Los Angeles is Killing Business … One Improvement District at a Time

CITY HALL-The City of Los Angeles has come up with a new way to inflict taxes upon the already struggling Leimert Park business area. Although prohibited by law from imposing additional taxes in this area, the City has come up with a new approach. The city has created a “Business Improvement District” for the Leimert Park area. Within this district the city can assess additional taxes by calling them assessments. Supposedly the property owners of the district vote on the assessments. 

Although such assessments are supposed to be voted on by the members of the district the majority of property owners did not cast ballots for the additional assessment, according to City records.  Many property owners in the area have told me that they did not even receive ballots to vote on this proposed tax.  The largest single voter in support of the new assessments was the City of Los Angeles, by virtue of controlling 20 separate parcels in the new Business Improvement District. 

The fact that this area is suffering because of the new Metro train being run down Crenshaw Boulevard seems to be irrelevant to the City. Many businesses are being shut down or are close to it. The burden of Crenshaw Blvd, the heart of the district, being constantly closed has caused many businesses to lose up to 75% of their revenues. Instead of trying to help these businesses the City of Los Angeles has determined to throw the drowning man a lead weight to make sure that they drown. For many, businesses parking is unavailable for the customers. The continuous shutdown of the major street in the area has caused numerous businesses to close or move. 

Many small businesses are being hit with thousands of dollars of additional taxes at a time when they are on the very brink of survival. This action is little more than a thinly veiled attempt to force small property owners to sell their property at distressed values. If your property cannot generate revenue because of the Metro train construction, your business will not be able to succeed. 

When we made inquiries regarding how the money was to be spent the situation became even more bizarre. The assessments (taxes) are to be given to a nonprofit organization by the name of Community Build Inc..  Community Build, is also a property owner within the district and of course voted yes for the additional taxes. It turns out the Community Build is a nonprofit run by politically well-connected individuals that receive additional funding from the city of Los Angeles from actual tax dollars. 

Community Build, according to the City of Los Angeles, is supposed to provide such services as sidewalk sweeping and graffiti removal. It was my understanding that this was the job of the City of Los Angeles already. Why should small minority communities be forced to pay for basic services that are provided to the rest the city at no additional cost? 

The effected community has seen no benefit from this imposition of additional taxes. The streets and sidewalks remain dirty and graffiti remains on the walls. Who is monitoring the use of this money? It appears that no one is. A review of the tax return filed by Community Build Inc. indicates that the president of that nonprofit receives a salary of almost $150,000 per year. That's a nice salary for an unknown nonprofit organization that has done nothing to improve Leimert Park. 

The major press and news organizations have ignored this direct assault against minority businesses. I was only able to find out about this issue when a client of mine came to me and asked me to explain how he paid his property taxes and had a tax assessment still pending. If a government forces you to pay money, for owning property, it is a tax. While they still do not want to call it a tax it certainly resembles a tax. It comes on a government letterhead and is paid to the City of Los Angeles.  After the City takes the money it is paid to this third party that is not explaining how the money is being spent. 

While minority businesses do not expect the City or any other government to try to benefit the community, it is ashamed that the City of Los Angeles has chosen to penalize minority businesses in order to fatten the wallets of their political friends through a nonprofit organization. It turns out that the Business Improvement District is little more than a business-killing proposition for those who have to pay the tax.

 

(Clinton Galloway  is the author of the fascinating book “Anatomy of a Hustle: Cable Comes to South Central LA”.    This is another installment in an ongoing CityWatch series on power, influence and corruption in government … Corruption Watch. Galloway is a CityWatch contributor and can be  reached here. Mr. Galloway’s views are his own.) 

 -cw

 

 

 

CityWatch

Vol 13 Issue 4

Pub: Jan 13, 2015