIES AND POLICIES IN TRANSPORT HOW COULD LOS ANGELES DO BETTER? 21
What they came up with was a series among all of those investments seeming to of short-term actions that would build serve businesses, the City also created the long-term momentum for larger transit London Cycle Hire Scheme, which now has investments. The Congestion Charge 10,000 bicycles, and rolled out separated charged passenger cars for entering into Cycling Superhighways so that cyclists Central London, immediately reducing could ride protected across London. It built congestion while providing a steady revenue 1,300 public charging stations for electric source for the city. The Low Emissions vehicles. In short, London bet big that Zone fned trucks driving within London’s building a transport network that connected boundaries that did not meet a certain the city both internally and to the rest of European emission standard. Both revenue the world would pay off. Already, experts streams allowed London to gradually replace are estimating that Crossrail alone will add its outdated bus feet with hybrid buses, an estimated GBP 42 billion to the UK which now run on less congested, cleaner economy (14 percent of London’s economy roads — a fact that was well noted by today). happier commuters. Meanwhile, the Mayor, TfL and the UK government worked closely Like London, the cities that are best tackling with the private sector to design Crossrail, the challenges posed by congestion are an ambitious rail project that would set up embracing an integrated approach towards London for a bigger and brighter future, transportation, incorporating pedestrian increasing capacity on existing Underground and cycling strategies with alternative lines and connecting outer boroughs of the fuel vehicles and bus technologies, as city. The design included a fnancial plan; well as longer-term plans for light and TfL would provide some fnancing directly, heavy rail networks. Importantly, they are with the private sector contributing to the also investing in these types of transport project by way of the Crossrail Business infrastructure all at once, leveraging smaller Rate Supplement and the Community investments in streetlights or sidewalks to Infrastructure Levy. Lest anyone doubt gain both political and fnancial support for that London was still a center for people larger ticket items. 22 HOW COULD LOS ANGELES DO BETTER? LEADING TECHNOLOGIES AND POLICIES IN ENERGY
ENERGY
California has long been regarded as a But L.A. must match effcient and cleaner The impacts of GGBP may be easy to pioneer in the energy sector in the United energy generation with effcient transmission measure, but the regulations themselves States. Los Angeles, in addition to having and use of energy. This means implementing can be painful to implement. Navigating to adhere to state regulations, has set energy effciency technologies in homes and the complexities posed by owner/tenant ambitious targets of its own: increasing offces, incentivizing users to consume less relationships, retroftting costs, permitting installed PV power from 1,500 to 1,800 energy, and matching energy supply and systems, a high number of individual MW by 2035 and divesting of coal-powered demand more closely. owners, and, in some cases, long repayment plants completely by 2025. periods has been challenging. The GGBP Seventy-fve percent of New York City’s requires signifcant investment from the To accomplish these goals, L.A. will have to GHG emissions come from commercial and private sector to retroft old buildings and consider the spectrum of energy generation residential buildings. When Mayor Michael to construct new, green ones, and although technologies, including cleaner conventional Bloomberg released PlaNYC in 2007, saving costs to consumers, it may mean sources such as natural gas. Competitor the sustainability plan included a special that traditional utility companies may lose a cities have found success in embracing section on short-term programs and long- portion of their existing revenue base if they aggressive energy effciency budgets, term initiatives for reducing emissions from do not adapt. Some utilities are creating building waste-to-energy plants, and buildings. Passed in 2009, the Greener, subsidiary energy service companies in order retroftting older plants with new automation Greater Buildings Plan (GGBP) incorporates to win a piece of the new business. However, and controls or with new turbines so as to four regulations. It imposes energy effciency the sector is changing and because of these increase effciency. regulations on homes and businesses. It challenges, the New York City government mandates annual benchmarking for energy has had to work closely with the private The L.A. Area Chamber supports the use and water consumption in large buildings. It sector on methods for collaboration. The of natural gas for power generation and enforces compliance with a more stringent NYCEEC, for example, has been integral Southern California Gas Company’s Pipeline energy conservation code. And it creates the in unlocking fnancing mechanisms, which Safety Enhance Plan, which will test and New York City Energy Effciency Corporation the private sector can leverage to make replace the pipelines that carry the natural (NYCEEC) to help fnance energy audits and improvements. gas that will help replace coal-generated retro-commissioning. Overall the city is set power. to beneft over time through energy savings Following New York City, L.A. is launching and job creation. its own energy effciency programs for LEADING TECHNOLOGIES AND POLICIES IN ENERGY HOW COULD LOS ANGELES DO BETTER? 23
