LAEDC Economic Forecast Panel: Making the Best of Federal Funding in LA’s Infrastructure


LA Mayor Eric Garcetti's announcement yesterday of $9.5 million in federal funding for a collection of community-level projects in Los Angeles yesterday represents a small slice of federal spending heading to the region. At the February 16 LAEDC 2022 Economic Forecast, SCAG Executive Director Kome Ajise  moderated a breakout session on infrastructure with Metro CEO Stephanie Wiggins, LAWA CEO Justin Erbacci, Port of Long Beach Deputy Executive Director, Dr. Noel Hacegaba (pictured), and Wells Fargo Vice President & Economist Charles Dougherty. In this conversation excerpted by VX News,  note that success comes from federal and state support, coupling these one-time investments with workforce development, and collaboration across sectors.

Kome Ajise: Could you highlight a project that (Metro Is prioritizing) that will be impacted very substantially by the (federal) Infrastructure law; and what funding (you anticipate receiving)?

Stephanie Wiggins: There are a lot of projects, but the one that I know is a top priority for my board is really transforming Southeast LA. It’s known as the West Santa Ana Branch Light Rail Project, but it's more than a light rail project. The communities along this alignment have densities of employment and population five times higher than the LA County average. There are areas of persistent poverty. We have a little bit of goods movement along a portion of that alignment, so we actually are working with the Ports and Union Pacific along a portion of that corridor. Along that alignment, which is primarily manufacturing, it's going undergoing a quiet evolution and transforming into high technology types of jobs.

With a significant investment from the federal government from this infrastructure law, coupled with contributions from the state, we can really transform this area for the better. This is an underserved community. When we talk about climate, this is an area which has a poor air quality. We can transform that area to have cleaner air and reduced greenhouse gas emissions with investment from the federal government.

In the new law, the Capital Investment Grant Program doubles the amount that's available nationwide. That is the main grant discretionary program that we rely on for these mega projects. This is a $9 billion mega project. With local sales tax, we've identified about $3 billion. We really see this infrastructure program as a way to transform this community. The difference these types of transformative investments can make in stimulating local economy for the short and long run is huge.

Justin Erbacci: Obviously, (LAWA has) a lot of programs going on right now transforming the experience at LAX. The most impactful project that we have going on now has got to be our Landside Access Modernization Project, which involves the implementation of an automated people mover train that is going to go about two and a quarter miles from the central terminal area to the new consolidated rental car facility that we're developing. This project will really transform the way people access LAX and alleviate a lot of the congestion that we have today.

Of course, most importantly, it's going to finally connect the airport with Metro. People can then take public transportation all the way to the airport and use rail as the way into the other parts of the city.

Dr. Noel Hacegaba: If there was one (POLB) project that I would use to highlight, it's the Pier B On-Dock Rail Support Facility. It's a very complex project. What it does for us at the port, is it enables us to move more containers directly off the ship, onto the train, and into the hinterland, thereby avoiding truck traffic.

What's exciting about this project is that it will more than quadruple the number of rail tracks at the Port. That translates into about 7.3 million trucks that will be replaced and lessening the burden on our inland rail yard.

Our customers love it because it's more efficient and faster. Our communities love it because it will be cleaner and more sustainable. It will remove more trucks from the streets.

We're excited about the stars aligning both at the state and federal level because the $17 million in the infrastructure law and the $2.3 million ports package that's been proposed by the governor are two massive buckets that can help ports like us develop and build these projects. That, by the way, will also meet our workforce development needs because these infrastructure projects that have been enumerated here will generate tens of thousands of jobs.

Lastly, we recently received a $52.3 million grant from DOT at Pier B On-Dock Rail program that we believe validates how they're approaching this project, not just developing the infrastructure for congestion relief and sustainability, but also workforce development.

Audience member: How do you (at METRO) work with local workforce development boards to layer on top of the investments that are currently happening on hybrid training partnerships and onboarding to focus on specific target populations, like justice-involved and homeless individuals? … (and) a lot of these investments are happening in communities that are historically underrepresented. What are you doing in your projects to actually make sure that housing displacements aren't happening and that the communities aren't feeling the negative impacts of these infrastructure projects?

Stephanie Wiggins: A couple of things. On working with workforce development boards, we actually did that at Metro where we developed our workforce initiative Now LA program, which is really to encourage local hiring of our procurements outside of construction. We have our local hiring opportunities on our construction projects through our project labor agreements with our trades, and that's worked wonderfully. About five years ago, we worked with local workforce development boards to develop this new program that really looked at the rest of the portfolio of job opportunities, both with our contractors and consultants, where they are given bonus points on their evaluation as to their commitment to hire locally under our winnowing program and Integrated Metro.

