On the Road With the Red Team: Trying to Stop the Bleeding

The sky is blue and limitless on a Friday morning at 8:30 a.m. With the exception of the thick knots of traffic strangling commerce throughout the city, it’s difficult to imagine anyone wanting to do business anywhere other than Southern California.

But despite legitimate attempts at workers’ comp and business tax reform, most business people categorize California’s business climate as being as attractive as Rush Limbaugh, shirtless, doing the wave at a football game.

The hangover resulting from this negative environment has brought me to supervisor Mike Antonovich’s office, where I sit in a conference room with Alexander Rosas, director of economic development for the Economic Alliance of the San Fernando Valley; Patti Friedman, senior deputy for Los Angeles County Supervisor Michael Antonovich; Christopher Farlow, senior loan officer for the Valley Economic Development Center; E. Kenn Phillips, director of education and workforce investment for the Economic Alliance, Paul De La Cerda, the legislative and economic development deputy for Los Angeles City Councilman Greig Smith and Michael LeCocq, CEO of Canoga Park-based baseball, softball and basketball uniform manufacturer, Victory Custom Athletic Inc.

We’re not just here for the free muffins and coffee that Friedman has brought in. With the exception of LeCocq and me, the other people in the room are members of a “red team,” a group of civic officials and business advocates that attempt to keep jobs and businesses in the Valley. As LeCocq recites the litany of problems that his company faces trying to stay afloat in a crowded marketplace, the difficulties that this red team faces becomes readily apparent. Paramount on LeCocq’s list includes sky-high workers’ comp costs, extreme intransigence within the many layers of Los Angeles bureaucracy and the struggle to keep prices competitive when the competition manufactures its product either overseas or in more business-friendly states.

It hasn’t been easy for Victory to prosper, considering that its biggest competitors are Nike, Adidas and Rawlings. Yet the company has carved out a comfortable niche based on dependability, excellent customer service and offering direct sales, grossing $2.2 million in 2003. However, LeCocq points out that expenses rose in every budget category last year. The most glaring statistic is a leap from $29,000 in workers’ comp insurance costs to $44,000, the result of an employee who placed a fraudulent claim. Additionally, the costs of group health insurance, licensing fees and property taxes also spiked sharply, placing more strain on the small business.

In spite of it all, the 45-employee company has outgrown its cramped Canoga Park headquarters and is actively looking for more comfortable and capacious digs, only to find another road block: the dearth of affordable Southern California real estate. This confluence of discouraging factors has led LeCocq to toy with the idea of moving the business to Las Vegas, following the trail of numerous California businesses.



Yet the red team is quick to respond to LeCocq’s concerns, offering a treatment for each of the businessman’s fiscal ailments. Farlow, the VEDC’s point man on the project, quickly offers to set up a meeting to pore over the company’s books. LeCocq welcomes the suggestion, proudly declaring that he’s holding the company’s first budget in its 16-year existence.

Soon the issue of the Victory’s cramped facilities is discussed. Situated on 11,000 square feet scattered between two buildings in Canoga Park, LeCocq acknowledges the shortcomings of the current situation.

“We’re always looking to move. We’re crammed and we aren’t organized the right way. We’ve built to accommodate our needs. We currently pay $7,500 a month in rent and we have three people to every office. If I want to get some personal time to conduct business, I have to stay in the office until midnight,” LeCocq said. “Moving is a tremendous hassle but it seems necessary to do so in the coming months or years. You get to thinking, if we’re going to take the time and effort to move, it raises the possibility of just moving out of state to save costs.”

Seeking solutions

The red team bandies about solutions to the problem. The Sun Valley/Pacoima area is discussed as red team representatives tout its affordable rents and willing workforce. Rosas specifically mentions the enterprise zone in the northeast Valley that offers Department of Water