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Parking Lots Failing to Pay Taxes, Mayor Says

Villaraigosa urges the city attorney to file criminal charges against some operators. He says the city may be losing $15 million a year.

November 19, 2005|Patrick McGreevy | Times Staff Writer

Los Angeles Mayor Antonio Villaraigosa called Friday for criminal charges to be considered against operators of some of the 1,800 commercial parking lots in L.A. for failing to turn over the 10% local tax on parking fees, estimating that the city may be missing out on $15 million annually.

The mayor said auditors discovered that one operator of multiple lots has refused to pay taxes that could exceed $400,000. Others have consistently underpaid taxes, he said.

In a letter, Villaraigosa asked City Atty. Rocky Delgadillo to investigate the possibility of filing criminal charges, saying such action would show that the city is serious about enforcing the law.

"These taxes should be held in trust and remitted to the city, but some of the operators are diverting this revenue for their own use," Villaraigosa wrote.

The evidence that the city is being shortchanged was uncovered by audits conducted by the Parking Network.

The City Council agreed in 2004 to give the company 30% of the money collected as a result of its audits.

Last fiscal year, parking lot operators paid $67 million in taxes. The money goes to the general fund to help fund police, fire and other services.

The Parking Network has completed audits on eight firms with multiple lots and is looking at six more. Company President Clyde Wilson said the early findings suggest that taxes are being underpaid by 10 to 20 companies on "several hundred" lots.

The issue has been neglected for years.

Antoinette Christovale, Los Angeles' director of finance, said she cannot recall the city attorney filing criminal charges for nonpayment of parking taxes in the five years she has been with the city.

Delgadillo spokesman Jonathan Diamond said civil and criminal cases are pursued when appropriate.

The parking business is politically powerful in Los Angeles. Companies that operate lots, their executives and their employees have contributed $257,000 to city politicians in the last seven years, including $31,900 to Villaraigosa and $46,500 to Delgadillo.

Contributions to the city attorney include three checks for $5,600 each to his campaign for state attorney general from executives of Grant Parking on May 25.

Diamond was noncommittal about the mayor's request. "We're looking into it," he said.

City Controller Laura Chick, who two weeks ago found fault with city-operated parking lots, said city prosecutors should aggressively go after funds due Los Angeles.

"One of the major areas where the city needs to improve is collecting the money it's owed," she said. "I hope the city attorney will take the appropriate action to see that the city of Los Angeles receives those much-needed dollars."

A City Hall source said the firm that the city believes owes $400,000 is Prestige Parking. But owner Sam Sahab said that he has paid all taxes and that the city estimate is flawed.

"Once all audits are done, I don't think we are going to be owing any money to anybody," he said.

The mayor said auditors have also found that several parking lots are operating without a valid police permit. He wrote a separate letter to Police Commission President John Mack asking him to find a way to ensure that operators obtain permits.

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