Business Owner to City Council: WEHO IS DYING

The following letter was sent by Cobi Levi, owner of Alba Los Angeles.    Alba is an Italian restaurant located at 8451 Melrose Ave., within West Hollywood’s borders despite the company title.   This letter is dated addressed to all city council members and dated August 14th.  The letter was retrieved by WEHOonline after a recent public records request was submitted.       

Good Morning All.

My name is Cobi Levy, I’m the owner of Alba Los Angeles a new Italian restaurant at 8451 Melrose Ave.  

I am writing with a deep sense of alarm and urgency. The recent closure of five prominent restaurants from best-in-class operators—Stella, Catch Steak, and MXO, with Lavo and Chez Mia soon to follow—is not an isolated event. It is the inevitable result of a well-meaning but ultimately self-defeating trajectory: years of regulations and progressive policies layered atop one another, creating a crushing weight no business can withstand. We have reached an inflection point for the viability of our local business ecosystem—and without decisive change, the vibrant character of West Hollywood will disappear.

We must start with a simple question: Do we want successful hospitality ventures in West Hollywood and Los Angeles County? If the answer is truly “yes,” then we must be honest about what it takes to achieve that. Are we welcoming to new businesses? Are we supportive of existing ones? Are we fostering a business-friendly environment?

Right now, the evidence says otherwise. While the city pays lip service to supporting business, its policies and processes act in direct opposition. If we genuinely want the answer to be “yes,” we must act differently—because the wave of recent closures is not random; it is the direct and foreseeable result of the status quo.

The challenges are clear: exorbitant labor costs, excessive barriers to entry, and a regulatory environment that actively discourages investment.  

Tipped Wages
The current minimum wage structure for tipped employees—though well-intentioned—ignores the reality of a service-based economy. In my restaurant, waiters routinely earn over $50 an hour with tips. This wage mandate does not meaningfully improve the lives of employees who already make well above the minimum; it simply drives operating costs to unsustainable levels, forcing closures. The fix is straightforward: adopt a tip credit as 42 other States have, to create a fair and sustainable model for both employers and workers.

The Bureaucratic Gauntlet
Opening a restaurant in West Hollywood is not a straightforward process—it is a punishing gauntlet of disconnected, overlapping, and often contradictory approvals. Instead of a coordinated system, business owners face months or years of delays, watching capital evaporate before a single meal is served.

My own experience with ALBA illustrates the problem: I was required to install sprinklers on an outdoor patio (a county rule, but still an unnecessary burden). We lost months resolving a garbage room design. Plans were reviewed and tacitly approved, only for me to later learn—after the fact—that I needed a public hearing, which was unopposed and delayed us another six months.

A new business must secure a Regulatory Business License from the city, navigate separate “Plan Checks” and inspections with the LA County Department of Public Health, obtain permits from the Building & Safety Division, meet Fire Department requirements, and secure a liquor license from the state’s Alcohol Beverage Control. Each department works in a silo, often issuing conflicting guidance.
This labyrinthine process is a tax on ambition. It is a system that inadvertently punishes investment and favors stagnation. The result is a city that is too difficult to build in, and the closure of five major restaurants is a clear signal that this system is failing. We need a fundamental shift in our approach to regulation—one that values creation over control.

This structure is not merely inefficient—it is destructive. Departments operate without urgency or accountability. Short workweeks, routine out-of-office delays, and month-long review timelines are accepted as normal. Issues that could be resolved in a single all-hands Zoom call instead drag on for weeks or months. The helplessness of watching an investment decay while trapped in procedural limbo is enough to drive even the most committed entrepreneurs away.

A Warning from Elsewhere
California recently amended CEQA to speed housing approvals, acknowledging that overregulation has become a roadblock to progress. Last week the WSJ reported the city of New Rochelle, New York, revitalized its downtown by loosening zoning and streamlining permitting—proof that a pro-growth, pro-business approach works. As Derek Thompson writes in Abundance, the 2020s are not plagued by reckless overbuilding, but by paralysis-by-process. West Hollywood is no exception. 

Ambulance Chasers
Equally damaging is the unchecked rise of labor-related litigation targeting employers—particularly those in hospitality. A small group of opportunistic attorneys has turned PAGA claims into a cottage industry, preying on small businesses with lawsuits they know will likely be settled at exorbitant cost.

I experienced this firsthand when an employee—represented by an attorney with multiple similar filings—made false accusations we could have easily disproved with video and witness statements. Yet our insurance carrier insisted on settling to avoid the expense of litigation.

California’s Private Attorneys General Act (PAGA) has created a legal framework that enables this exploitation. A 2023 study by the California Business & Industrial Alliance reported that businesses facing PAGA lawsuits were 258 times more likely to issue WARN notices (i.e., to lay off 50 or more employees), signaling a direct threat to business viability. These suits often come with devastating financial consequences—employers faced average settlements close to $4 million, with attorneys’ fees averaging over $1 million.

Looking statewide, court-handled PAGA cases averaged $1.12 million per settlement, yet workers ended up receiving only around $1,264, while attorneys walked away with over $372,000 per case. Moreover, in general filings, employers now face more than 9,464 PAGA notices annually—an increase of nearly 22% over the previous year. The sheer threat of a PAGA suit—even frivolous—imposes immense pressure to settle, diverting resources away from job creation and community investment.

Proposed Solutions

1. Create a Business Liaison Office to Streamline Openings
West Hollywood should establish a dedicated Business Liaison Office—a one-stop hub to coordinate across city departments, consolidate approvals, and guide businesses through the permitting maze. I experienced first hand the incredible benefits from Mike Bloomberg’s version in New York. Too often, even city officials have shared my frustration, admitting they felt powerless to intervene and leaving me with the response: “Sorry, there’s nothing we can do.” This office could be self-financed, as new businesses would gladly pay for such a service—pennies compared to the massive costs caused by months of unnecessary delays.

2. Set Timelines and Accountability with Performance Metrics
Implement clear performance benchmarks—like review “shot clocks” and public tracking—to create predictability and pressure to perform. San Francisco’s PermitSF initiative introduced public dashboards and departmental time-targets, cutting median planning approval times from 222 to 133 days and building review from 258 to 209 days. 

3. Pilot a Tip-Credit Program with Data Oversight
Launch a 3-year, data-backed pilot allowing tip credits for full-service restaurants. Include safeguards ensuring tipped workers’ earnings are protected, with rigorous payroll transparency and quarterly reporting. If results affirm both worker earnings and business resilience, extend it; if not, it sunsets automatically.

4. Reform the Labor Litigation Environment
Advocate for local and state reforms that limit excessive or predatory labor lawsuits—particularly under PAGA. Consider mechanisms like mandatory mediation or administrative resolution to reduce frivolous litigation while preserving workers’ rights.

The closure of these five restaurants is not a coincidence—it is a clear warning. I’m pretty good at what I do and I’ve built an incredible restaurant that is packed every night, yet we are barely making it. I love being in West Hollywood, I have been offered so many more projects here, alas I have turned them all down, it just doesn’t make sense to do business here now.  I urge you to speak to the owners of these restaurants that closed, they are incredible operators and they will tell you the same things.

Without bold change, West Hollywood risks losing the vitality, diversity, and economic strength that make it unique. We can either remain trapped in the current cycle of overregulation and stagnation, or choose a path that supports business, fosters growth, and restores the city’s vibrancy. The choice is ours—and the time to act is now.

Cobi Levy
Prince Street Hospitality

E-mail correspondence with the City of West Hollywood (including any attachment) is a public record under the California Public Records Act, which may be subject to public disclosure under the Act.