An eBay for Municipal Government

Larry Kosmont, a Southern California businessman, hopes to present a practical solution to city agencies: Why not do deals online?

By Mairi Hennessy
December 06, 1999

After 13 years in politics, Larry Kosmont founded a real estate advisory firm in 1986 with one employee (himself), a small office (his Nissan) and a portable phone. Fast-forward 13 years: He has that polished look, smile and confidence you expect to find in a politician. He sinks into an oversize white couch in the indoor pool room of his West Los Angeles home, and, even after a day at the office (no longer located in his car) and sitting in standstill freeway traffic, he looks like he just stepped out of a Dentyne commercial.

Meet the latest Internet entrepreneur. Kosmont, a 48-year-old CEO with a penchant for Italian interior design, heads Kosmont & Associates, a $2 million firm with 20 employees, plush quarters in downtown L.A. and a San Diego satellite office. For his efforts in navigating government regulations and negotiating $6 billion in transactions between the public and private sector, he's been named Real Estate Service Professional of the Year by the Los Angeles Business Journal and heralded by the press as a bureaucracy-busting private consultant.

Naturally, Kosmont's latest project is, like everyone else's, a Net deal. ECitydeals.com, which is slated to launch in January, will be a cyberspace marketplace where the public and private sector can meet and buy things from one another. It's eBay (EBAY) meets GeoCities, since members of the site will be able to exchange goods and then maintain records of transactions, bid information and product stats online.

Kosmont came up with the concept early this year after deciding to publish his firm's two-volume, 500-page tax survey on the Web. He realized that he had a bevy of information that could be crunched in a variety of ways to provide data on the costs of doing business. So he decided to give those interested in the information another reason for staying at the site: Let them take the rate data on products and services – such as fire engines, business services and park benches – and do a deal on the spot.

It's going to be a tough sell. The Internet is not a wholly new concept to government; cities have Web pages and already transact some purchases over the Net. But for the most part, departments and agencies have been approached by the private sector individually and through offline means. Kosmont's site will give departments and agencies a clearinghouse for products and services.

Kosmont knows what he's after. When he was 26, he was one of the youngest city managers in California. "Actually, I was surprised I even got the interview," he laughs. "I was sitting in the waiting room and someone came out looking for me. They just didn't know it was me; they expected someone older." The city was Bell Gardens, southeast of Los Angeles, with a population of approximately 45,000. "I think one of the rant reports labeled it as one of the five poorest communities in California. It was a place that desperately needed economic development and desperately needed help. I think the city council saw me and said this is someone who is going to work a lot of hours and who is young and foolish enough to take this job."

Kosmont is now translating his 13 years in politics, 1974 to 1986, and his last 13 years in business, into a new career online.

"I felt that eCitydeals was really my calling. And that for some reason the whole purpose of my being an entrepreneur and being in business was more about eCitydeals than about being the president of a prestigious professional services firm," adds Kosmont. "My sense is that cities have an opportunity with the Internet. They can either take advantage of it, or be taken advantage of."

He wants 50 percent of the trillion-dollar marketplace to go through his site within the first two to three years of operation. Kosmont expects eCitydeals.com to turn a profit in its first year, through transaction fees (a 2 percent charge to sellers), half of which go to the cities. Membership costs from $2,000 to $3,000, depending on the size of the agency or department and its projected purchase sizes.

Things were starting to come together as Kosmont and his management team – COO Adrienne Greenheart, who implemented business-to-business Internet strategies for Hyundai, Toshiba and Ingram Micro (IM) , and VP of Marketing Michael Hastings, former mayor of Burbank, Calif. – prepared to unveil the site at the annual National League of Cities Conference in Los Angeles trade show Dec. 2 and Dec. 3.

Kosmont is hopeful that the site will make a difference. "If I can get it up and running to the level that I think I can nationally, maybe even internationally, it will forever change the way the public and private sector interact." Words from a politician.

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