Bobby Turner says Council needs to “get their shit together,” prompting rebuttal from Mayor Garcetti

From left: Bobby Turner and Mayor Eric Garcetti speaking at LABC summit (Barry Levine)
From left: Bobby Turner and Mayor Eric Garcetti speaking at LABC summit (Barry Levine)

Bobby Turner, CEO of Santa Monica-based Turner Impact Capital, has leveraged private funds to build social-impact developments, charter schools and workforce housing in places like Dallas and Las Vegas. But in his own backyard, he said he has been limited by the city’s outdated zoning code, competing agendas and a lack of incentives.

Speaking at the L.A. Business Council’s Mayoral Housing, Transportation and Jobs Summit last Friday, the former CEO and co-founder of Canyon Capital Realty Advisors took direct aim at the city’s onerous planning process and the officials who haven’t changed it — inciting a later rebuttal from Mayor Eric Garcetti.

While cities like Miami have instituted an expedited conditional-use permit process for social-impact projects, similar developments take years to build in Los Angeles, Turner said. He said the lack of a comprehensive general plan is the main culprit.

“A great start would be for our esteemed 15-member council to get their shit together and pass a clear, thoughtful plan that encourages and supports new development and/or preservation of community-serving infrastructure,” he said, adding that the city’s politicians are often beholden to unions, campaign donors and “outspoken NIMBYisms.”

Mayor Garcetti, the summit’s afternoon keynote speaker, took issue with Turner’s view of the L.A.’s planning process.

“Despite whatever my good friend Bobby Turner says, we’ve been doing things within City Hall to make things where business does want to and can come to succeed,” Garcetti said.

In recent years, L.A. has instituted a parallel permitting process and has put development functions under one roof by way of plan centers, he said.

“We’re kind of like the LensCrafters of development,” Garcetti said of the plan centers.

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He pointed to Greenland USA’s $1 billion Metropolis project as proof that the process works. In 2014, the Chinese developer broke ground on the 38-story first phase of the 3.5-million-square-foot development three months after approaching the city — and only two weeks after it purchased the site from IDS Real Estate Group.

In Turner’s speech, he also called on the city to do more to incentivize for-profit developers to build and maintain affordable and workforce housing. Developers shy away from such projects because of the high cost of building in Los Angeles, he said. Additionally, landlords are only required to keep units affordable for the 15-year compliance period, he said, after which point the homes can be priced at market rates.

Turner took shots at the Mayor’s goal of building an additional 15,000 affordable housing units in L.A. by 2021, saying it doesn’t go far enough. He also said it doesn’t take care of those who make too much to qualify for affordable housing, but still struggle to make market rent.

“Now as commendable as 15,000 units might sound, it doesn’t do very much for the 1.25 million renters in L.A. who are rent burdened,” he said, referring to renters who spend more than one-third of their income on housing costs. “15,000 units doesn’t do shit.”

A self-proclaimed “evolved capitalist and recovering philanthropist,” Turner, through Turner Capital, has invested $500 million to build 69 schools in the U.S. over the past four years. However, he’s only been able to bring one to L.A., he said. While other regions have an expedited process for such project, L.A. subjects charter schools to a zoning process that can take up to 12 months, he said.

Turner highlighted a private-sector model for workforce housing that his company has been able to employ in South Dallas. It purchased a 300-unit development near one of its K-5 charter schools, he said. Rather than raising rents, the company worked to reduce vacancies and costs by subsidizing housing for teachers, police officers and health workers in exchange for services at the development. The police officers, for example, patrol the premises. It’s had the effect of keeping residents in the building longer and reducing crime, therefore reducing insurance costs far beyond what would have been earned from non-subsidized rent, Turner claims.

“I can be as profitable as the opportunistic investor without increasing rents on the very consumer whose backbone we rely upon,” Turner said.