Explaining Southern California's economy

In SoCal business news: No DTLA Trader Joe's for now, Tribune Publishing Co.'s dividend

Trader Joe's Open New Store In Miami Area

Joe Raedle/Getty Images

Shoppers lineup as they wait for the grand opening of a Trader Joe's on October 18, 2013 in Pinecrest, Florida. Trader Joe's told the LA Weekly that a store in Downtown L.A. is not in its two-year plan.

Welcome to The Breakdown, KPCC's business blog! On weekdays, I'll compile a list of interesting business stories that impact Southern California.

Media

Since the Los Angeles Times' corporate parent, Tribune Co., announced it would spin off its newspapers into a separate business, there's been a lot of concern about the impact this would have on the iconic Southern California newspaper. Rep. Henry Waxman (D-CA) is among those who raised questions about the plan. His major concerns: Tribune newspapers, including the L.A. Times would need to pay Tribune rent on the building the staffs already use. The newspapers would also pay Tribune a dividend through debt financing.

At the time of the announcement, Tribune did not indicate how much the dividend would be. The Chicago Tribune (which is a Tribune newspaper) ventures the dividend would be worth $325 million, based on a document the paper obtained. The Chicago Tribune says the spin-off is expected to happen mid-year.

Trade and transportation

Earlier this month, work on the widening of the Panama Canal was stopped due to a dispute over cost. Now, the Wall Street Journal says work will resume. The widening of the canal is expected to increase the competition from East Coast ports that want to take some of the trade business from the West Coast.

The Ports of Los Angeles and Long Beach have been preparing for the increased competition, making significant upgrades to their operations and facilities. Port of Long Beach spokesman Art Wong told me this week: "Whether the competition comes from the Panama Canal or Mexico or Canada, we're trying to upgrade regardless of where the competition comes." 

In other port news, January cargo numbers were down at the Port of Long Beach, in part due to Asian factories closing operations during the celebration of Lunar New Year, according to the Long Beach Press-Telegram. There were 528,884 container units in January, down 1.4 percent from a year ago, the Press-Telegram reported.

Entertainment

Yesterday state legislators introduced a bill that would expand California's film and TV tax credit program. The bill would let big-budget films and TV shows--regardless of where they air, including Netflix--apply for the credits.

But will this stop productions from moving out of state and to different countries? California offers $100 million a year in its tax credit program to film and TV production. New York offers roughly four times that amount.

Assemblyman Mike Gatto (D-L.A.), who co-introduced the bill, told me he would like to increase the annual amount, but he didn't say by how much. Read more of his comments here.

KPCC's Larry Mantle will be moderating a discussion next Thursday evening on what the state must do to remain competitive and keep entertainment production here. The event will be live-streamed on SCPR.org

Retail

American Apparel is looking to restructure its company, according to the Wall Street Journal. The company has struggled over the years. In 2010, the late Mark Lacter told KPCC that American Apparel is "one messed up company." 

I've been fascinated by efforts to raise money for projects online. My colleague Mike Roe wrote about how the Veronica Mars movie raised $5.7 million in its Kickstarter campaign. He also wrote about how other businesses sometimes fail to raise money on Kickstarter.  Only 44 percent of all Kickstarter campaigns are successful, Roe wrote.

But that hasn't stopped L.A. barbecue stand Bigmista's from trying to raise money online. The business is launching an online fundraising campaign on GoFundMe to raise $20,000 to open a brick and mortar restaurant, according to Los Angeles Magazine.

I hate to burst your two-buck chuck (or perhaps the lingo is $2.49-buck chuck now?), but unfortunately, there are no plans for a Trader Joe's in Downtown L.A. for now, according to the LA Weekly. Despite the rumors, Trader Joe's told the LA Weekly that Downtown L.A. is not in the two-year plan.

Got business news? Tweet me @thewendylee.

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