Los Angeles City Council members have spent much of their time in recent weeks mulling the city's budget woes and the possibility of layoffs, but budget-tightening only goes so far when it comes to gala events such as the Grammy Awards.
The council agreed Tuesday to waive $124,163 in city fees associated with the Grammy Awards, which will be held on Feb. 8 at the Staples Center. That might be chump change in the music industry, but the city is facing a $433-million hole in its budget next year -- making fee waivers a touchy subject for city officials, particularly when event sponsors are providing thousands of dollars worth of swag for talent.
Last year, Grammy presenters and performers were offered about $30,000 in gifts. There's no final estimate yet for the value of this year's gift bags, which are being put together by the L.A.-based firm Distinctive Assets. The bags, however, will include trip vouchers, spa gift certificates, hand-designed Christopher Michael chocolates, Catdaddy liquor, and The Sports Club/LA memberships. In the Xbox 360-sponsored Grammy Talent Lounge, they can pick up additional goodies such as sunglasses, jewelry and Gibson guitars.
Mayoral candidate David "Zuma Dogg" Saltsburg, a city gadfly, was one of two members of the public who spoke in opposition to the item, which was approved without discussion by the 13 council members present.
"I wonder if the city of Los Angeles constituents, the voters, know that you're giving $100,000 or whatever it is, to the Grammy Awards. This special-event fee money is to provide benefit to the community -- open to the public -- not to be used for commercial private entities," Saltsburg said, adding it was a "money-sucking, vampire drain on the general fund."
Over the last two fiscal years, the city waived about $750,000 in fees for award shows.
The city gives up about $5 million annually waiving fees for the special events of nonprofit groups, but because of the budget crunch, the council recently gave preliminary approval to a change requiring nonprofits to pay for at least half those fees.
Mayor Antonio Villaraigosa does not have jurisdiction over fee waivers, but his spokesman Matt Szabo said that although Villaraigosa is a "big supporter" of the Grammys, he believes that the city's "fee waiver policy is clearly broken and needs to be fixed."
"At a time when we could be facing a half-billion deficit, the council absolutely must reform a policy, which costs the city upward of $5 million a year," Szabo said.
Councilwoman Jan Perry, who sponsored the Grammy waiver, said the city would more than make its money back. In her proposal, she said the event generates about $45 million in economic benefits for the city. Although the Grammys used to alternate between New York and L.A., Los Angeles has hosted the event in recent years with the exception of 2003 when L.A. lost the awards show to New York -- an outcome Perry would like to avoid.
"This is an event of international significance that puts an enormous spotlight on the city of Los Angeles, generates a lot of revenue in terms of hotels, restaurant, service opportunities," Perry said. "This is something that competitively . . . we cannot afford to risk losing to another major city."