Mayor Pro Tem bungles the math in rebuttal to La Boheme’s business struggles

Mayor Pro Tem John Erickson addressed the employees of La Boheme at City Council’s Monday night meeting, asking them if they knew the worth of their company, which had to let employees go after untenable minimum wage increases. He then stated the figure “$30 billion” three times, attempting to persuade the employees that the owners are extremely wealthy. However, his figures were deeply inaccurate.

Global Dining Inc. is a large restaurant company headquartered in Japan with international investments. The company’s total market capitalization is actually $31 million, not billion. This valuation includes 43 locations in Japan and 2 in Los Angeles. The average value of each location is approximately $700,000.

Global-Dining of CA, Inc. is a distinct entity that owns two locations. It operates as a limited liability corporation, a structure commonly used to limit investor losses to the amount invested in the shell company. This also serves to protect the parent company from potential litigation and provides an option to exit leases if needed.

In addition the market capitalization of any company, or the cost to buy all the shares has nothing to do with a company’s profit or loss. There is a difference between a balance sheet and a profit and loss statement. A major issue in the City of West Hollywood is that some members of the City Council lacks a fundamental understanding of business structures.

If you hypothetically applied this concept to a family, in a house, who cannot afford their increased property taxes or energy bills and appeals to an elected official for help. “We need help from these skyrocketing taxes.” And the official reply’s, “but your house is worth a million dollars, you can afford it.”

Lucian Tudor, the CEO of Global Dining of CA, Inc., has expressed serious concerns following a series of robberies at La Boheme and issues related to worker ordinances that are leading to layoffs and a potential closure. As of now, Council Member Erickson has not responded to the owner’s request for a meeting.

Erickson stated: “La Boheme is owned by Global Dining Group, which is worth 4.4 billion yen based in Japan. That is equivalent to $30 billion dollars in United States currency. So, it’s owned by a global dining corporation, and they let 20 bus people go. I understand that every business has a top sheet and metrics they have to consider to make their business work. I’m not saying that just because it’s worth $30 billion dollars—again, $30 billion with a “B”—that makes any policy correct or wrong. However, I have to argue that when you talk about inflation prices at the supermarket, those were blamed on hazard pay for workers during the pandemic. Kroger is worth billions and billions of dollars, and they never took away executive-level compensation. They provided those executives with that money and never gave it back to the staff.

This is a conversation that I think we are having, but when you come here and then attack members of the dais, I use the word “attack” because no one is putting political preference over public policy here, no matter what you say. And I don’t agree with the assumption that that is the truth. When you come up here and talk and ask for help like a member of our community, we want to help and listen to you, but the message is getting muddled, and I don’t think that’s appropriate at the moment. I’m happy to sit down with Lucien. From what I’ve been told, they have La Boheme as a jewel in their property area because it’s in West Hollywood. If they put it up for sale, they put it up for sale, and I’m happy to talk about that. But again, La Boheme is owned by a group that is worth $30 billion dollars.

I am trying to see the small business aspect here, and I’m happy to meet with you again, Lucien. But we have to figure this out, and we will figure it out. To Lucien and the people who came here, there is a one-year waiver that you can apply for. If you feel that the policy is hurting your business, that’s all I’m going to say.”

@wehovillenewsMayor Pro Tem bungles the math in rebuttal to La Boheme’s business struggles

♬ original sound – WEHOville

Lucien replied: Mayor Pro Tem John Erickson,

We ask that you correct the Public record of the August 21st Council Meeting, where you represented and confirmed, that our parent company, Global Dining is a $30 B corporation. To give the Council and the Public a sense of how much money we are worth, you also compared us to a grocery store, which we didn’t find appropriate. Even grocery stores’ profits are only 2% net, regardless of gross receipts. No business will operate any venues at a loss. This is simply not justifiable from the business perspective. I deeply care about employees making a decent living wage, but for low profitability businesses, such as restaurants and food industry, in general, it is just not sustainable! It’s better to have a job at $16 plus tips than no job at all.

Obviously, your motives were to find memorable and damning sound bites to attack La Boheme. The sound bites came from Japanese Stock Exchange. Unfortunately, they were not accurate. When converted from Yen, the real value was not 30B but 31M dollars. Again, we ask the Public record to be corrected.

I want to clarify that saying “larger political ambitions drive policy decisions” was not meant as an attack. It’s a reality based on facts, which have been published and voiced in numerous and credible sources. Being a West Hollywood Mayor, elected because of the involvement and support of “Local Here 11”, who also lead the effort for the highest minimum wage in the country, fits the profile of positions with more power such as supervisor or congress woman.

I’m aware that my accent or inaccurate grammar can seem too direct. But I’m never dishonest or profane.  I appreciate helpful criticism, but being attacked or demonized is not acceptable.  It makes others unwilling to speak. 

Moving On

 I would like to move past our exchange at the Council Meeting and a find a common ground that is solution-focused, where differences remain, but held within a context of working for the better good of our community.  

Regarding the waiver being offered by the city, we believe that this is a temporary solution to a fundamental problem that requires an immediate and meaningful dialogue. A dialogue that has not been available to the stakeholders when this policy was being developed.

I’m prepared to fully open La Boheme’s books for you and other council members to begin a constructive conversation.  It could provide a more tangible way to understand the change that occurred on Jan 1st, 2023, with real-time information.  However, I’m open to whatever suggestions you may have that are in our collective interest.

Safety and inflation are the most significant issues that impact the quality of life of our community.  After 32 years, La Boheme feels the responsibility to voice those concerns. Maybe waving the sales tax for food industry, will help our residents deal with inflation, as well as bringing revenue to the local businesses. I hope this letter is received with the spirit of good as intended. 

I look forward to speaking with you soon.

Regards,

Lucian Tudor
CEO

 Lucian –

You’re absolutely correct and I will correct the record that Global Dining, Inc is worth $31 million dollars. 

I was busy converting Japanese Yen to USD at a late hour when my eyes were very tired. I apologize for this oversight and again will correct the record that the correct # is $31 million. 

All the best,

John