buildings. Operated in partnership with the in New York City was that energy could Department of Energy, the Better Buildings be more reliably supplied under extreme Challenge addresses emissions in large- conditions with micro grids and properly scale buildings. The Existing Buildings protected substations. L.A. is in the perfect Stakeholder Group, with the City Energy position to use its municipally owned Project, leverages the knowledge and utility to leverage the political momentum support of L.A.’s business community to from state regulations and the public come up with ways of incentivizing energy momentum from Californians’ environment- effciency. forward attitude to push more experimental approaches towards clean, effcient energy Whereas New York City faces the challenges generation and consumption. The L.A. of working with a privately-owned utility business community would welcome to adopt energy effciency and resilience discussions with LADWP on piloting measures, L.A. benefts from having one of innovative energy technologies across the a handful of municipally owned utilities in city. the United States, LADWP. And although other cities may have been frst to launch energy effciency programs, L.A. and LADWP could lead the way in using cutting-edge technologies to facilitate bi-directional energy fow on local grids. Micro grids, smart metering, electric vehicle chargers, energy storage and smart street lights have been shown not only to reduce emissions, but also to increase resilience. A major earthquake in L.A. has the potential of knocking out power for more than two weeks, and among the lessons learned from Hurricane Sandy 24 HOW COULD LOS ANGELES DO BETTER? LEADING TECHNOLOGIES AND POLICIES IN WATER
WATER
Lack of water is a critical issue for many there is scope for further reductions, which How water is sourced is a highly contentious cities, and expected population growth and should help to meet Governor Brown’s aim issue and good watershed management more extreme weather conditions will only to reduce statewide consumption by 25 is critical to preserving water quality as deepen the complexity of water sourcing, percent and Mayor Garcetti’s goal to reduce well as the environment and biodiversity. transportation, treatment, and re-use. The per capita consumption by 20 percent by L.A. sources most of its water locally, frst action a city or region can take is to 2017. It also means that there could be and two of the projects the Chamber best manage the water that they do have some additional role for smart metering to supports, Remediation of the San Fernando by reducing overall water consumption and play in achieving reductions. For example, Groundwater Basin and California Water Fix, leakages across the system. Following water two-way sensors are relatively easy and are essential to maintaining a stable supply conservation and reduced leakages, utilities inexpensive to install at building sites and of clean water. Technology can be enlisted can take action on how water is sourced, enable real-time monitoring of water use, to more effciently pump water over long how it is transported, treated and re-used. which can be displayed to consumers via distances or to desalinate local sources; Within all of these areas, technology web-based platforms and can be used by however, pumping and desalinating water plays a signifcant role, and there are real utilities to determine where leakages may be are energy intensive and expensive. This opportunities for cities. occurring. means that energy effciency and design measures that decrease energy demand or Los Angeles has become a national, if not Reducing water leakage seems simple the distance water is pumped can yield real global, leader in water conservation. Records enough; however, it is very expensive to cost savings along the value chain. The EPA show that the City of Los Angeles now identify the leaks and to repair them as estimates that the supply of treated water consumes less water than it did in 1970 this often means digging up streets and and wastewater management consumes — despite population growth of more than sidewalks. The UN reports leakage loss 3 percent of total energy use by cities; one third over the same time period. Actual rates of up to 50 percent in urban water however, this number jumps to 20 percent per capita water use varies signifcantly distribution systems, with an estimated 250 in California. across the city. Residents served by the to 500 million m3 of drinking water lost in LADWP used on average 93 gallons per megacities each year. Many cities are now Even for facilities not powered by person per day, and in some parts of the tackling this problem and they are renewing renewable energy sources, automation and city water usage was as low as 46 or as their aging water network; however, even the digitization of water treatment processes high as 286. The large difference between wealthiest cities are struggling to deliver. can improve energy effciency at the plant average per capita use across the city means level signifcantly. In the developed world, LEADING TECHNOLOGIES AND POLICIES IN WATER HOW COULD LOS ANGELES DO BETTER? 25
