As the national economy’s growth slows and fails to meet expectations – with gross domestic product only growing 1.2% during the second quarter of this year (less than half of the projected 2.5%) and private fixed investment down 3.2% (the most in seven years), according to Bloomberg.com – Westside Long Beach business remains strong.
“If you drive through the Westside now, there are forklifts and trucks being loaded and unloaded, and there’s just a lot of activity on these streets, which are really small streets,” Stan Janocha, owner of Superior Electrical Advertising Inc., said. “You just see that there is more going on than what was a few years back.”
Westside Long Beach business Tell Steel stocks more than 17 million pounds of steel, aluminum and alloy products. The metal company serves clients in Los Angeles, Orange and Riverside counties. (Photograph by the Business Journal’s Larry Duncan)
For his business, Janocha said he has seen a tremendous increase over the last year and has been able to hire 10 new employees in that time. The company specializes in signage for retail and fast-food businesses, including McDonald’s, Starbucks, Denny’s and CVS, but also does work for Disney and Universal Studios and is currently working on a large job for Viacom, which Janocha says will be visible to anyone peering up at the Hollywood sign.
“We have a staff of about 130 right now, and about a third of those are Long Beach residents,” Janocha said. “We’re always proud that we look for the Long Beach residents before we look for anybody else.”
Ed Spotsky, owner of Spot Lighting Supplies, said his company is also up from last year. He explained that the brick-and-mortar sales are down around 5% but Internet sales are up about 20%. Spot Lighting recently added a new full-time employee, bringing its staff up to 16.
Spotsky attributes his company’s success to LED lighting, which is changing the lighting industry as a whole. He explained that after 35 years of doing business, recent industry changes have kept the job fun. For his business specifically, he said a key factor for success is its proximity to the freeway, saying he was glad he did not instead buy a property near Orange Avenue and Anaheim Street.
“People just love that we’re right off the freeway because we do have a lot of people coming here all day long,” Spotsky said. “We have four or five trucks here almost all day, and they just love that we are tucked right up against the freeway with such easy access in an industrial area and not trying to back into some little center or something like that.”
Aside from the proximity to freeways, the Westside is beneficial to businesses that import and export through the Port of Long Beach. Being minutes from the port means Westside businesses save on moving products to and from the piers.
One of the companies benefitting greatly from its proximity to the port is SnugTop, which designs and manufactures camper shells and commercial truck toppers. President and CEO Hartmut Schroeder explained that low gas prices directly correlate to increased sales for his business. SnugTop recently began the production of commercial truck toppers, which has increased business and the company’s use of the port for exporting its products.
“I believe that it is good for us to be in an industrial-zoned area,” Schroeder said. “There are no residential buildings here. We’re close to the port. We’re also an exporter, so for us the proximity to the port has always been a big plus. We load containers here at our facility, and hauling the containers from us to the port is less than a mile. It’s very convenient. The company has been here on the Westside for 57 years now, and I don’t see us moving anytime soon.”
The Long Beach Travel Center, a truck stop located on Pacific Coast Highway, services many of the trucks traveling to and from the port. The truck stop contains several semi-sized Shell gasoline pumping islands, a convenience store and a Carl’s Jr.
Owner Gil Ficke said his business is up between 5% and 8% from last year after a strong summer, but things are slowing down now. Ficke said some of the challenges his company has faced are mostly at the federal and state levels. Between the Affordable Care Act, paid time leave and forthcoming minimum wage increases, he said it’s hard to balance due to no new revenue sources being available. He also noted that the city’s proposed minimum wage timeline might have one benefit but is ultimately harmful to Long Beach businesses.
“[We are] competing for employees with neighboring cities. If we are paying a higher wage, we can attract employees from there,” Ficke said. “But we also are competing against those businesses that have a lower minimum wage, and there is no offset for that. We’re concerned when the city gets involved in federal and state level issues. It puts us on an uneven playing field.”
One business that has seen a slight decline is Santa Fe Importers, an Italian deli, which has been located at 1401 Santa Fe Ave. since 1947. Company President Vincent Passanisi said his business has dropped about 5%, but the slowdown is industry-wide and they have been less affected than others.
Aside from the deli, Santa Fe Importers operates Marisa Foods LLC, a division of the company that manufactures meatballs, sausage, tea, tamales and chili for sale in California grocery stores and for companies all over the country.
Like Ficke, Passanisi cited several local and state regulations making it harder for him to compete. He said higher wages, increasing sales tax and other regulations are forcing him to raise his prices to keep the business profitable. This raise in prices also leads to a decrease in sales as he competes with other companies around the country that are not dealing with similar regulations, he explained.
“I think the whole exercise of debating the minimum wage in Long Beach was just premature,” Passanisi said. “They knew that California was working on something, and they should have waited to see what the state was going to decide. And I even said so at one of the city council meetings. Instead they pushed this thing through. There are a lot of egos involved, and it was a waste of time.”
Despite these setbacks, Passanisi said the company enjoys operating in Long Beach more than its other locations in Irwindale and Seal Beach, noting that nothing compares to the area.
“The Westside is a unique area, and I still get very excited about it because there is just so much going on down here. I mean, you can find anything over here. What I love about it is if something breaks down, you can always find somebody who can help you fix it. It’s a really neat and kind of cool area. I think it’s a hidden secret of Long Beach.”