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Street vending supports big industry in LA, despite being illegal

One recent morning in South Los Angeles, street vendor Antonio Ramirez scrubbed his taco cart, a sponge in one hand, a hose in the other. A few feet away, his father-in-law Manuel Salas scraped soot off the grill with a metal brush.

“We’re washing down our cart so that it’s clean, so we can go sell," Ramirez said in Spanish. "So it’s clean, and it looks good.”  
The men weren't working in their garage or their driveway. They're in a licensed mobile-food commissary, where they store and service their cart. Ramirez heads there each morning after stopping in downtown to buy his meat and produce.

"I pay $350 a month to rent this space," he said, drying and polishing the metal trailer cart to a silvery sheen. "I prepare my food here, and they provide me with water, with light."

The commissary is one of dozens of licensed facilities in the county that service mobile food merchants, from large food trucks to tiny fruit carts. These are just part of the booming industry of street vending, which one recent report said is worth more than $500 million each year in Los Angeles.

One morning last week, the Kareem Carts commissary in South L.A. buzzed with activity. Street vendors hosed down carts, loaded them with food and ice, and hoisted them onto trucks to head out for the day.
All this in the heart of  Los Angeles, a city where street vending is technically illegal. City officials have been weighing a proposal since last year that would let street vendors take out city permits to sell their products legally on the sidewalk; it has yet to be voted on by the City Council.

But the fact that the city doesn't sanction street vending hasn’t stopped it from becoming big business. The nonprofit Economic Roundtable recently said the city's street vending industry generates $504 million annually. This includes not just the sales generated by vendors themselves, but by the many businesses that supply them.

“We’re looking at the forks, the spoons, the napkins, the plates, bags, materials, ice, produce," said Mike Dennis with the East Los Angeles Community Corporation, an organization that supports legal street vending. "All those things, they’ve got to go out and buy those things to make their operation viable for the day. And those are just the food vendors.”

There are an estimated 50,000 street vendors in the city. About 10,000 of them sell food. A good chunk of those have county health permits, and work out of county-licensed commissaries, a requisite for obtaining a permit. County officials estimate that roughly 5,000 mobile food vendors hold health permits, ranging from small carts to trucks.

Still, that leaves thousands of food vendors unregulated. If Los Angeles city officials legalize street vending, all food vendors would be held to the higher standards - which means they'd have to pass muster with the county, and have equipment that complies with state health regulations.

“It really is a big industry," said Angelo Bellomo, the environmental health director with the county health department. "Our challenge is seeing how we can take that industry from operating in the shadows to operating with compliant permits that meet the state requirements.”

Bellomo says legalization would most likely draw investors to the industry. There would be a demand for more commissary space, and for code-compliant food carts at competitive prices.  

"We are going to need a lot more permittable food facilities, that is, food carts, food trucks," Bellomo said. "I'm hoping we can attract innovation as well, to see of the food carts that are needed can be made much more creatively, at less cost."

This is, of course, if the city gives the thumbs-up to legal street vending. After a series of community input meetings in recent months, city officials are expected to take the issue up once more this fall.

There's a fair amount of opposition: The idea of a legal, burgeoning street vendor industry is no comfort to some brick-and-mortar merchants.

“We consider every small business that has opened a small miracle," said Carol Schatz, who directs the Central City Association of Los Angeles, a business advocacy group. "To have someone able to set up in front of that business, possibly selling the same merchandise or food that is sold within the brick and mortar business, is direct competition and unfair competition, because street vendors don’t pay rent.”

But even now, for those cart vendors who want to operate legitimately, there are costs involved.

One morning this week, Carlos Escobar waited in the front office of Kareem Carts, a food cart and truck manufacturer and commissary in South Los Angeles. Dozens of carts operate out of its commissary, from fruit, hot dog and taco carts to larger catering trucks.
Escobar was applying to rent space here. He said he's growing his business: He just bought his second fruit cart, and is applying for a county health permit. It will cost about $3500 dollars altogether. But Escobar said it was worth it.
“At least they can’t toss out merchandise when the police come," he said in Spanish. "They can’t throw away our things, or take anything away. That is how the county permit protects us.”
While a county health permit keeps his cart from being confiscated, LAPD can still write him tickets for illegally selling on city streets. Some cities in the region have limited legal street vending policies, but street vendors who sell on L.A. sidewalks are routinely cited. Tickets can run into the hundreds, an expense many vendors have come to see as part of the cost of doing business. 
County health permits run from a couple of hundred to a thousand dollars. County-approved carts are are another expense. Just an entry-level fruit cart that meets state health regulations can run about $1,500.

For the poorest vendors, the lack of capital puts some in a bind when they want to get started. Certain sectors of the street vending industry are also subject to worker exploitation. Mike Dennis said it's especially prevalent in the ice cream vendor, or paletero, industry.

"Folks will come into L.A. looking for work, they are low skilled, they don't have access to any of the traditional workforce opportunities that most folks would have, so they'll go work for a commissary that owns the carts, and who own the product," Dennis said. "And they basically give them the product on consignment. Whatever they sell, they get a small fraction of it."

Whatever product they lose - say, melted ice cream - they have to pay for, Dennis said. In the end, some of these vendors earn far below minimum wage each day.

Dennis hopes strict permitting rules at the city level will help root out unscrupulous practices. 

Back in South L.A., Escobar said operating under county regulations is good for other reasons.

"It's better because everything is cleaner, we comply with county rules," he said. "It's better for customers."

Hesham Sitita, the owner of Kareem Carts, walks vendors like Escobar through the county permitting process when they sign up to rent space there, or buy a new cart.

“Once we get it permitted, we give the customer his permit, he goes to pay the permit or take his trailer or take his cart or take his truck, and he starts to go to work," Sitita said.

He knows if the city legalizes street vending, it'll mean more business for manufacturers like him – and, he says, for everybody else involved in this industry, which could get even bigger.