Full Ballot Could Work Against Business Interests

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Local businesses face the prospect of being overwhelmed this fall by the sheer number of major ballot measures that would impact operation.

That is forcing them to pick and choose very carefully which ones they decide to plow resources into.

“With this many ballot measures warranting attention, business owners and business groups are going to be stretched very thin on their campaign resources, thinner than they have been in years or even decades,” said Gary Toebben, chief executive of the Los Angeles Area Chamber of Commerce in downtown Los Angeles.

Already, six measures have qualified for the November ballot, including a referendum on the statewide plastic bag ban, a measure requiring all public projects exceeding $2 billion to be put before voters, a $9 billion school facilities bond and a measure requiring condom use in pornographic films.

Backers of another measure to raise the minimum wage to $15 an hour by 2020 have submitted signatures; that measure is expected to qualify in the next few weeks. (See Page 1.)

There are dozens more measures collecting signatures, including several that business interests are eyeing closely. Among those: a measure raising taxes on properties valued at more than $3 million, an oil extraction tax, a measure boosting the sales tax on a pack of cigarettes by $2, a measure extending the sales and top-level income tax under Proposition 30 and a measure lowering the cost of certain prescription drugs.

Topping all this off are two likely local ballot measures: a countywide initiative to add another half-cent to the sales tax to raise billions of dollars for transportation projects and a measure limiting major development projects in the city of Los Angeles.

The chamber’s Toebben said if the property tax measure qualifies as expected, it will require a ton of business money in opposition. It would increase taxes on properties assessed at more than $3 million by up to 0.8 percent of the property’s value, nearly doubling the tax bill for many property owners.

“That $3 million threshold would impact virtually every commercial property owner across large swaths of Los Angeles,” Toebben said. “The impact on the local economy and on jobs would be devastating.”

New Finance Director

Starting this week, the city of Los Angeles will have a new finance director: Claire Bartels. She is replacing Antoinette Christovale, who stepped down last month after 16 years in the position.

Bartels will assume the post after her expected confirmation by the City Council at Tuesday’s meeting.

The city’s Office of Finance administers and collects taxes owed the city, primarily the gross receipts business tax, but also other levies, such as those paid by parking lot operators. On the gross receipts tax, the office also determines which tax category – or categories – a business falls into.

Over the years, the office has come under some criticism from business owners who disagreed with business tax classification determinations and who have had trouble navigating the city’s complex system.

Bartels, who has spent 30 years working at City Hall, told the Business Journal last week she wants to make it easier for small-business owners to navigate that tax system.

“I look forward to making the small-business exemption process easier,” she said. “Small and midsize businesses are the lifeblood of Los Angeles and we owe it to those who do business in and with our city to make registration and renewal as easy as possible.”

Commercial Loans

The city of Los Angeles is looking at setting up a loan program for major commercial projects. The loan money would come from the federal Housing and Urban Development Department under its Section 108 loan program.

Over the years, the city has, on a case-by-case basis, made 30 of these major project loans available for a total of $235 million. Among the most notable was a $30 million loan several years ago to CIM Group for the reconfiguring of the Kodak (now Dolby) Theatre at the Hollywood & Highland Center – yes, the same theater that hosts the Oscars – to accommodate Cirque du Soleil’s special Hollywood-themed show. Cirque’s show closed after a little over a year and CIM has had to repay the loan to the city.

Now, the city has proposed formalizing such major project loans into a separate program with set guidelines. To be eligible, a project must either add square footage or rehabilitate an existing commercial project. The city is also requiring that projects either generate increased property tax revenue or have a majority of jobs filled from city “worksource” centers. The loan amounts would range from $500,000 to $30 million.

The City Council is set to consider the loan program in coming weeks.

Staff reporter Howard Fine can be reached at [email protected] or (323) 549-5225, ext. 227.

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Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.