retroftting water treatment plants with cities rethink their water networks and push and city governments have instead opted automation and digitization technologies the envelope of technology and design. for other techniques in order to best target can mean major cost savings for municipal Some examples of forward thinking in water their water investments. Hydraulic modeling utilities, as treatment often accounts for management include: is one such technique. It uses statistical between 40 and 60 percent of a municipal and mathematical algorithms to analyze government’s energy consumption. • A desalinization plant in Perth, raw data from water utilities and compares Automation and digitization technologies Australia, is powered by renewable results from across the system over time. include sensors, which collect data on wind energy and uses reverse osmosis Changes in pressure and fow are detected water quality and fow. Instruments, such as technologies to provide 20 percent of and probable causes are provided. This temperature gauges, then analyze this data, the city’s potable water. enables utilities to send maintenance crews sending signals to control products, which only to issue areas, directly targeting leaks take action based on system data. These • A wastewater treatment plant in without having to rip up lots of pavement or control products may shift temperatures Higashinada, Japan, generates repair long lines of pipes. In Antofagasta, or change the balance of chemicals during energy in the form of biogas from the Chile, using hydraulic modeling enabled the process. They also separate potable actual wastewater using an anaerobic the city to double the reduction in leakages water ready for residential distribution from digestion process. The treatment with the same number of repairs. Given nonpotable water, which has lower energy plant generates 10,000 normal cubic the complexity of moving potable water, intensity for treatment and can be delivered meters of biogas per day, 45 percent of using technology to provide smart fxes directly to industrial customers. Displays which is used to power the treatment makes sense, especially when L.A. has set on distributed control systems in the plants plant itself. Another 20 percent goes a target of replacing 95 miles of water pipe visualize both data and actions, aggregating to fuel vehicles, demonstrating that infrastructure by 2017. inputs and outputs into a program easily infrastructure investments can address controlled by individuals either on- or issues in more than one industrial off-site. Combined, these technologies sector simultaneously. guarantee water quality by purpose and without waste. Ideally, cities would have smart pipes and valves with embedded technology to monitor Necessity, from a lack of natural freshwater, water fow and detect leakages. However, cost of energy or both, is making many these are expensive and diffcult to install 26 HOW COULD LOS ANGELES DO BETTER? LEADING TECHNOLOGIES AND POLICIES IN TELECOMMUNICATIONS
TELECOMMUNICATIONS
Although surveys show that city business lighting, temperature sensors and room is particularly true in L.A., where there leaders and policymakers still rank automation, can reduce energy consumption are more high-tech jobs than any other transport investments highest in terms of in buildings by 40 percent. Expansions metropolitan region in the United States. To contributions to economic competitiveness, of smart grids, which better match energy attract these industries, global cities need there is growing recognition that supply and demand by using monitors, high-speed connections for local and global telecommunications is the glue that ties sensors, and controls to facilitate two- business. They also need a workforce that infrastructure together. With the Internet of way fow and provide incentives for low can utilize and push forward the capabilities Things, sensors, controls, electronics and usage, cost up to 40 percent less than of technology. software are embedded into infrastructure conventional grid over the lifetime of the enabling data, analysis of information and technology. For cities increasingly asked to Seoul, South Korea, is the primary example the automation of control processes — all deliver more services on a smaller budget, of a city that has embraced both the by virtue of being connected via Internet. connecting infrastructure to technology Internet and the Internet of Things as This interconnectivity improves the through the Internet of Things is one way paths toward economic competitiveness. effciency and reliability of infrastructure. to cut costs in the longer term by investing It is the best connected city in the world It enables systems to understand (and then in the short term. It is also a way to ensure in terms of Internet speed, and the local predict) how and when people are using competitiveness in the long run, as older government is now working to connect infrastructure, as well as how and when