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ERIC PREVEN’S NOTEBOOK - Los Angeles Municipal Code section 21. 7 establishes the Transient Occupancy Tax (TOT), a 14 % tax on the rent charged to transient guests in hotels, motels, and short-term rentals. The mayor has wide discretion as to how that money is spent.
Item 6 on Monday's Special Budget Finance meeting noted that in Fiscal Year 2022-2023, the TOT is projected to raise $263 million to pay for vital city services, and in recent years the TOT has represented as much as 5% of General Fund revenue. Los Angeles Municipal Code section 21.7.2 contains a provision that could allow an unscrupulous hotel operator to engage in tax avoidance and interfere with the City's ability to collect the TOT by finding or creating a "secondary operator" that agrees to collect the tax on behalf of the hotel operator.
Unscrupulous hotel operator? Hmmmm.
TOT reformers, Paul Krekorian and Curren D. Price, lofted an item from the recusal bench —- If the "secondary operator" does not have any assets and fails to collect the tax, the City has no reasonable way to enforce its transient occupancy tax obligations. I THEREFORE MOVE that the City Attorney prepare and present an ordinance to amend Los Angeles Municipal Code section 21.7.2, subsection (f), so as to delete the following language: The principal operator may satisfy any potential liability it may have for taxes owed by a secondary operator by entering into a legally binding agreement with that secondary operator to remit the portion of the tax owed by the secondary operator directly to the City. Upon request, the principal operator shall provide the Director of Finance with copies of any such agreements.
Nice, but remember…
November 7, 2022: In Studio City, Paul Krekorian was running a clever play, but there was evidence that he was taking calls from the head coach, Eric Garcetti. We’d found an email with Garcetti, personally inquiring with Planning about the status. He must have been getting pressure from Richard Weintraub, the developer.
So, the play went like this. Weintraub had been refusing to pay his transit occupancy and parking occupancy taxes. Eventually, PJ Shemtoob of the City Attorney’s office filed a lawsuit to collect a ton of money that Weintraub, who owned the hotel at that point had collected from guests, but never paid to the city in taxes.
When Shemtoob and the City finally sued Weintraub, it came out that, Weintraub had been sued previously by his wife. This meant that his wife had a judgment lien on Weintraub, so the city’s effort to collect would be in second position. Krekorian understood what he had to do. In the interest of the taxpayers, we’ll have to settle and cut Weintraub a fantastic deal on all the transit occupancy money he owed. Wow, we all thought. Got ‘em.
Not hardly. ,
Now, the Residences at Sportsmen’s proposal is a continuation of the hijacking of Studio City interests by inside/outside opportunistas!
Your time has expired:
Herb Wesson had just told his seminal story about putting together a gang to protect the kids who were getting beaten up on the way to school in Ohio. Then he got emotional and angry, firing off that people had done him wrong by saying he’s”a “back door, wheeler-dealer. That I’m… powerful, evil, an ogre… That ain’t me,” he cried, “You don’t know me, I was raised to be a good man. A good son. I am am a good man. Everything my family has earned…is because they bad mamma jammas, in they own right.”
Paul Krekorian, said, “We were able to do that work… balancing, leading on the environment, inclusiveness..” — (record scratch)
Mr. Preven, please sit down.
“Inclusive?”
Paul Krekorian continued, reminding me how Wesson said in the beginning, “This is about all of us…”
It was similar to the point Monica Rodriguez of CD7 made about the passing Sergeant Michael Johnson. Johnson, as he was known to the public, had an illustrious career shushing members of the public at city council and frogmarching constituents in and out of facilities. “He would never miss an opportunity to advocate… for everyone else.”
Translation: Against you!
RIP
After the requisite Tiffany Haddish appearance — no council members got a chance to praise Wesson, raising questions as to whether indictments might be forthcoming.
Krekorian did what he does best, he made a weird allusion to Wesson’s sudden disappearance during meetings and dropped that he could often be found outside on the south steps of City Hall… “taking in nature.” Wink wink.
