Item F3: on the city council agenda is called a “Business retention program for restaurants” and directs city staff to “conduct outreach to restaurant businesses to better understand their needs related to maintaining their operations in the City of West Hollywood” and to “develop options for a financial incentive or subsidy program to support West Hollywood restaurant businesses and entertainment venues that provide full-service dining.” The item is being brought forward by Council member Hang and Vice Mayor Heilman.
Does the City Council really need a Staff report to investigate what has been happening in West Hollywood?
Let me save you the Staff time and $75,000. Here’s a report. You don’t have to pay me anything.
“The COVID-19 pandemic caused revenue losses to West Hollywood’s hospitality industry. In 2021 the City Council approved the highest minimum wage in the country for all employees, including tipped workers within the City of West Hollywood. Then, in 2024, the City Council approved a measure that would deny any future City Councils their authority to make any changes to the same law based on market conditions.” The result of these programs has been a growth of subsidiary programs to help keep West Hollywood businesses alive. Some of those subsidiary programs include tax rebates to cannabis businesses, gift card programs to shop at local businesses, and additional measures to draw traffic into the City of West Hollywood.
We don’t need a Staff report.
Do you recall the pleas from Genevieve Morrill, president and CEO of the West Hollywood Chamber of Commerce? The “Critical State: Business in WeHo” series, which you can read again here for Part 1, here for Part 2 and here for Part 3.
We don’t need Staff to do outreach and investigate. It’s all been discussed.
Remember this letter from the owner of Chop Stop, “Why Am I Closing Chop Stop? WeHo Is Bad for Business,” which you can find here. Or this recent letter “WeHo is Dying” from Cobi Levi, owner of Alba on Melrose, refresh yourself here.
The problem at the restaurants is the highest cost of labor in the nation, with wages more than $3 per employee per hour than in Beverly Hills, the highest sales tax in California, crime that has scared people away from dining out, and the proliferation of delivery vehicles all over town that have made it just as profitable for many restaurants to support delivery and takeout versus the cost of dine-in. Customers avoid parking fees and surcharges while dining out. We don’t need a staff report to investigate.
The City has created policies that have forced dine-in prices up. And it’s not easy to host the guests in many parts of town. Last week, three of my employees were assaulted on two different occasions. The bottom line is the streets are filthy, the homeless interrupt business operations, and the root of the problem can’t be found in a City staff report.
I don’t think we need to solve these problems industry by industry. The City Council does not know enough to develop specific policies for specific industries. They make one policy for hotel workers, one for restaurants, one for cannabis. Leave the rest of us out. It makes no sense. We need policies that lift up all the businesses within the City.
Make the streets safer to begin with. It’s probably cheaper to give away plane tickets and put the money directly into the customers’ pockets to come and visit West Hollywood than a patchwork of proposals. Stop putting band-aids on problems you do not understand and that evolve with the economic trends.
Here is what I’d like to see the Staff work on going forward:
a) Develop language for a first in the nation tip-tax credit so restaurant owners are not saddled with both the minimum wage and the expense package on top of the costs of tips in wages.
b) Bring back WeHo Happy Hour, with free parking midweek on Tuesday and Wednesday during dinner hours, 6 to 10 p.m. Beverly Hills offers free parking. Welcome the customer.
c) Increase the public safety presence on an ongoing basis and drive toward a zero-incident-month safest city goal.
d) Send a note of support to Washington, D.C., in support of no taxes on tips. This would allow all West Hollywood restaurant owners to be free of the issues with regard to rising minimum wage costs. No taxes on tips would have the most consequential effect on these same West Hollywood businesses.
e) Explore cost offsets on travel to help fill all the WeHo hotels and bring customers to WeHo.
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Is it Donald Trump to the Rescue?
The tip tax credit, formally known as the FICA Tip Credit, is a federal general business tax credit available to employers in the food and beverage industry and, as of the 2025 “One Big Beautiful Bill Act,” also includes other customary tipped occupations such as salons and personal care services. It allows eligible employers to reduce their federal income tax liability by the amount of the employer’s share (currently 7.65%) of Social Security and Medicare (FICA) taxes paid on employee tips that exceed a specific federal minimum wage threshold.
FLSA Tip Credit: This rule allows an employer to pay a tipped employee a lower direct cash wage and use a portion of the employee’s tips to satisfy the remainder of the federal minimum wage obligation. The employer must ensure the combined wages and tips meet at least the full federal, state, or local minimum wage, whichever is highest.
The FICA Tip Credit is a tax incentive for the employer, while the FLSA Tip Credit is a mechanism for meeting minimum wage requirements for employees.
To help West Hollywood restaurants survive we need to level the playing field on their costs. The city council has proved it has little understanding of the effects of their polices on these businesses. We don’t need another staff report. We need a level playing field to help WeHo’s businesses compete.
Thank you Larry for stating what is obvious to everyone outside of City Hall. The Chamber of Commerce clearly should have been asked to report to City Council rather than waste a lot of staff time. COVID was the start. Then much of the immigrant population that worked as bus boys, dishwashers and cooks relocated outside of LA and the people who remained demanded, (not unreasonably), higher wages. West Hollywood’s commercial rents remain absurdly inflated. Now the price of food and utilities have soared adding to the challenges of opening or operating a restaurant. As restaurant prices have risen along… Read more »
And on January 1, 2026,West Hollywood’s minimum wage for restaurant workers will increase more,further destroying the restaurant business,its like west hollywood is bad for business,residents and the homeless.Plus now they want to build a cannabis shop at 8001 Santa Monica Blvd,which will be the closest dispensary near a residential neighborhood in west hollywood,in return it will increase crime in the fairfax neighborhood,because west hollywood wants to remove the 3 block security requirement for dispensary patrols.
Did you mean subsidized?
Subsidize verb (used with object)subsidized, subsidizing
Subsidiary — adjective
Our dim-witted city council members are gonna have to find someone to explain to them what Larry is saying here.
That made me laugh because it’s so true. Then I cried, because it’s so true.
In a rare note of balance in favor of our beloved leaders:
Many of the issues negatively affecting WeHo’s economy are downstream of the downturn and contraction in the entertainment/creative industries. There are myriad issues that led us to this point but the governance causes are largely City of Los Angeles/County/State, rather than here (taxes, regulations, general Deomcrat bungling of the business economy).
The city council was warned what their policies would do to our city and they ignored all. And now the city is living with the consequences or it’s more like now the city is dying with the consequences. Let’s hope we have three good viable alternative candidates to the union lackeys come next election.
The author nicely summarizes what needs to be done to fix issues that were broken by council actions and that now the council attempts to fix through often performative band aids. What is truly needed is a council populated by people with the real-world experience that is demonstrably lacking in the current council majority.
Yes!!!!👏 👏👏👏