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Assessment Proposed to Save Ailing Chamber of Commerce : Finances: The City Council plan would cost businesses $75 to $400 annually. In return, the chamber would focus on promoting the city.

June 28, 1992|GERALD FARIS | TIMES STAFF WRITER

SOUTH GATE — The City Council is considering a citywide business assessment to finance the struggling South Gate Chamber of Commerce, in return for a marketing campaign to lure new businesses and jobs.

Under the proposal, drafted by a chamber consultant, the city subsidy and voluntary membership dues would be replaced with an annual fee of $75 to $400 a year from all business-license holders. (The assessment would be based on the amount of business tax paid now.) The entire city would become an assessment district, but apartment house owners, nonprofit organizations and businesses that operate in the city but are headquartered elsewhere would be exempt.

All businesses would automatically become chamber members, boosting the roster from 250 to 2,500, according to the chamber proposal. The assessment would generate $256,275 a year for the chamber, which now has a budget of $155,000 and only one full-time staff member.

In return for a higher income, the chamber, which has been spending most of its time seeking memberships and funding, would promote the city, conduct seminars, publish a business directory and help with job development in South Gate.

The City Council will hold a public hearing on the issue July 14.

Councilwoman Mary Ann Buckles objected to the assessment being mandatory and said that in the current economy, the fees are too high. She suggested a range of $25 to $250, which could be increased as the economy improves.

"We need a lot of input on this from the business owners and the citizens," she said. "Some business owners say, 'It's a great idea, but it's too high.' Others say, 'It's disgusting. I'm going to move.' "

Councilman Jerry Garcia also voiced concerns about the fee, but said he likes the concept. "The chamber benefits all, and all should support it," he said.

Other council members could not be reached for comment.

City staff members, looking for ways to economize in the face of declining revenues, said they would like to end the annual $70,000 to $90,000 chamber subsidy.

"It is really not the job of the city to subsidize the chamber," said Andrew Pasmant, community development director. "This is a request from the chamber so it can be self-sufficient."

Chamber officials acknowledged that voluntary memberships in the organization have fallen off in recent years, but said the proposal would be an equitable way to support an organization that benefits all businesses.

"Everybody pays a fair share," said Lee Strong, a Whittier consultant who worked with the chamber to draft the proposal. "It also means you can do a lot of programs. It's a fairly low assessment, and it gets a substantial amount of money."

Strong said a new business fee would not backfire and discourage businesses from coming to South Gate. "It's an incentive for people to come to a town with an active and effective chamber," he said.

Chamber officials originally suggested maximum fees of $1,000. Since that proposal was replaced by a range of charges, they have received little opposition to the assessment, Maxine Judkins, the executive manager, said.

But Joe Selleh, owner of a company that distributes fasteners to aerospace and electrical companies, said he receives no benefits from the chamber and called the compulsory assessment, "highway robbery."

Even chamber members are divided on the proposal. Gene Harris, president of an aerospace testing laboratory and a chamber member, said the chamber should continue to be a voluntary organization because it does not benefit all businesses equally.

And unlike Strong, Harris said that adding a new fee doesn't encourage business in hard times. "We don't need assistance increasing our costs," he said.

Restaurant owner Bonnie Guthrie said she was skeptical at first but changed her mind because of requirements for an outside audit of the chamber's performance and an annual public hearing on continuing the assessment. Guthrie is president of the Tweedy Mile Assn., which promotes South Gate's major retail area with an annual city assessment of $15,000.

Pasmant also said the city wants the chamber to become a partner in economic development through aggressive programs to retain and attract business.

"We need the help of the business community in doing it," he said. "We can't do it on our own. Having a chamber that is funded adequately is a key part of that."

The assessment would be based on a state law that has been used extensively to fund downtown business associations, but less frequently for citywide chambers of commerce. One chamber that has used it is Lynwood, South Gate's neighbor on the south.

Bernard Lake, Lynwood chamber executive director, said the Lynwood assessment provides $120,000 to the city each year, of which the chamber gets $70,000. The rest is used for other promotional events benefiting business. The Lynwood chamber also retains a voluntary membership system, which brings in additional money.

The assessment was started about seven years ago and enabled the Lynwood chamber to stabilize its finances and begin working to attract new businesses.

"Prior to that, we were having a difficult time keeping our doors open," he said.

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