Do you guys remember one of my articles about the campaign promises of the final two candidates for the mayor of Los Angeles Eric Garcetti and Wendy Gruel? Both candidates were against the city business taxes and said they would abolish it. A very surprising promise by any democrat, right? But they promised…

Just to refresh your memories, Los Angeles demands a “gross receipt” based sales tax if your business is located in Los Angeles. This tax has nothing to do with earnings or losses of your company, it is based on the gross receipt of your yearly income. A totally absurd idea — just ask any business man who has ever paid taxes after a losing year in business, like almost anybody in the construction industry for the last 4-5 years.

Fast forward. Eric Garcetti is the winner of the runoff with Wendy Gruel. A few weeks ago I was invited to a dinner with Garcetti, and another two hundred or so people. He was very nice, talkative, a very mayoral figure. When I found myself shaking hands with him, I just had to ask him about this promise. It caught him by surprise; he wasn’t prepared for a question like that. The only answer he had was, that is a very difficult situation and he has no real answer how to replenish the city’s lost revenue if they abolish this tax. He quickly turned to another person to shake hands with.

Just another campaign promise up in smoke.

Re-posted from our newsletter originally sent on 2/15/2014


I believe Shakespeare once said (and, no, I wasn’t there at the time), “There is only one thing constant in life and that is change.” True. Particularly when talking about the city of Santa Monica.

I’ve been doing business in Santa Monica for 39 years, but never experienced anything like what the city is currently undertaking. I think Santa Monica is becoming the most European style city in Southern California. Small service oriented businesses like shoe stores, hardware stores, repair shops, old diners and alike are squeezed out of the area, giving room to trendy coffee shops, bistros and expensive stores. In recent years, Santa Monica has become home to a thriving tech sector known as the Silicon Beach. All these techies have a different life style. They are mobile, not ready to settle down and have a family. They want to live in an apartment or condominium, spend their free time at the beach, sip wine in a trendy restaurant, or take a walk on the busy 3rd street promenade, watching street performers showing off their skills. Once unimaginable mixed use buildings, so common in European cities, are popping up all over. Small apartment buildings are giving way to huge buildings, sometimes over a hundred units apiece. This trend is just going to continue, and quite likely intensify, with the proposed Expo Line expected to open in 2016. The Expo Line will be the only light rail mass transportation in the Los Angeles area reaching the beaches.

Who is to blame — or praise — for all these changes?

The unprecedented number of projects has surfaced since a major change of the city’s land use plan a few years ago. The city is also in the middle of many zoning changes along the future Expo Line.

Can you imagine on a nice summer day, all the people who want to spend the day at the beach and don’t have to worry about parking anymore? There are several million like them living in the greater Los Angeles area – who will flock to Santa Monica on the Expo Line. I think it’ll be a zoo. It will definitely be a blessing for the local businesses and therefore for the city coffers, but I think it’ll be a curse for the people, especially the older folks living in Santa Monica.

What do you think? Is it really a blessing or a curse? Or both?

Re-posted from our newsletter originally sent on 2/15/2014


An engineer was crossing a road one day when a frog called out to him and said, “If you kiss me, I’ll turn into a beautiful princess.” He bent over, picked up the frog and put it in his pocket. The frog spoke up again and said, “If you kiss me, I’ll turn back into a beautiful princess and stay with you for one week.” The engineer took the frog out of his pocket, smiled at it and returned it to the pocket. The frog then cried out, “If you kiss me and turn me back into a princess, I’ll stay with you for one week and do anything you want.” Again, the engineer took the frog out, smiled at it and put it back into his pocket.

Finally, the frog asked, “What is the matter? I’ve told you I’m a beautiful princess and that I’ll stay with you for one week and do anything you want. Why won’t you kiss me?” The engineer said, “Look, I’m an engineer. I don’t have time for a girlfriend, but a talking frog – now that’s cool.”

Re-posted from our newsletter originally sent on 10/16/2013


Who would have thought that our bite-size structural news e-blasts have such a powerful impact? I’m sure you remember the story I wrote about my “pet project” — how dangerous the soft story buildings are in Los Angeles and that the city of San Francisco has enacted an ordinance to upgrade about 2,000 such buildings. I had discussions with many of my readers, who responded to my article, agreeing with me about the necessity of similar action by our own city council. One of the architects, Mr. Doug Breidenbach, AIA, with whom I’ve been doing business for a few decades, has an inside track to city councilman Mr. Karo Torossian and his office. Recently he spent considerable time meeting and discussing the necessity of similar actions with Mr. Torossian.

Here comes the break-thru. Another Los Angeles city council man, Mr. Tom LaBonge, who is also concerned with the situation, has just requested, by a motion, that the city council consider instructing the Department of Building and Safety of Los Angeles to provide an inventory of thousands of these so-called soft-story buildings. An inventory is the necessary first step of identifying and cataloging these buildings to see what impact these would have on the safety of the citizens of Los Angeles, particularly the people living in them. Just a reminder, during the 1994 earthquake 16 people died just in the Northridge Meadows apartment alone. That’s only one building! And it was all due to this soft story style building.

One thing that must be considered is the economic hardship on landlords to retrofit these buildings, and how these costs can be mitigated by ways of tax incentives, federal grants or having the costs of this construction be passed onto the tenants living in those buildings.

Very interesting development, our office will follow up and report on this topic as it develops.

Re-posted from our newsletter on 10/16/2013