Advertisement
YOU ARE HERE: LAT HomeCollections

Bell Retains Consultant for Planned Sale of Bonds to Buy Poker Club

November 15, 1987|RENE ROMO | Times Staff Writer

The Bell City Council last week took another step toward acquiring the California Bell Club, voting 5 to 0 to retain Miller & Schroeder Municipals Inc. as financial consultant on the proposed sale of about $8.5 million in bonds it plans to use to buy the embattled poker club.

Conflicting claims of ownership have been made by several groups of shareholders, resulting in protracted litigation. The city intends to use condemnation proceedings to buy the club and sell it to a single owner.

"We felt that the multiple ownership that has existed in the club's organizational structure for years simply has not . . . provided a stable business and a stable tax-revenue stream for the city," said Byron Woosley, the city's chief administrative officer.

"We are going to do what it takes to take over the club," said Councilman George Mirabal. "We're disappointed over their performance the last couple of years. They brought this on themselves."

Resolution Passed

The Community Redevelopment Agency voted to begin proceedings to take over the club in early September, and on Sept. 21 passed a "resolution of necessity" stating the grounds for condemnation.

Acting as the Community Redevelopment Agency, the council on Monday voted to accept the offer of Miller & Schroeder over three competing firms to advise the city on when to solicit bids, what kinds of bonds to issue and what underwriters to seek, City Atty. Richard Flandrick said.

The city has used Miller & Schroeder several times in the past, most recently in late October to negotiate the sale of $6 million in short-term tax allocation notes to Smith-Barney for upgrading redevelopment project areas.

The poker club, one of a handful in Los Angeles County, is the city's largest single taxpayer, providing about 12% of all tax revenue, Woosley said. At its peak in 1982 and 1983, the club generated $2 million a year in city taxes, but that amount fell to less than $1 million in 1985.

In 1986, the club generated $1.3 million in tax revenue for the city and it has produced $800,000 for the first nine months of this year, city records show.

"We want to stabilize and maximize that revenue source," Woosley said.

The city had granted the club tax breaks from 1985 to 1987 in an effort to stimulate business, temporarily waiving a part of its monthly tax levy. The levy was based on a sliding scale of about 13% of gross revenues, and under the waiver dropped at times to as low as 8%.

Saw No Change

"I saw no significant change in the amount of money the club made per month . . .," Woosley said. "The intent of the tax break was to allow them to invest that money back in the club to help business, and I saw no significant improvement."

Before the city can begin issuing bonds, the court must decide whether Bell has the authority to condemn the club.

Flandrick said the club's general partner, California Bell Club Management Corp., filed an objection to the Redevelopment Agency's right to acquire the business Nov. 6. The trial is expected to take place within the next two months.

"Condemnation rests within the city's power when it's in the best interest of the public to take over a business," said Howard Manning, an attorney representing the California Bell Club Management Corp.

"(The city's position) is that because what appears to be some dissension between limited partners and the general management is interfering with the public's right to get tax revenue, they are taking action," Manning said. "I'm not sure if that is proper action."

If the court rules in Bell's favor, the next step will be to determine the assessed value of the property.

Advertisement
Los Angeles Times Articles
|
|
|