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Paramount : Swap Meet Obeys, Pays City

May 01, 1986

After nearly a year of refusing to comply, the swap meet in Paramount has paid more than $335,000 in delinquent taxes to the city.

Modern Development Co., which operates the swap meet on its 27-acre Paramount Drive-In, had refused to pay the tax levied on it and its vendors last June 4 by a majority of the five-member City Council.

The council passed an ordinance requiring that vendors pay $1 per day and that Modern Development pay a business license fee of $1 per day for each vendor. Modern Development claimed the tax was discriminatory.

On March 10 in Los Angeles Superior Court, the city was granted a preliminary injunction ordering the company to turn over the revenue. A contempt hearing had been scheduled in Superior Court on Monday regarding Modern Development's refusal to pay.

After the company delivered $322,641 in back taxes on April 18 and promised to continue to make payments as required by the ordinance, the city asked that the contempt hearing be canceled, City Atty. Maurice O'Shea said.

An additional $12,000 in taxes have been paid to the city through last Monday, according to a city spokesman.

Meanwhile, a lawsuit filed last year seeking $5 million from the city, Council Members Charles R. Weldon, Esther Caldwell and Gerald A. Mulrooney, who voted in favor of the tax, and City Manager Bill Holt and former Finance Director David Spellman will continue, said Vaughan Herrick, general manager of Modern Development.

"We will continue paying the money but the lawsuit will continue," Herrick said.

The company had been paying the city about $45,000 a year in business-license fees before the tax was imposed.

The council decision to levy the tax spilled over into the April 8 election in which only Weldon, who had voted for the new taxes, was up for reelection. Modern Development campaigned against Weldon and sponsored a group called Citizens for a Better Paramount, which sought Weldon's defeat.

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