infrastructure can be updated with new people to the Internet not just in their infrastructure starts to break. By doing technology less expensively than complete houses and businesses and on subway lines, this, it cuts costs during operation and replacement while still capturing a good but also at every outdoor space and street maintenance. portion of the benefts. corner city-wide. This level of connectivity is helping Seoul deliver government services, For example, intelligent traffc management In order to embrace the Internet of Things, such as emergency response, inspectors, systems, composed of camera-equipped though, cities must embrace the Internet, maintenance, and even parking meter lights and sensor-equipped transit vehicles, and they can so do so by realizing that readers. It is also a main part of Seoul’s can adjust signals based on actual traffc Internet connectivity has implications not economic growth strategy. From its collapse fow and, as a result, can reduce traffc only for infrastructure, but also for residents in the 1990s, Seoul has risen to be the 4th jams, accidents and carbon emissions and businesses. Global cities attribute a largest metropolitan economy in the world, by up to 20 percent. Smarter building growing percentage of gross metropolitan home to 15 Fortune 500 companies and the technologies, such as demand-oriented products to high-tech industries. This top-ranked city in technology readiness. LEADING TECHNOLOGIES AND POLICIES IN TELECOMMUNICATIONS HOW COULD LOS ANGELES DO BETTER? 27
In 2011, the local government announced effciency of cable routes. Seoul is also “Smart Seoul 2015,” a plan to bolster four times more dense than Los Angeles, sustainability and competitiveness in which made the task of connecting homes the city through the implementation and businesses with telecom networks of technology. This plan has been the a far easier one than in sprawling cities. City’s primary mechanism for achieving Seoul succeeded in becoming the fastest change. It lays out the mechanisms by connected city in the world partly because of which the Metropolitan Government these political and social advantages. But it shares responsibility with both citizens was also partly because it actively changed and businesses for implementing its policies to facilitate cable laying, telecommunications infrastructure. For coordinated public-private partnerships, example, Korea Telecom invested in Wi-Fi encouraged private investment and drove on all of Seoul’s subway trains. Citizens competition among the private sector to have access to Seoul Open Data, which has provide service. aided them in coding city-oriented apps — a particularly helpful way of interacting with To accomplish a similar level of change, L.A. the 97 percent of Seoul residents using will have to commit to telecommunications smart phones. as one of its infrastructure priorities, gaining buy-in from the state government Like London and its transport projects, to fund projects and collaborate with the City of Seoul had the support of the private sector companies. L.A. will also national government and of the city’s have to create the right policy environment signifcant business community in adopting for rapidly deploying telecommunications and rolling out telecommunications infrastructure. By streamlining the infrastructure. In fact, because becoming permitting process, simplifying standards an Internet-connected society was perhaps and outlining conditions for public-private the top priority locally and nationally, Seoul partnerships, local governments can lower Metropolitan Government faced few hurdles costs and expedite construction. with regards to laying cables and maximizing 28 HOW COULD LOS ANGELES DO BETTER? RECOMMENDATIONS RECOMMENDATIONS HOW COULD LOS ANGELES DO BETTER? 29
RECOMMENDATIONS
Indicators referenced in this document 2. That the region explores more ways demonstrate that the L.A. region is very of funding projects and sharing risk competitive in terms of how much energy with the private sector. The private and water its citizens utilize. However, it sector will also need to embrace new also demonstrates a lack in public transit funding models that may require its that can better improve intraregional commitment over the longer term so mobility. L.A. needs to do more to maintain that high quality operation/maintenance this leadership as other global cities can be obtained. continue to invest signifcantly in their infrastructure. The private sector is eager to work with local governments and the county to ensure that Our research has shown that successful L.A. builds and maintains the infrastructure implementation of transformative it needs to remain competitive in the infrastructure investments in regions around long term. Following, we list our three the world have depended on two things: recommendations for how policymakers can collaborate with L.A.’s business community 1. That the local governments work to achieve the vision of an equitable, closely with the private sector to draft sustainable and thriving L.A. now and in the an infrastructure delivery strategy, and future. that this delivery strategy identifes technologies appropriate for the density and topography of the region. 30 HOW COULD LOS ANGELES DO BETTER?