“A parting gift (of public funds) in the form of naming those steps… "people will now know they are on the Herb J. Wesson steps.”
The Hall of Administration:
Smart Speaker: Thank you. I love small businesses as much as anybody. But I think we have to be cautious about having a variety of rules. This is an important piece of business that was neglected for ten years. So it is important to regulate this kind of thing. I was very pleased to hear the people call in. I didn't realize LA County is the worst in the state. That is embarrassing. And 50 days for a permit to do solar is just -- it is beyond the pale because this is what we want. We want people to get off the bad stuff and get on the good stuff. The green stuff. So I don't know. I just caution against these kinds of poorly rolled-out programs. It is not the new Chief’'s fault, although I am sure he’s been there forever. Anyway, keep up the good work.
Speaker: Thank you. I am a little bit lonely out here in the public. But I do appreciate the item here. The Walnut Park Mutual Water Company. Now, it is important to understand that these folks have been doing this for a while. But still serving water that is extremely hard. There is a lot of hard water in America. It could be tainted and can suffer -- well, as I said, a high degradation of water hardness. So it is unfortunate, and this is the same kind of group that when I was chasing around the private equity operators with the gals from the New York Times — We need to do a better job of regulating our water and making sure the folks we do issue franchises to are doing the best they can, not just try to make as much as they can. And it is an endless struggle. So I ask you to issue this with a great deal of caution. Thank you.
Sup. Janice Hahn, chair: We will now move on to item six. For members on the telephone, it might just be, Eric. Please press 19 one and then zero now to comment on this item. Executive officer, please read the short title. 22 executive officer: item six is an ordinance amending utilities 23 division 4 to increase the minimum construction and demolition recycling rate for projects in the unincorporated county!
Smart Speaker: Yeah, I know, we are trying to work on updating the county construction re-use ordinance. So I understand that. The one thing that caught my attention as I scanned it was … any portion of a forfeited deposit will be used for illegal dumping prevention campaigns. Ding ding ding ding ding.
i just want to make sure that illegal dumping prevention campaigns are not targeted attacks on Angelenos who live outside. We have to color things very carefully so that we are not doing harm. It is the old #do no harm. Over at the City of Los Angeles, they got rid of scofflaw enforcement, now they are bringing it back — if you get five tickets they will try to nail you with a smart boot. We have an escalator ordinance, out in Malibu, and now that is so cruel. It goes from $100 -- by the 2nd day, $200, and then $500, so in three days, you’ve run up an $800 dollar charge against someone who parked on the side of the road, so we have to try not to do that kind of thing as we move forward with these issues.
Sup. Janice Hahn, chair: Thank you.
Sup. Janice Hahn, chair: you know, Eric did bring up an interesting point on illegal dumping and Mark since you are here, you may want to speak to how this will better address unlawful dumping.
Mark Pestrella, public works: Thank you, you are correct. I saw the board members nodding. The trash in general is the number one complaint we receive, and illegal dumping is a component of that. Illegal dumping is -- must have if it is originating from construction sites to avoid the tipping fees at landfills. In fact, the cost to bring construction materials to a landfill has increased. So it incentivizes people to dump this material illegally. The vast majority of this is ending up in our rural areas, north county, you can see a tremendous amount of this, because there are easy places to hide the material. Just as much is happening in that area, we are seeing evidence of it throughout. It puts stricter controls on the recycling of the materials that increase the amount that is being separated for recycled purposes and gone to the right -- often to the right place, but it also increases our ability to enforce that those materials are dumped properly. So we are tracking it. We have a better tracking system, to identify where the materials are coming from -- when they leave the site that they are identified and to track them to their final destination. Which should be a proper dump site landfill. Or a recycling plant and then as Mr. Preven mentioned, there are provisions in there for us to take a part of this fee increase, and apply it to enforcement of county laws that are on the books already. To improve our ability to enforce, and bring to justice people who are actually doing what is essentially environmental injustice. Creating environmental justice issues for the county. So we are happy to bring this. Because of the compliance with our own counties environmental goals. Happy to recommend that the board approve this today.
