Businesses' Best Friend: DWP has $20 million to give away. Want some?

By Jim Lorick

The Los Angeles Department of Water and Power, the nation's largest municipal utility, was created with a single mission in mind - to facilitate the continuing economic growth of the City it serves. While yesterday's manifestation of that mission was investment in systems to deliver clean water and reliable power to the region, today the DWP has expanded its mission to include investment in the businesses that will fuel the growth of the City in the twenty-first century.

DWP's Economic Development Group was established in 2001 to create and implement programs designed to attract new business to Los Angeles and encourage the expansion and retention of existing small to medium-sized businesses. DWP's commitment to growth is significant. The Economic Development Group's fiscal 2002-2003 business incentive package includes twenty million dollars in grants, loans and service discounts.

Although owned and controlled by the City of Los Angeles, the DWP is nonetheless a business. The Department's economic development program is making real investments and seeing real returns. According to DWP's John Chen, Assistant Director of the Economic Development Organization, the DWP understands that existing and potential customers have a choice. "Right now some of the most important growth in the region is coming in the form of small to medium-sized businesses. These businesses are our customers. They in turn support the creation and survival of other business that are also our customers. All of these businesses employ people who are also our customers. To retain and serve all of our customers, we need to keep LA's business climate friendly and competitive."

A key service category established by the Economic Development Group is business expansion and retention. Services administered through this category facilitate the construction of utility facilities and infrastructure improvements to promote sustainable design and expansion of city assets with a goal of stimulating economic growth in the city. As a recent example of those efforts, the Economic Development Group signed an energy services agreement with the LA Zoo. The agreement will involve the Department in the implementation of a variety of new utility projects that will be incorporated in the zoo's five-year $107 million make-over. The DWP agreement includes assistance with sustainable design, solar energy generation, telecommunications services, energy and water conservation and outdoor area lighting.

As part of the commitment to creating a competitive climate, businesses relocating to one of the City's Enterprise/Empowerment Zones are eligible for an economic development subsidy on the base electric rate. Customer rates are reduced for up to 60 months of continuous service following approval of Enterprise/Empowerment Zone eligibility. The program provides electrical rate discounts up to 35 percent. Given that the DWP's standard rates are often 20-40 percent less than those of Southern California Edison, locating or relocating to a business to an eligible zone could be an important factor in making a business venture viable.

Understanding that financial incentives alone will not ensure the success of an enterprise, the Department coordinates with the Mayor's LA Business Team, and other regional institutions, to provide education and expertise to new and existing businesses. Publications, workshops and events cover such critical topics as permit fast-tracking, workforce training, tax credits, environmental support, customer retention, plant expansion and relocation.

The centerpiece of the Department's economic development plan is the Utility Infrastructure Loan Program. The goal of the program is to provide local businesses with access to capital investment for growth when short-term financing is unavailable. In addition to being the most high profile part of the Department's development efforts, the loan program has yielded the sort of success stories that energize the business community.

A loan of $133,000 to the Union Ice Company enabled them to relocate power lines that interfered with the critical expansion needed to remain in the region. A loan of $300,000 to the LA Salad company allowed them to purchase and install the energy-efficient refrigeration system and water reclamation system that will allow the company to continue its steady growth. With $300,000 in financing from the Department, Cal-mart LLC was able to retrofit its showrooms with new energy conserving lighting. A Utility Infrastructure Loan to The Wilshire Colonnade, a modern, 385,000 square-foot office complex in the heart of the city managed by Insignia ESG, funded the retrofit of more than 6,000 light fixtures throughout the twin 11-story towers. The retrofit project was completed in February 2003, and Insignia ESG anticipates that it will realize electrical cost savings averaging more than $7,000 a month. Installing energy-saving lighting at the Colonnade made clear economic sense. "We're a bottom-line focused organization, and the decision to select a Utility Infrastructure Loan from the LADWP Economic Development Group was simple," said Jennifer Choy, of Insignia ESG. "The loan required no out of pocket expenses for our company, so it enabled us to make the upgrades affordably," added Choy "The Wilshire Colonnade is a great example of a facility that is improving its value and reducing its costs through services from LADWP and state-of-the-art lighting technology," said Bernadette Singleton Kirkwood, LADWP director of the Economic Development Group.

The Department is also interested in making a difference to enterprises of a much smaller scale than the Wilshire Colonnade or Cal-mart. As part of its continuing investment in the revitalization of the Downtown Historic core, the Department made an infrastructure loan to Pete's Café, at the corner of Fourth and Main, to retrofit the space with energy-efficient water and power equipment.

To support new business growth in the Watts area, the Department has entered into a strategy partnership with the Community Redevelopment Agency to create the Watts Wide Area Network (Watts WAN). The project provides for the construction of a high-speed broadband network that will serve selected corridors in the greater Watts business community. The state-of-the-art service available through the Watts WAN will enable existing area businesses to remain competitive and provide the region with an additional incentive for businesses looking to relocate.

The surprising array of programs and services available through the Department make it an essential business resource. As Bernadette Singleton Kirkwood, director of the Departments Economic Development Group recently remarked, "Smart companies are taking advantage of every possible opportunity to improve operations, and the LADWP is working diligently to provide incentives and services to help businesses in Los Angeles succeed."

For more information regarding opportunities available through the DWP's Economic Development Program, contact Ms. Singleton Kirkwood's staff at 800-864-4409.

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