What Makes Sriracha Stink

As this small and smelly San Gabriel Valley controversy has grown into a global drama covered by outlets from Toledo to Taipei, the conversation has focused, naturally, if misleadingly, on the Sriracha. 

On one side is David Tran, the immigrant founder and CEO of Sriracha’s maker, Huy Fong Foods, who claims the rooster sauce (made of chili peppers, distilled vinegar, garlic, sugar, and salt) is being scapegoated and worries (along with Sriracha’s many fans) that court action will threaten the company and its precious sauce supplies. On the other side are Irwindale city officials, who sought the judge’s order and claim the Huy Fong plant is producing odors that burn throats and cause coughing fits, gagging, and even nosebleeds. 

But the stench of Sriracha has obscured a far more toxic California problem that should be part of this story: Our state has far too many local governments for its own good. 

Irwindale, one of California’s more than 6,000 local governments, is not so much a city as it is a playland for 700-some businesses with operations there (including Ready Pac Foods, MillerCoors Brewery, and Charter Communications). The city has nearly 30 times more workers (40,000) than actual residents (1,400), and residential neighborhoods take up less than one percent of its 9.5 square miles. 

And Irwindale is not alone in having such odd proportions. Vernon, a city of 112 people and 1,800 businesses, is so relentlessly corrupt that Assembly Speaker John Perez championed legislation to disincorporate it two years ago. Vernon fought off the municipal death penalty by buying off opponents, including a promise of $60 million in donations to its neighbors. 

Small, not-quite-cities like Irwindale are often the sites of disputes between small local factions over the city’s spoils of prosperity—jobs, development incentives, city contracts, special services. 

Occasionally, outside authorities—a county district attorney or an air quality regulator—intercede to stop the worst abuses, but they invariably retreat without resolving the larger structural problem. California has little in the way of government at the regional level, and its state government is distant and out of touch. So no one can rein in the Irwindales. 

Instead, California local governments of all sizes, left to their own devices, compete to exploit loopholes in the state’s dysfunctional tax and budget systems. Those with the fewest scruples tend to turn those loopholes into incentives to bring in businesses and provide lavish salaries and perks to public employees and, in the cases of some small cities, the residents themselves. (Most famously, Irwindale subsidizes the filling of drug prescriptions for its residents). 

Irwindale is thus a perverse California success story. As the city’s official history tells it, Irwindale was incorporated in 1957 as a way for the people who owned the land—which was rich in the crushed rock, gravel, and sand needed to build roads and highways—to avoid local taxes. Since then, the city has received notice primarily for the $10 million it gave to the National Football League’s Raiders to try to lure the team away from Los Angeles (the effort failed), and for regular waves of local corruption. Right now, as it happens, two city councilmen, a former city councilman, and the retired finance director face charges of embezzlement, misappropriation of funds, and conflict of interest. 

The city also could lose its liability insurance because of the high number of misconduct complaints lodged against Irwindale’s small police force. 

And then there’s the smelly deal that brought Sriracha to Irwindale. Three years ago, the city used redevelopment dollars (essentially, growth in property taxes that would otherwise go to schools) to offer Hoy Fung Foods a sweetheart loan as part of a deal to build a new $40 million plant on Azusa Canyon Road. 

In a recent open letter criticizing the city over the smell controversy, CEO and founder Tran wrote that the loan terms were so generous as to be “irresistible”—but that he grew so nervous about his dealings with Irwindale’s government that he paid off the loan early with bank financing on less generous terms. Everyone in this dispute has a different deal with the Devil. 

By the way, I can’t help mentioning an especially rich irony: Two years ago, when city leaders across California were trying to prevent the state from shutting down local redevelopment agencies, they cited Irwindale’s Hoy Fung Foods deal as just the sort of development they wished to preserve. 

Today, the community redevelopment agencies are gone, but Irwindale, sadly, is not. But how to shut it—and other cities—down? The best idea for consolidating cities was suggested in 1996 by the now-forgotten California Constitution Revision Commission, which recommended giving citizens in each California region the power to rethink local governments and produce new regional charters. 

One day last month, I stopped by the Hoy Fung plant and walked around the neighborhood. There was clearly an odor—it reminded me of the garlic you smell while driving through Gilroy in Northern California—and those who complain say it gets much worse during chili-crushing time. But it wasn’t nearly as strong as the scent of coffee when I drove by the Starbucks three blocks away, or of the truck exhaust that seems to be everywhere in this part of the San Gabriel Valley. 

Irwindale may be able to rid itself of the stench of Sriracha, but that won’t change the fact that local governance, here and across California, stinks.

(Joe Mathews is Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It [UC Press, 2010]. This column was posted first at ZocaloPublicSquare.org … connecting people and ideas.)

-cw

CityWatch

Vol 11 Issue 98

Pub: Dec 6, 2013