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Bell Club's Fiscal Health Called Better Yet Delicate

January 19, 1986|CARMEN VALENCIA | Times Staff Writer

BELL — By the end of February, the California Bell Club's financial health is supposed to be so improved that the city will be able to roll back a tax break it gave the club last year and collect its full share.

But while both the city and a representative of one of the club's owners say the gaming establishment is stronger than it was, they are cautious about making a prognosis.

"The patient is out of intensive care, but he is not out of the hospital," said Ebrahim Victory, an officer with the Landmark Holding Group, which represents 10 shareholders whose holdings total 20%.

Victory, who said the club is "just beginning to bounce back and pay old debts," said he did not know if the club would ask for additional tax breaks. But continuing his analogy of the sick patient, he said: "Don't hit him with the bills. He might get a heart attack and die."

Club manager Sam Torosian, who took over in March and who has applied to buy a controlling interest in the club, did not return repeated calls. His Los Angeles attorney, Leslie Garber, also could not be reached for comment.

Full Rate Expected

City Administrator Byron Woosley said that, when the tax ordinance expires at the end of February, the California Bell Club will be expected to begin paying the full tax rate.

However, if club operators come to the city requesting an extension of the concession, he expects that the council will want to know how "past efforts to assist the club have been successful" before making further concessions.

Councilman George Cole said he agrees. "Personally, I'd have to see something concrete that was done to turn the business around this time before I (vote) to continue relief like that," he said.

Woosley said he doesn't know to what extent the temporary remedy has helped the club, but noted that the gross revenues in December were up $55,000 from the previous month's take of $715,963.

Rocked by a yearlong federal investigation that resulted in the conviction of two former city officials and several club partners in a racketeering scheme, as well as competition from other southeast Los Angeles County card clubs, the Bell club underwent major changes in 1985.

A new management team took over in March, four new games were introduced and the club sought the tax concessions to help it meet its current obligations, in addition to paying off old debts.

One of the concessions was a change in the tax on gross revenues. The City Council agreed in August to hold the tax to 8% through the end of February. That replaced a sliding fee schedule that ranged from 7% to 13%.

The club is also due to pay a quarterly business license fee of $18,750 in April. The city waived two quarterly fees for October and this month. The April payment would be the first since July.

A lawsuit the city filed against California Bell Club last March for back taxes is still pending. Woosley said the club and the city have agreed on a payment schedule for the back taxes, but attorneys are still working out details. The City Council, Woosley said, is willing to work with the club because the new management has "demonstrated a willingness to act in good faith."

While the city still depends heavily on California Bell Club for tax revenues, it is no longer the city's largest source of revenue, city officials said. Revenues from the club account for 9 1/2% of the budget, said Steven Klotzsche, director of finance. The general sales tax now generates 13% of city revenues, he said.

Revenues Fall to $1.6 Million

After hitting the $2-million mark in 1982 and 1983, club revenues to the city fell to $1.6 million in 1984. Club revenues for 1985 totaled just $581,438, not counting the $156,708 still owed by the club for the months of January, February and March, Klotzsche said.

As a result, the city had to shave $700,000 in maintenance and administrative costs and add $125,000 from city reserves to come up with a $9-million budget for 1985-86. Fortunately, Woosley said, the city's $3.5-million reserve is "comfortable. We didn't have to panic when one of our revenue sources took a dip."

City officials say monthly gross revenues from the club have been hovering at $750,000. They say that the monthly high of $1.4 million reached in July, 1984, may never again be realized.

Victory agreed that the former glory of the club--the largest in the state when it opened in August, 1980--will never return because they no longer have a monopoly on card club players in the southeast area.

Victory said that, when the new managers came in, their prescription for a healthy club was simple: Bring in new games that will bring in new customers.

"The new games . . . saved the club," he said, adding that poker business has continued to fall while new customers play other games.

More Games Approved

The council approved pai gow in January, mah-jongg in August and pai gow poker and pan-9 in September.

Besides the new games and management, the club has simplified the accounting department system in order to speed up payment of bills and save $75,000 a year in salaries, Victory said. The system is important in controlling costs and providing up-to-the-minute information on finances, Victory said.

Torosian, Yung Sham, Kim Ton, Larry Wong and Wilson Lou have registered with the state Department of Justice for either ownership, management or an investment interest in the California Bell Club, said Mike Broderick, assistant manager of the gaming registration program.

City officials said Torosian, Sham, Wong and Lou are attempting to buy out the club's present general partners--John Gasparian, Jack Simonian and Landmark Holding Group.

Victory said approval by the Department of Alcohol Beverage Control for a license transfer and the gaming commission for a registration certificate are all that block the sale.

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