Inner City Firms Can Make It : A Look at 3 Entrepreneurs Who Serve Urban Clients

For more than three decades, business has staged a mass exodus from the mean streets of America’s inner cities--driven by fear of crime, high operating costs and lack of skilled labor.

But with many suburban and downtown retail markets nearly saturated--and with wages and real estate costs becoming increasingly attractive in depressed urban areas--some experts believe that basic economics favor a return to the inner city. Hopes are especially high in the Los Angeles area, where the Long Beach rapid rail transit line and the Century Freeway could help fuel new business development in South Los Angeles.

But for now, business in South Los Angeles is mostly small entrepreneurs who try to fill a variety of consumer needs that are unmet because of the flight of major retailers. The following is a look at three entrepreneurs, operating in South Los Angeles’ most depressed neighborhoods, who must cope with crime, tight credit, community politics, language barriers and the neighborhoods’ fast-changing demographics.

With no major supermarket within five miles, James J. Oh believed that his huge La Fiesta Food Warehouse in Watts would be welcomed last summer when it opened on a site vacated years ago by a Ralphs supermarket and a Thrifty drugstore.

But the United Food and Commercial Workers and some community leaders protested the 50,000-square-foot store near Avalon and 103rd Street, contending that it paid below-union-scale wages and was seeking a license to sell packaged beer, wine and alcohol in a community with too many liquor stores.

“A supermarket in the area is very much needed; however, another outlet for alcoholic beverage sales in our area that is already over-saturated, is not,” Rep. Maxine Waters (D-Los Angeles) wrote the Los Angeles Planning Commission.

The commission denied Oh a license to sell alcoholic beverages, dealing a financial blow to the $16-million La Fiesta--the largest financial investment in Watts in two decades. Nonetheless, Oh said, he is committed to staying in the area.

“My philosophy about business is never think about money,” said Oh, who was born in China, grew up in Korea and has operated several grocery stores in Southern California since immigrating here in 1963. “The key is to get involved with the community, and conflicts will not happen.”

Since last summer’s liquor license dispute, Oh has steered clear of other political land mines and focused on improving service and selection at his supermarket, which sports 20 checkout aisles as well as an on-site bakery where bread and tortillas are made fresh daily.

By staffing his store mostly with local workers and keeping his door open to community residents, Oh said he’s won strong community support for La Fiesta at a time when some stores run by Korean-Americans in predominantly black areas of South Los Angeles have been plagued with violent confrontations.

Law enforcement authorities and many community residents credit the supermarket with helping stabilize a drug- and gang-infested block that once seemed out of control.

“This isn’t like those little dinky places that charge an arm and a leg; this is a one-stop store that’s clean and fresh,” said Jessie Samuel, a frequent La Fiesta shopper and president of the 102nd Street block club. “You are not afraid to come in here and shop.”

Added Lt. Dennis Shirey, head of the Los Angeles Police Department’s anti-gang unit in the South Bureau: “This building that was previously and repeatedly scarred with graffiti . . . has not had any. The parking lot that used to be a hangout for winos and various other derelicts is fenced and clear.”

Mr. Jim is gone. But Mr. Jim’s Barbecue--”You need no teeth to eat Mr. Jim’s beef”--perseveres in some of the toughest neighborhoods in South Los Angeles.

Fighting recalcitrant lenders and changing public taste, the eatery has expanded to four locations since its founding by the late James Harding in 1954.

His daughter, Dorothy Wade, now runs the business. “Most black businesses, when the owner leaves, suffer,” Wade said. “I didn’t know a lot about this business at first. I just tried to live up to what I thought my father wanted.”

Wade said she has been able to survive by being patient and by cultivating loyal customers who pay as much as $10 for a meal of meat slathered with her father’s original recipe sauce and trimmings.

The 1990 Gault Millau dining guide, “The Best of Los Angeles,” gave the restaurant high marks for its pork spareribs, baked beans and potato salad. Noting the death of Harding in 1989, the guide said: “So far, the quality hasn’t wavered at the various branches.”

Wade said her major frustration has been access to credit. “You have to really be strong financially to get money these days. . . . I probably could not start this business today if I was beginning from scratch.”

Wade said she’s been monitoring the trend of a consumer preference for less red meat and the tastes of South Los Angeles’ fast-growing Latino population. The restaurant attracts a generally older black clientele, but South-Central is increasing younger and Latino. There may come a day, Wade said, when she’ll need capital to test modified menus and make other changes in the restaurants.

“People have become more food-conscious,” said Sandra Marshall, a vice president of Mr. Jim’s. “They eat a lot more chicken or turkey . . . and they worry about cholesterol.”

With several bunches of flowers in hand, Claudia Lopez bounded out of her husband’s 1980 white Pontiac one recent Saturday, muttering about how the old car almost didn’t make it back to their flower stand on Florence and Vermont.

The sputtering Oldsmobile is the Lopez family’s lifeline to downtown florist shops that supply their struggling business. They buy flowers at the wholesale markets, then resell them at a markup on the busy South-Central street corner. But when the car doesn’t run, the family doesn’t make money.

“This car is impossible,” Claudia Lopez said as she and co-worker Joi Moren, 21, arrived at the flower stand. But “better late than never.”

The Lopezes have been battling such odds for two years--since Martin Lopez, 25, saw a “for lease” sign on the corner and figured that he could make money selling flowers at a location that once sported a far bigger Conroy’s flower shop.

Conroy’s pulled out in 1986. “It just wasn’t a good location for us,” spokeswoman Anne Fabry-Gomm said.

Lopez, whose tiny stand faces competition from at least four other florists within two blocks, has also found business daunting. Most of his customers speak English rather than Spanish, and Lopez has been the target of more than four robberies since he opened.

“There are gangs,” conceded the former carpenter, who opened the flower stand after hurting his back on a job. “But I think the people like us here. In order to sell flowers, it’s not necessary to speak English or Italian or Spanish--you can communicate with your hands.”

Despite the language obstacles, Lopez said he chose Florence and Vermont over a more Latino area because he believed that the busy street corner would produce a lot of potential customers. If he underpriced the competition, he theorized, customers would buy from him.

It is difficult to tell if the strategy is paying off. Lopez doesn’t post most of his prices, and customers say they patronize the store as much for its convenient location and hours than its prices.

What’s more, positioning himself as a low-priced shop has eaten into Lopez’s profit. He said his sales barely cover his $1,105 monthly rent, and added that he sometimes thinks about quitting. “But I believe business will be better,” he said.