We've been more intentional about that recently. Just last week, we just submitted an application at the federal level for our Room to Work program, where we are intentional in targeting unhoused individuals and partnering with homeless outreach providers, who also include wraparound services, where they contact those individuals on our system. They provide them housing, and we are guaranteeing a job for up to two years as a career pathway.

Housing is critically important. We have a joint development policy that focuses on affordable housing and minimizing displacement and gentrification. That has been met with some success.

I’m always questioned about this one-time funding, How can we be transformative? Given your questions, I want to uplift a partnership that we have going on with the county right now that we'd love LAEDC to be partners with us as well. That is developing a Transportation Technology Center of Excellence. What that means, at its most succinct point, is bringing rail manufacturing back to the US. Across the nation today, there are no rail cars that are manufactured in the United States. We know that in LA County alone, because of the voters, we are going to be ordering over 900 rail cars just in the next 10 years.

 We've identified a potential 20 acre site where we could, working with the private sector, develop this industrial park, so we could bring manufacturing here to LA and start growing a workforce that is trained in this technology. What we need is this one-time investment at the federal level. It's about $2 million. That's the type of transformation that can happen when we take into account workforce development, demands for the industry, and then working with our county and economic partners to develop a plan.

Kome Ajise: At Wells Fargo, Charlie, what do you see from the private sector perspective. We oftentimes think of private sector as just gains and losses, but you're more than that. There's a lot of social responsibility on the private sector side. How do you see that playing out with this conversation about diversity and inclusion?

Charles Dougherty: There's a bottom line aspect to everything we're talking about, but of course, corporations are more than just profits and losses and things like that. Corporations play a significant role in our community by providing jobs, providing financing, and providing economic opportunity. The time to be passive with a lot of these things is over. The aggressive targeting of some of the more impacted communities and directing more investment is just so important, not just from a social sort of thing, but in terms of the economy as well. It's not good enough anymore to have a certain segment of the population do well and other segments not doing well. You can have everybody doing well, so finding new and creative ways to sort of make that happen is just so important.

Kome Ajise: What's one takeaway you would want to leave these attendees with today about the opportunities that are ahead of us? What does this potential one time funding and the opportunity ahead of us look like from your perspective?

Dr. Noel Hacegaba (POLB): I would say that we're at the cusp of a new industrial revolution. We have a short time to get it right, and we can't afford not to get it right. What's going to be at the center of this is collaboration, making sure that all the entities represented here, plus the private sector, plan out our infrastructure investments, our strategic investments, that we're talking to each other, and that we have the bigger picture in mind.

I'll give you just one very brief example: zero emissions. There's a lot of collaboration that needs that we need to get there. We have to do it in a way that's the least disruptive and that doesn't break the bank. A way that trains and prepares a workforce to preview for the future. Collaboration is going to be key.

Justin Erbacci (LAWA): This focus on infrastructure and the money being poured into it, from the airport’s perspective, is really helping to make up for the many, many years of a lack of investment in airport infrastructure. US airports are suffering as a result of that because we're way behind the rest of the world. This is giving us an opportunity to really invest the money that we need. It's not nearly enough, honestly, but it's definitely a help. We look forward to getting even more to help. We desperately need investments in airports.

 We are taking advantage of this opportunity. The money is available to really make infrastructure investments at LAX and Van Nuys that are going to transform our airports and make them into the airports that Angelenos deserve for this great city.

Charles Dougherty (Wells Fargo): There's been relatively few things to get excited for the past two years, and I think the opportunity that the infrastructure law presents is legitimately extremely exciting. I'm very optimistic about the long-term economic impacts here. Remember, as was just mentioned, we haven't been spending a lot of money on infrastructure for the past two or three decades. In fact, if you look at spending on infrastructure as a percent of the overall economy or as a percentage of GDP, it's been flat to even declining. As we all know, infrastructure investment is vitally important in terms of connectivity, getting people to the jobs, and bridging different communities. I'm incredibly optimistic about where these various infrastructure projects will be headed, and the overall positive economic impact that they will have.

Stephanie Wiggins (METRO): My takeaway would be, if we want to really optimize this opportunity that we all collectively have before us, status quo will not work. If we want to realize the quality of life benefits and if we want to do the collaboration, we've got to change the way we communicate and coordinate and think about these projects.

In relation to the West Santa Ana Branch project, there’s broadband. We're going to work with SCAG and the County and look at our projects on both the highway and transit side to see: can we also incorporate broadband and help contribute to closing that digital divide?

Whether it's partnering with the city of Inglewood with the People Mover or LAWA over their connections to the airport, these projects are increasingly exorbitantly expensive. If we want to really be intentional with the money and exponentially have benefits, we need to make sure we don't follow those same steps.

“I would say that we're at the cusp of a new industrial revolution. We have a short time to get it right, and we can't afford not to get it right.” -Dr. Noel Hacegaba