WeHo Considers Writing Off $1 Million in Unpaid Business Assessments

The West Hollywood City Council will be asked on Monday to approve the write-off of $1 million in unpaid assessments and related penalties to businesses in the Sunset Strip and West Hollywood Design District business improvement districts between 2002 and 2014.

Ninety percent of the unpaid debt is attributed to businesses in the Sunset Strip Business Improvement District, whose management was removed by the City of West Hollywood last year after major financial losses by the BID and its associated Sunset Strip Music Festival. The city collects assessments levied on local businesses that form business improvement districts and then distributes that money to the BIDS, which use them for marketing, security and other services.

debt-pig-drowningIn a memo to the Council, David Wilson, the city’s finance director, said 67% of the assessments were to companies that no longer are in business. Two years ago the city referred $1.4 million in unpaid assessments and penalties to Caine & Weiner, a collection agency, which had managed to collect $283,000 as of June 30. Wilson said some companies are on payment plans and the city is pursuing legal action in cases that involve very large debt.

The top 10 debtors are now-closed bars and restaurants on the Sunset Strip. Miyagi’s, a Japanese-inspired club/restaurant that once was very popular, owes the largest single assessment debt — $126,750. It closed in 2008 and was replaced by Pink Taco. The next largest debt is owed by another Sunset Boulevard venture — the Key Club. One of its corporate entities owes $104,800. Another owes $40,300. Others on the top 10 list (some of which have may been taken over by new owners) are: The Cat Club ($66,475), Viper Room / Black Square Pants ($45,950), Sunset Beach, ($44,600), Key Club ($40,300), Miyagis / Crystal Enterprises ($38,625), Clafoutis ($33,431), Barfly ($30,750), Normans ($30,125) and Pink Taco ($24,688).

Various parking and valet services were responsible for $100,615 in uncollected debts, with entities associated with L.A. Parking Services owing $62,078 of that.

The City Council will consider the write off at its meeting at 6:30 p.m. Monday at the City Council Chambers, 625 N. San Vicente Blvd., south of Santa Monica.

  1. It appears we did distribute the funds we never collected to the BID boards. Now they’re gone. I believe this trifle of the missing million dollars is on the consent calendar. Can’t blame city management from trying to keep this low profile after those hefty raises to themselves.

  2. I never understand why previously ‘free’ parking lots suddenly have some person sitting at the entrance and taking your money while doing nothing other than pointing to the obviously empty parking spaces and saying ‘park there’. Well DUH! Now the ones that take your keys and hold them hostage, they really drive me nuts. I say, just cancel any and all contracts with these folks that have municipal contracts, and make the others cease and desist until they pay what’s owed.

    As for the commercial businesses – spending time – which usually means money – going after the ones that are really closed seems like a colossal waste. Now, I always thought, silly me, that when one person buys ‘a business – name, location and all, that included in the ‘all’ is the debt. So, since that is still a money taking (and maybe money making) business, we have a civic responsibility to collect the money owed. I realize that Weho is so flush with cash that we can afford to just throw some to the wind at times, but remember that what may seem like a rounding error to some is an annual budget for others.

    Collecting debt is distasteful at best, and requires less than desirable work – but with the good must come the bad at times. How about hiring some ‘part time’ employees? I speak from personal experience when I say that that visibly disabled people do better than average at collecting debts face to face. I speak from the experience of a guy I went to college with who’s ‘FAMILY’ was featured in a 60 Minutes episode on the RICO Laws when I say that big tough strong thugs bearing crow bars and the like do pretty well too. I will leave it to the city council and staff to make that decision.

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