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# Takes money to make money
- URL: https://www.smdp.com/takes-money-to-make-money/
- Published: 2007-07-04T15:00:00.000Z
- Updated: 2026-10-24T02:13:17.000Z
- Author: Kevin Herrera
- Tags: Business, Santa Monica, #archive-import

*Santa Monica is the priciest in county to do business*

CITYWIDE Santa Monica is a leader once again, but don’t expect anyone to start cheering.

For the first time in 13 years, Santa Monica has earned the unwanted distinction of being the most expensive city in the county in which to do business, surpassing Los Angeles, the former reigning king of cost.

The city by the sea had been a perennial runner-up for the costliest title, but when Los Angeles officials made recent moves to become more business friendly and lowered business taxes, Santa Monica jumped to the top spot, according to the annual Kosmont-Rose Institute’s “Cost of Doing Business Survey,” released this week.

It’s the first time in the survey’s 13-year history that L.A. did not top the charts.

“Santa Monica has always been an expensive city to do business in. That’s not new,” said Larry Kosmont, president and founder of the Kosmont Companies, an L.A.- based economic development firm. “Santa Monica just happened to sneak by L.A. this year.”

The survey compares more than 400 cities in California, and across the nation, on the basis of government-imposed costs on business. The major factors are business tax rats, utility taxes, sales tax, property taxes and state corporate income taxes. The survey does not take into account market variables such as the cost of land, lease rates or prevailing wage rates.

Companies looking to relocate use the survey to compare cities, as do economic development officials looking to get a little more bang for their buck, Kosmont said.

While this new distinction could be seen as damaging, those in City Hall and in the business community said they were optimistic about the future, citing present economic conditions which are attracting high-profile firms like Google, Yahoo! and MTV. Santa Monica is also home to many post-production companies and a strong health care community that provides quality jobs.

“When businesses make a decision about where they will locate, the cost of doing business may be one consideration, but not the only consideration,” said Carol Swindell, City Hall’s finance director. “They are looking at where they will be profitable, what the quality of life is; there are a number of factors that go into that decision, and we believe Santa Monica remains a very attractive place to do business because of the vibrant neighborhoods and top notch services.”

Santa Monica has tried to become more business friendly. In May 2005, the City Council voted to exempt small businesses from having to pay a business license tax, Swindell said.

Jim Lynch, president of the Santa Monica Chamber of Commerce, said the survey isn’t cause for alarm, however, he does think it will hurt Santa Monica when it comes to firms outside of the region who may not be familiar with the city’s good schools, educated workforce and many amenities. Lynch believes City Hall should look at the survey as a reminder that taxes need to be reviewed on a regular basis to make sure the city remains competitive and that the money is being spent wisely.

“When a tax is imposed on you, you want to make sure that the money generated is going to serve the community in the best way possible, and I think Santa Monica has done that as effectively and judiciously as possible,” Lynch said. “We have to continue to stay on top of this and make sure we aren’t losing businesses, even though Santa Monica happens to be one of the most desirable places to be.

“We need to make sure we keep it that way.”

The survey is something the council and city staff should look at, said Mayor Pro Tem Herb Katz, “but I don’t think we’ll be changing our tax structure anytime soon, and I don’t see why we should at the moment.

“I don’t see how we can resolve this,” Katz asked. “It’s private enterprise. How do you control private enterprise?”

*Originally published in the Santa Monica Daily Press print edition on July 4, 2007.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/070407.pdf?ref=smdp.com)