DEVELOP A LONG-TERM, MULTI-SECTOR INFRASTRUCTURE DELIVERY PLAN FOR THE REGION
The City of Los Angeles has an ambitious typically results in wasted opportunities and Sustainable City pLAn, and along with that economies of scale. Where cross-cutting plan are several long-term infrastructure issues, like resilience and sustainability, are plans describing how a governmental or concerned, this is especially the case. regulated entity will meet the long-term needs of its customers. LADWP has an We recommend that the City and Integrated Resource Plan that outlines how County of L.A. lead the way in writing a the Department will fulfll their water and comprehensive infrastructure plan for power needs over the next 20 years; the City the region. Information in existing plans Planning Department has a General Plan could be aggregated across sectors and that guides land-use development over the political jurisdictions, augmented with the next 30 years in order to manage population long-term needs and projects of private growth; and L.A. Metro has corporations, and coupled with long-term a Long Range Transportation Plan and funding forecasts so consumers are aware Los Angeles Department of Transportation of how much funding is needed and (LADOT) has a Strategic Plan that describes how much prices are likely to increase how the implementation of certain for core services over a certain period of projects and programs will help meet the time. Beyond development of a regional transportation needs of L.A.’s businesses infrastructure strategy, L.A. could also work and residents over the next 30 years. with the business community to write an infrastructure delivery plan. Such a process These types of plans help L.A. businesses would leverage the considerable knowledge and residents better understand how the private sector has of the types of government plans to meet their long-term infrastructure that meets current needs and needs and expectations. These strategies future demands and would set a timeline have their strengths and help guide the for implementation. Importantly, the private sector, but do not include the role inclusive process and resulting cross-cutting and investment of private corporations and document would demonstrate to L.A.’s more could be done to engage the private business community that its policymakers sector at the outset, particularly in the are thinking about and planning for the sectors that are predominantly private, such region’s long-term infrastructure needs. as telecommunications. Furthermore, these plans are often for just one city and most of the infrastructure discussed in this Blueprint will go beyond city limits. A lack of regional coordination on infrastructure planning HOW COULD LOS ANGELES DO BETTER? 31 32 HOW COULD LOS ANGELES DO BETTER?
CULTIVATE A POLICY ENVIRONMENT THAT ENABLES PRIVATE COLLABORATION ON INFRASTRUCTURE PROJECTS TO ACCELERATE PUBLIC SECTOR GOALS
One of the main factors infrastructure rooftops in commercial and industrial these lawsuits seek to halt environmentally companies weigh when investing in a city zones subject to certain restrictions. By desirable projects like clean power, infll is cost of doing business. Implicit in this right, consideration should also be given and transit. It is time to modernize CEQA cost is time — time needed to respond to commercial zones, parking zones and to conform with California’s comprehensive to a request for proposal, time between other zones as appropriate. The Chamber environmental laws and regulations. acceptance of proposal and actual project recommends that policymakers provide Thoughtful CEQA reforms can preserve kickoff, and delays between start and fexible work hours for businesses that are the law’s original intent — environmental completion of a project. As these costs building core infrastructure. The City could protection — while preventing special rise, companies either choose not to bid on exempt infrastructure companies from the interest CEQA abuses that jeopardize projects or they absorb the costs. Absorbing prohibition against street cuts within one community renewal, job-creation and the the costs of unnecessary delays means year of paving if the permittee agrees to environment. Modernizing this outdated that they have fewer funds to bid, lowering resurface the entire block curb face to curb law would help reduce construction costs competition for bids on other projects and face and/or intersection containing the and delays, create thousands of jobs in affecting the number of projects a city is excavation. the process, and ultimately improve the able to complete in a year. These outcomes competitiveness of L.A. relative to other are undesirable, particularly for a region The Chamber also recommends that local cities in the United States and beyond. wishing to expand and accommodate a governments consider design and location rapidly growing population and economy. preferences to better guide infrastructure Provide diverse mechanisms for funding and providers. Projects that meet these fnancing Whether it is a new cell tower, advanced preference requirements could be granted meter, solar project or rail yard, expedited permits. For example, design and Streamlining permitting processes and infrastructure projects of all types and sizes location preference could include stealth simplifying environmental standards require some form of local permitting in designs and stealth type structures in will reduce the costs of implementing order to be constructed or installed in L.A. specifc zoning districts. infrastructure in L.A. But they must be Because L.A.’s zoning code and construction supplemented by diverse mechanisms for policies and programs are