Some of the most prominent members of the financially troubled Sunset Strip Business Association are asking the City of West Hollywood to make substantial changes in the organization.
In a letter to City Manager Paul Arevalo, Lee Maen, a partner in the Innovation Dining Group, said he and owners and managers of other businesses on the Strip are concerned about the annual losses of its Sunset Strip Music Festival (SSMF). The festival, which lost more than $1 million last year, has left the SSBA about $1.3 million in debt. The SSBA is funded by mandatory fees levied on businesses along the Strip and profits generated by its events.
The “SSMF not only does not benefit many of us, it actually hurts most of us financially,” Maen said. “Over that weekend, the people it draws to the event do not come to the neighboring businesses and the traffic and street closures keep the locals away.” The music festival began in 2008 as a celebration of Sunset Boulevard’s role in rock music history. Its financial problems led the West Hollywood City Council to consider putting last year’s festival on hiatus.
Maen said the annual Farmers Market has a similarly negative impact.
Maen also said SSBA members are concerned that some of the association’s board members do not pay the fees levied on its member businesses. “There is a lack of transparency and lip service as to the use of our funds and its benefits to all of us,” he said in his letter.
“We ask you to not extend the SSBA without substantial changes and to open up a dialogue for us to discuss a new direction,” Maen said.
Maen’s Innovation Dining Group owns restaurants such as Katana and BOA Steakhouse on Sunset Boulevard. His letter was signed by the owners or managers of other prominent Sunset Strip businesses including the Andaz, Grafton, Mondrian and Sunset Marquis hotels; bars and nightclubs such as Bootsy Bellows, the Den, the Pearl, Rock and Reilly’s and the Viper Room, and restaurants such as Pink Taco and Rivabella.
Maen said he and his co-signers did see a benefit in sidewalk cleaning and public security programs paid for by SSBA. But, he noted, the $290,000 in revenue that the SSBA receives annually from banner ads paid for by Jack Daniels on city street light poles would pay for those services without additional fees on the businesses.
Faced with criticism over their management of the music festival, SSBA and its executive director, Todd Steadman, last year engaged the Nederlander Organization to manage the annual event. It drew criticism from neighbors for noise and from others for its poor attendance.
At its meeting tonight the City Council approved the SSBA’s advisory report and agreed to hold a public hearing on June 1 on its plans for events in the upcoming fiscal year. If businesses that pay 50 percent or more of the fees levied on the Strip object to the SSBA’s plan for next year, the city will not approve it. Maen said signers of the letter to the city manager are responsible for about 38 percent of the fees levied and that he is confident other businesses not yet contacted will agree with them.
At its June 1 meeting the City Council also will include the SSBA’s request that the city subsidize the organization next year with a grant of $140,000, which would equal 22 percent of its management budget.
Where is the West Hollywood Chamber of Commerce on this issue? Missing in action? It would seem to me that if the majority of the assessment district oppose the Music Festival and the event is not even close to paying for itself, the obvious thing to do would be to cancel it. Until there is management which inspires the confidence of the paying members, the City should be wary of throwing good money after bad.