Sup. Janice Hahn, chair: thank you. Do any other supervisors want to comment on this? Just scream it out.
Smart Speaker: I'll just give a little comment on the closed session and a general public comment, thank you. So, what a great story in the previous item, the public came down, and raised some serious concerns for a long period of time. That was not the first hearing, as we all know, and the supervisors kind of listened and like, wow, this is really becoming a problem. Now AT&Ts presentation was tight. The man said his company was trying to be the good guys here, but the people spoke up louder and made their resolve in opposition clear. I think supervisor Barger initially, said she would go against and then there was a bit of confusion about how to vote against the tower, but once it was clear, supervisor Horvath delivered a stunning little speech saying that the federal government falls short. And then supervisor Solis jumped in, having heard from Amy Bodek the Regional planning director (Bruckner replacement) that large towers had gone up in east la. All five supervisors stood locked arms and refused to deny the appeal for the 5G tower.
So, nice work.
Then….
Bereft Speaker: Hello, everyone. My name is Cheyenne Sims. I'm calling in for a general comment. I'm calling on behalf of my best friend April Valentine who expected to be admitted into the hospital on January 9, 2023. She was expected to give birth but instead, she died because of the neglect of the nurses on staff.
The doctor did not show up until nearly 24 hours after the delivery time and her hospital is known by Inglewood residents to be one of the worst hospitals in the county causing many black and brown maternal and infant deaths.
We're requesting that the supervisors join us in bringing justice for April by writing a letter to Senator Bradford and Assembly Member Tina McKinnor to conduct an investigation into her death and the Los Angeles department of public health.
Sup. Holly J. Mitchell said she was on it, and that a black woman regardless of income or class still experiences a disproportionately higher rate of death. “We believe it's because of racism” She said this was another opportunity for the state, and county to step forward…
Early Negotiation Agreement:
I have a virtually Pavlovian response to the term, Exclusive Negotiation Agreement (ENA) and I blame the LA County Metro Board, the Board of Supervisors, and Mark Ridley-Thomas. Suffice it to say, that Watt Companies got in there with Edgar Khalatian and Richard Bruckner, and the team over at Mayer Brown made things happen, and the Public Integrity Division took a pass.
But this one, the City Attorney, with the assistance of EWDD, to prepare a Disposition and Development Agreement, Grant Deed, Covenant Agreement, Sale Ordinance, and any additional documents necessary to effectuate the City’s sale of the Marlton Square Parcels to Buyer, at values to be negotiated. Lovely.
Buyer’s leadership team of 24 high-paid execs is 62% white guys, 16% other guys, inc. Chris Pearson*, 20% women, with only 1 Asian woman.
Chris Pearson, for those who don’t remember, served as Managing Director for Economic Development Policy and Senior Advisor for LA Mayor Antonio Villaraigosa… where he had direct oversight of the city’s Dept. of Planning and Bldg Safety and facilitated entitlements for over five million square feet of development. Cha-ching.
Is anything else on the desk? Announcements?
Announcements, Nicolas Zevallos, Coro Fellow. Yale and London School of Econ— map and gap analysis… So smart.
International relationships:
Last month, Beyoncé proved more polarizing than usual when she headlined the grand opening of a luxury hotel in Dubai, performing for an invite-only collection of guests, including influencers and journalists.
While some fans decried the optics of taking a major payday in a place that criminalizes homosexuality — “Beyoncé’s Dubai performance isn’t just an affront to LGBTQ+ fans, but workers’ rights in the UAE,” The Guardian declared.
But that didn’t stop the Board of Supervisors following, Nary a Word, an article where I raised the plaintive question, where were the board as the Mayor and Paul Krekorian wading into international waters?
They responded in force, and on the Supplemental agenda issued a strong recommendation as submitted by Supervisors Barger and Horvath to send a five-signature letter to President Joseph R. Biden, Jr. and Congressman Adam Schiff, with copies to the Armenian Congressional Caucus, calling for the Biden Administration to step up its game.
On the front page of the New York Times, there was a story by a special kind of a nerd, about Russia’s efforts to sidestep western punishments, with help from friends.