signifcantly Simplify environmental standards funding and fnancing, which recognize outdated and under-resourced, many basic that infrastructure projects have different infrastructure projects—including those that California is well known for its tough stakeholders, different timelines, different provide core goods and services—are often environmental standards. When the benefts and different challenges. subject to costly and lengthy delays. These California Environmental Quality Act (CEQA) costs are then passed on to consumers, was enacted 40 years ago, the wide array of L.A. is already utilizing some of today’s which in turn have discouraged private local, state and federal environmental and cutting-edge funding and fnancing companies from investing in the region. land use regulations that are now on the mechanisms. Organizations like the West books didn’t exist. CEQA was essentially Coast Infrastructure Exchange (WCX), a The L.A. Area Chamber therefore it. In the 40 years since, Congress and the nonproft that provides technical advisory recommends that cities and the county Legislature have adopted more than 120 and convening services to California, cultivate a policy environment that laws to protect environmental quality in Oregon, Washington and British Columbia, facilitates private collaboration on many of the same topical areas required to is leading in facilitating public-private infrastructure projects. Below is a set of be independently mitigated under CEQA, partnerships (P3) on infrastructure projects. policy changes that would lower the cost including laws like the Clean Air Act, Clean They assist cities in fostering pipelines, and expedite the construction of critical Water Act, Endangered Species Act, GHG developing standards for development, infrastructure projects in Los Angeles. emissions reduction standards, SB 375 fnancing, operations, and pre-screening and more. Despite these environmental projects. They can also be helpful in Modernize the permitting process laws and local planning requirements, lending objectivity to deciding which public and private projects throughout projects demonstrate real, long-term Cities and the county should expand zoning the state are commonly challenged under beneft, and scale P3s appropriately to the codes where certain facilities are permitted CEQA even when a project meets all other type of infrastructure to be implemented. by right and do not require a Conditional environmental standards of existing laws. Government-affliated organizations, such as Use Permit. For example, wireless facilities Partnerships British Columbia or the newly are currently permitted by right in M1, M2 Many lawsuits are brought or threatened for created Offce of Public Private Partnerships and M3 manufacturing zones and certain nonenvironmental reasons and often times in Washington, D.C., go one step further HOW COULD LOS ANGELES DO BETTER? 33
in facilitating P3s. Through their focus on infrastructure trusts, the L.A. Area Chamber to adopt tax increment fnancing techniques smaller geographies and fewer political recommends that local governments in without relying on redevelopment agencies. entities, they are able to determine locally the L.A. region do more to facilitate P3s, how the public and private sectors can whether through opening their own offce Fees and surcharges are other ways to share designing, building, operating and of public-private partnerships, linking source stable revenue streams for operating maintaining infrastructure projects. City- more closely to the WCX or setting up an and maintaining infrastructure. Pay-as-you- run infrastructure banks, like the Chicago Infrastructure Trust of its own. The existence go models ensure that those who beneft Infrastructure Trust (CIT), support these of more P3s in L.A. has obvious benefts: from infrastructure pay their fair share types of infrastructure initiatives with P3s will help transfer risks from local and that core government services are funding and fnancing. The CIT has budget governments to private companies, reduce not jeopardized by debt. Furthermore, if to fund projects directly, and can offer the need to impose new fees or taxes, and infrastructure providers can be more fexible the private sector tax-advantaged loans or provide more fexibility in terms of how in how they price future goods and services, issue bonds. It also has access to large- resources and/or infrastructure is managed. they can charge a fxed cost to access a scale investors who can structure deals system in order to ensure that all users of according to the desired outcomes of the P3s represent just one piece of the that system contribute to its maintenance, projects. In the future, the CIT will be used funding and fnancing puzzle, though, and then use dynamic pricing to ensure to back energy performance contracts like and initiatives related to value capture that users pay for what they actually Chicago’s streetlight retroftting program, in are becoming popular methods of funding consume. This marginal cost approach to which a company makes the initial capital infrastructure. L.A. is familiar with developer pricing will help ensure that L.A.’s existing investment in energy effciency technologies fees and increases in sales taxes as funding infrastructure is adequately funded and and then is paid back over time by the mechanisms. The recently announced maintained. resulting savings. Enhanced Infrastructure Financing District, which diverts some portion of the property Based on the obvious added value of taxes in areas under development in order to infrastructure exchanges, P3 offces and pay for infrastructure, is another way for L.A. 34 HOW COULD LOS ANGELES DO BETTER?
