The following is response to the article, “Beverly Hills’ Bad Medicine,” published on Tuesday, Aug. 17.

The article looks at only one side of the issue. Beverly Hills is a community of 35,000 residents with a day time population of up to 450,000 and with more vehicles passing through everyday then are on the 405 at LAX. 

The city has a lot of revenue to be sure and nothing here should be perceived as a complaint about lack of resources.  On the other hand it takes a lot of money to support the services to such a huge day time activities and special events ranging from traffic control to endless police services to the United Stats to assist with protection of visiting US politicians and foreign visiting dignitaries.

I am the former City Manager of Beverly Hills now retired after 40 years in local government having served a diverse range of communities. I am the person that started the discussion on this issue and have an obligation to defend the issue.  The issue  has nothing to do with an aversion to medical uses, it has everything to do with the long term economic health of Beverly Hills.

Some of the key issues in medical uses are:

  1. Medical uses generate very high traffic and parking demands.  Most medical buildings are older and do not meet these demands putting the burden on the streets, other businesses and the public parking.  In addition these buildings tend to charge very high parking rates pushing most of the patients into the parking intended for the retail and restaurants.  It also tends to frustrate other businesses that often do not want to locate near medical because of these problems and can reduce rents on other properties.  It causes sever problems in the residential neighborhoods adjacent to these medical buildings as patients and employees use the streets for cheaper parking.
  2. These patients do not generate as much spin off business as you suggest.  Most, but certainly not all, patients see their doctor when ill or having a medical procedure.  Following plastic surgery patients usually have bandages and black and blue marks.  These medical patients tend to not go shopping or eating because of the illness, procedure and appearance following the medical visit.   Patients with any extensive surgery are not allowed to stay in a hotels because hotels do not meet the State standards for medical recovery.  As a result medical uses create large impacts and little revenue to offset those impacts.
  3. Many of the employees at medical offices are often not the highest paid and even many doctors make less today then what people perceive.  These employees are not shopping at Louis Vuitton, eating a Spagos or staying in five star hotels.  The employees from much higher paying industries like entertainment do shop, eat and stay in hotels.
  4. Because of an old tax structure, medical uses in Beverly Hills, unlike the City of Los Angeles, pay very little in taxes either from business licenses or sales and hotel taxes as noted above.
  5. Medical uses typically can afford to pay more in rents, understandably property owners tend to prefer to rent to medical for the higher rents.  This pushes out other office uses and exhaust office space to allow other uses like talent agencies and other entertainment based businesses to expand and has forced a number out of Beverly Hills.  These entrainment based business do generate clients that shop and eat and stay in hotels and produce very large tax revenues. It is the entertainment business and the “rich and famous” nature of Beverly Hills that is the draw for tourism, events and movie productions.  Tourism, events, movies and clients are the major source of revenue for the city.
  6. Much of the medical demand is not for plastic surgeons, but, in fact, to support regular medical practices and the growing space demands for doctors associated with Cedars Sinai.  These are patients with normal and often serious medical problems, not cosmetic needs. They visit primarily to be treated and hopefully cured, not to recreate.
  7. The city is not opposed to medical uses and already has a disproportionate amount of medical space in regards to its population and small geographic area. With the growth at Cedars Sinai and the demand it creates for medical office space, over time the entire city inventory of office space could be consumed by medical demands.  The time to address this concern is now, not after it is a major problem.  I think you would agree that Beverly Hills reputation and thus its revenue sources are not built on being the medical support center for Cedar Sinai.  There is almost endless opportunity in the City of Los Angles for this medical space to locate.  I would also note West Hollywood is struggling with this same issue as a result of medical demands from Cedar Sinai.

Cities today, with sever limitations on their taxing authority, must look at land use from a perspective of establishing a sustainable economy with as much diversity in that economy as is feasible. 

History has shown it a mistake to put all your economic eggs in one basket.  There are endless examples of communities failing from such circumstances. It is not only about revenues for the cities, it is about jobs and quality of life for our citizens.  I think these concerns outweigh the profit motive of the real estate owners who in Beverly Hills can still rent their buildings for a handsome price. 

The relatively low vacancy rate in Beverly Hills even in this terrible economy demonstrates that fact.  

Roderick J. Wood, ICMA-CM
ICMA Legacy Leader
Past President Cal-ICMA
Past President League City Manager Department