“A strange thing happened with smartphones in Armenia last summer. Shipments from other parts of the world into the tiny former Soviet republic began to balloon to more than 10 times the value of phone imports in previous months.”
At the same time, Armenia recorded an explosion in its exports of smartphones to a beleaguered ally: Russia.
Gulp. Could they be profiting from the western sanctions?
Most container ships have stopped ferrying goods like phones, washing machines, and car parts into the port of St. Petersburg. “Armenia is certainly not the only one,” an analyst said. Instead, such products are coming from central western Asia, Turkey, and the former Soviet republics.
One major open question is how effectively the Western price cap will hold down Russia’s oil revenue this year.
Analysts have suggested that Russia is finding ways around the effort by using ships that do not rely on Western insurance or financing.
“Basically, Russia has been gearing up toward being able to trade outside of the rule of law,” Ami Daniel, the chief executive of Windward, a maritime data company, told the Times.
He said his firm had also detected a sharp uptick in shipping practices that appeared to be Russian efforts to contravene Western sanctions.
They include transfers of Russian oil between ships far out at sea, in international waters that are not under the jurisdiction of any country’s navy, and attempts by ships to mask their activities by turning off satellite trackers that log their location or transmitting fake coordinates. Sneaky.
Much of this activity had been taking place in the mid-Atlantic Ocean.
But after media coverage of suspicious practices in this region, the hub moved… some say, they are working the floor at City Hall.
Workday Ear Damage:
There was a nice outline of approximately $95,000,000 in IT spending at city hall for 21-22…
Sheesh.
And now, Workday, the company led by co-CEOs Aneel Bhusri and Carl Eschenbach announced that they will be laying off 3% of its employees.
In October 2022, the company reported head count of more than 17,500 employees, an increase of over 15% compared with January of that year. That means the layoffs should affect about 525 people. They say they continue to operate in a global economic environment that is challenging for companies of all sizes
As city hall watchers know, this is the company that went over budget by $13M in their efforts to upgrade our payroll systems. Bad.
Shares of Workday were up about 1% when markets opened. Employees who lost their jobs will receive three months of severance pay and an additional two weeks of pay for each year of employment. Stock vesting will continue through April 2023, and like many other tech companies that laid off workers, Workday executives said, the company will offer immigration support and optional medical benefits for six months.
The Tale of her people:
Ann-Helén Laestadius grew up among the Sámi, an Indigenous people living near the Arctic Circle, in Europe. She has red hair and looks like an Irish gal. Her novel, “Stolen,” a success in her native Sweden, is a part coming-of-age story, part thriller. It also delves into issues facing the Sámi, such as the killing of reindeer.
After the Swedish Supreme Court granted the Sámi the exclusive right to manage hunting and fishing rights in the area of Grijas Samby, near the border with Norway, reindeer killings, which have long plagued the community, soared.
Many Sámi believe this is an expression of anger among local Swedes who resented losing their hunting rights to a people they had long denigrated. “They kill our Reindeer, Laestadius told the NYT, “because they can’t kill us.”
As the author researched her story, she spoke to herders who gave her copies of a hundred reports of reindeer killings that had been filed with the police without arrests being made.
The church of Sweden has apologized for its role in repression against the Sámi - including by overseeing boarding schools that forcibly assimilated Sámi children — the government has not.
There have been some improvements since she wrote her first book. In the old days, police would never come after reports, last summer when a reindeer was killed in a little village, they sent a helicopter, she said.
What’s interesting is how artists are speaking out about Sweden’s responsibility for the treatment of the Sámi.
The Nordic Pavilion at the 2022 Venice Biennale was devoted entirely to Sámi artists.
Laestadius’ follow-up book is about the brutal boarding schools Sámi were sent to, reminiscent of the Canadian church horror shows.
Bottomline: They’re telling their stories and making change.
(Eric Preven is a longtime community activist and is a contributor to CityWatch. The opinions expressed by Eric Preven are solely his and not the opinions of CityWatch)