LEVERAGE TECHNOLOGY TO FIX SHORT-TERM ISSUES AND PREVENT LONG-TERM CHALLENGES
Technology can be used to bridge the and providing additional sources of revenue gap between what policymakers would do by adopting other technologies. Hydraulic with greenfeld developments versus what modeling uses algorithms and sensors to they are forced to confront as the physical predict which pipes should be repaired — legacies of their predecessors. Dense, and when. Other water modeling techniques mixed-use neighborhoods, with homes of can also ensure that storm water is properly varying values, commercial spaces of various managed during periods of intense rain types, and green spaces for recreation, all — or treated during droughts. Intelligent linked to multi-modal transport options, are traffc systems ease traffc fow, prioritizing the antidotes to many of the issues cities buses, providing green waves for bicycles, face today: long commutes, poor air quality, re-routing cars around accidents, facilitating unaffordable housing, lack of access to emergency vehicles’ paths and optimizing jobs. But most cities are not greenfelds, traffc signals during peak congestion and when policy makers are deciding how to periods. Smart meters for energy and water, shape their city landscapes, they often have combined with easy-to-read user interfaces, to confront the physical legacies of their can quickly incentivize customers to lower predecessors. This is especially true in L.A., consumption and help utilities identify where rapid, car-based growth has led to and quickly repair leaks or other problems. sprawl and car dependency. Alternative fueling infrastructure, distributed generating facilities and micro grids could The L.A. Area Chamber recommends that have real practical and educational benefts local governments use technology to bridge and prepare L.A. for the technology based the gap between the L.A. that policymakers infrastructure transformation happening in envision and the city they face right now. leading cities. The members of the L.A. Area This means leveraging technology to fx Chamber are open to discussing informally short-term issues and prevent long-term with the City and County, and in a nonbiased challenges. One example of how technology way, how they might choose technologies can be useful is L.A.’s recent retroftting of and prioritize investments. its streetlights, the largest lighting project in the nation. Another is developing alternative fueling infrastructure, such as the frst ever e-highway in the United States, which will improve air quality around L.A.’s ports by greening freight transport by trucks in Carson, CA. L.A. could build on these projects, improving air quality, cutting costs HOW COULD LOS ANGELES DO BETTER? 35 36 CONCLUSION
CONCLUSION
As was the case in the mid-1880s, L.A. issue, but those plans are fragmented by sector challenge. The L.A. Area Chamber fnds itself at yet another crossroads in sectors and jurisdictions and will require a and its members stand ready to help the its history — its existing infrastructure is signifcant transformation of L.A.’s regional City and region meet this challenge and not capable of meeting the region’s future infrastructure. build the next generation of infrastructure environmental and economic needs, and needed to remain economically competitive growing regions across the nation and As they did over a century ago, local in the 21st century. world are competing for talent and capital. policymakers and business leaders L.A. policymakers realize this challenge need to work hand-in-hand to develop and have put in motion several long-term complementary delivery plans and tools plans and policy goals to address this needed to address this long-term and multi- INFRASTRUCTURE PROJECT LIST 37
INFRASTRUCTURE PROJECT LIST
Below are examples of infrastructure investments that are critical to Los Angeles’s economy. Collectively, these projects total more than $40 billion in investment and would create or preserve a total of more than 130,000 jobs in the L.A. region and 1.3 million jobs throughout the state over the next decade.
SAN FERNANDO GROUNDWATER BASIN
Los Angeles imports more than 50 percent of its water supply. In the City of L.A., imported water can account for up to 90 percent of its total supply, as was the case in 2014 due to historic drought conditions. Unpredictable weather patterns, groundwater contamination, risk of natural disasters, aging conveyance and distribution systems, and deteriorating ecosystems are collectively threatening L.A.’s $1 trillion regional economy. Securing a long-term, reliable baseline supply of affordable water for L.A. is of paramount importance to the Chamber and its members.
Groundwater is one particular local resource in L.A. that has the potential to cost-effectively reduce the use of imported water. Historically, local groundwater has accounted for up to 30 percent of LADWP’s total water supply. However, over the past decade, local groundwater has accounted for 12 percent of the City’s total supply, primarily due to growing contamination in the San Fernando Groundwater Basin. LADWP estimates the total cost of the proposed cleanup between $600-900 million and anticipates that treatment facilities should be operational by 2021.
CALIFORNIA ECO RESTORE AND WATER FIX
The Chamber supports investments that reduce L.A.’s use of imported water. However, Angelenos have also made signifcant investments in the state’s water conveyance system over the past half century, anticipating that the region will continue to rely on imported water to meet its long-term needs. Given L.A.’s investment in the State’s water project, the Chamber supports California Eco Restore and Water Fix — a two pronged approach that will improve the reliability of our state’s water supply via the modernization of our state’s conveyance system and restoration of 30,000 acres of habitat in the Delta. The total projected cost of the statewide project is $15 billion, which equates to a $2-5 per household per month increase in costs for Angeleno households.
