Simmer Down: Hermosa Beach’s year that wasn’t
It was the year that almost happened in Hermosa Beach, but didn’t.
A potentially bankrupting $700 million lawsuit kept the city in a holding pattern, the frequently controversial nightlife scene kept itself out of harm’s way, and the town was largely spared from the ax man and the tax man.
As 2012 prepared to dawn, and Hermosans readied for a New Year’s Eve celebration that was rescued by the Chamber of Commerce from potential oblivion, they could count the blessings, or the curses, of the change that wasn’t.
Not yet
The year 2010 gave the city a second life in a $700 million breach-of-contact lawsuit by a spurned oil company. In a legal Hail Mary, attorneys for the city asked an appeals court for one last chance to argue that Macpherson Oil’s planned drilling project in Hermosa – for which it held a city contract – was too unsafe to allow.
The Hail Mary connected, and Hermosa attorneys will be given another chance to defeat the lawsuit outright, in a case that has wound up and down the court system for 13 years.
During 2011, the trial court set a date for the big legal showdown – in 2012.
So throughout 2011, the Macpherson lawsuit did what it does best, hanging over the heads of the city, threatening to resolve itself one day.
Party on
On the nightlife front, the party-hearty downtown continued to draw flak from its critics, but the nightspots were spared from any major civic aggravation.
The Planning Commission made its yearly review, and determined that no establishments had to be singled out for close analyses. In the past, nightspots that were singled out saw penalties including earlier closing times.
In a mellowing move on the popular Pier Plaza, Greg Newman and partner Ron opened Palmilla Cocina y Tequila, a more upscale restaurant than their Sharkeez, which anchors the Plaza on the other side.
Greg summed up the Cocina appeal thusly: “You know, as we get older we might stop going to Sharkeez as much and start coming here more.”
Hermosa’s nightspots didn’t go entirely unscathed in 2011. Once again they became a campaign issue in the City Council election, and while two newcomers critical of the nightlife ran hard and polled well, they failed to unseat the two incumbents whose posts were up for grabs.
Taxman cometh?
No, the taxman did not cometh, at least not in his most taxing visage.
But for much of 2011, it was the year of living dangerously for alcohol-serving nightspots in a tax battle that started with a bang, before it ended with a surreal whimper.
The story began early in the year when activist Jim Lissner gathered voter signatures for a ballot measure to dramatically increase business license taxes for some nightspots, aiming to cover costs of police and other services to the downtown.
Over the summer, businesspeople freaked out when a city analysis found that the cost of some business licenses could soar from less than $3,000 to a high of $640,000 a year. The entire City Council vigorously opposed Lissner’s measure, while restaurateurs threatened legal action, saying they could be driven out of business.
A city committee already had been meeting to discuss changes to the license taxes, which had not been raised on any business in 23 years. The committee presented its own ballot measure to the City Council, imposing more modest tax hikes on nightspots, with a cap at $8,000.
Then, in a striking about-face, Lissner repudiated his own measure, telling the City Council that if he could, he would remove it from the ballot.
Lissner had become convinced that his initiative, if approved by voters, would draw legal challenges from businesspeople. He pointed out that the city would be the defendant in such a lawsuit.
“I don’t want the city to face any more litigation,” he told reporters.
In November, voters looked at their ballots to see the “argument in favor” of Lissner’s measure, signed by Lissner, begin with the sentence: “Please vote NO on this measure.”
They did, by a whopping 54 percentage points. They also approved the city’s competing measure by 20 percentage points.
Ax man cometh?
No, the ax man did not cometh, at least not in his most axing visage.
Hermosa continued to tighten its belt, freezing pay levels, leaving some positions vacant, and becoming the first area city to reach agreement with its workers on a two-tier pension system in which future employees will see reduced retirement packages.
Councilman Kit Bobko said the moves did not add up to enough belt-tightening, pointing to unfunded future pension costs that loom over numerous municipalities. He pushed to consider outsourcing some city jobs, such as parking enforcement and animal control.
In June, a budget session broke down amid vigorous exchanges and what Mayor Peter Tucker called “shouting matches” involving Bobko and Police Chief Greg Savelli. Later the same month, Bobko’s proposal was tabled.
Then in July, pension costs returned to the headlines when a Los Angeles County civil grand jury singled out Hermosa’s $14 million in unfunded pension liabilities for a cautionary analysis. The city’s annual general fund budget is about $26 million.
But if the ax man did not come in his outsourcing guise, he came in a call for possible pay cuts, as Councilman Michael DiVirgilio received unanimous support to seek pay and/or benefit cuts as part of an attempt to cut the overall budget 10 percent.
DiVirgilio said the city’s workforce has been reduced 12 to 14 percent by attrition in the last couple of years while total employee costs dropped less than 1 percent, showing that salaries and benefits should be examined.