WESTSIDE PURPLE LINE EXTENSION
L.A. has become synonymous with traffc congestion and poor air quality, which inhibits economic growth. L.A. recognizes the value of reducing traffc congestion and is in the process of transforming its transportation infrastructure. For example, Metro’s Westside Purple Line Extension (WPLE) is a critically important light rail construction project that when completed will provide a high-capacity, high-speed, dependable alternative mode of transportation for commuters in one of the most densely populated and commercially signifcant areas of L.A. County. The entire WPLE is scheduled to be constructed in three phases with a total cost of $6.3 billion. It is expected to increase transit ridership on the entire Metro rail system by 49,000 passengers per day and create 52,500 jobs when completed in 2035.
LOS ANGELES INTERNATIONAL AIRPORT LANDSIDE ACCESS MODERNIZATION PROGRAM
LAX is the number one origin and destination airport in the world and third busiest in the United States. It serves more than 70 million passengers, generates more than $40 billion in regional economic activity, and directly and indirectly employs more than 290,000 people in the region annually. Being the busiest origin and destination airport in the world presents many challenges to passengers when trying to access the airport. Critical to LAX’s continued success is reducing traffc congestion in its Central Terminal Area and surrounding streets, improving the airport’s connectivity to transit and enhancing the overall passenger traveling experience. The Chamber supports LAX’s $4 billion Landside Access Modernization Program, which will transform LAX’s ground transportation and arrival and departure experience. 38 INFRASTRUCTURE PROJECT LIST
BNSF RAILWAY COMPANY’S SOUTHERN CALIFORNIA INTERNATIONAL GATEWAY
Since 1970, containerized shipping through U.S. West Coast ports has increased twentyfold, largely due to the enormous increase in the U.S. trade with Pacifc Rim nations. As a result, major West Coast ports, particularly the ports of L.A. and Long Beach, have needed to optimize and expand their facilities to accommodate those increases. Today, L.A.’s two ports handle 40 percent of the total containerized cargo that enters into the United States. While this growth has contributed signifcantly to L.A.’s economy, it has also contributed to traffc congestion and air quality concerns.
The Southern California International Gateway (SCIG) is a proposed $500 million near-dock intermodal rail facility that would eliminate more than 1.5 million truck trips from the 710 freeway to rail yards east of downtown L.A. by shortening the distance trucks loaded with cargo would need to travel before transferring the containers to rail. When completed, SCIG will be the most advanced and effcient intermodal facility in the United States. The project is expected to create approximately 1,500 construction jobs per year over three years of construction and 22,000 direct and indirect jobs in Southern California by 2036.
UNION PACIFIC RAILROAD’S INTERMODAL CONTAINER TRANSFER FACILITY
Union Pacifc Railroad’s (UP) Intermodal Container Transfer Facility is also a near-dock railyard located approximately fve miles from the Ports of Los Angeles and Long Beach. The facility is used as the relay point between the ports and major railyards near downtown L.A. for the transfer of intermodal containers. UP is in the process of modernizing its ICTF. The $400 million project would enable UP to roughly double capacity at the facility while reducing emissions.
PIPELINE SAFETY ENHANCEMENT PLAN
Southern California Gas Company’s Pipeline Safety Enhancement Plan is a multi-year effort to pressure test or replace key natural gas pipelines in SoCalGas’ territory. In addition to replacement and testing, the plan calls for retroftting existing valves so SoCalGas can respond to transmission pipeline incidents more quickly and in multiple locations simultaneously. This effort will generate an economic infusion of more than $2.4 billion in capital overall and generate more than $1.9 billion in economic activity based on direct, indirect and supporting services. State and local governments are expected to see a $9 million boost in tax benefts from PSEP activities in the SoCalGas service territory. 1,800 jobs will be directly created or retained in Southern California. SOURCES & ACKNOWLEDGEMENTS 39
SOURCES AND ACKNOWLEDGEMENTS
Data and information used comes from both publicly available data sources as well as internal knowledge from both the Los Angeles Area Chamber of Commerce and Siemens Cities Center of Competence. Publicly available information has been sourced from, but not limited to, the following entities and websites: Global Institutes: The Brookings Institute, The McKinsey Global Institute, and The World Economic Forum; Governmental website and agencies including: the Congressional Budget Offce and the cities of Los Angeles, New York and London; Newspapers: The Los Angeles Times, Forbes and The Guardian; Independent Websites such as the American Public Transport Association and Governing.com.
Special acknowledgement and thanks to: Frank Lopez Director of Public Policy Los Angeles Area Chamber of Commerce 40
Los Angeles Area Chamber of Commerce 350 S. Bixel St. Los Angeles, CA 90017 P: 213.580.7500 | F: 213.580.7511 lachamber.com