Doing Business In Bell Meant Paying $140,000 In ‘Hidden Fees’
When Jose Vazquez moved to Bell 25 years ago, opening a business was simple and fast.
“When I applied for a license for my tire and wheel shop, I paid the license fee and the city said, ‘No problem,’” Vazquez recalls. “Just like that, I started working.”
A few years later, his company, Savas Tires, relocated to Gage Avenue, in the heart of the commercial district in Bell. Vazquez said applying for a change of location was also relatively manageable.
Ten years ago, Vazquez wanted to move his business across the street to a better-suited location. This time, however, instead of receiving approval from the city quickly, Vazquez encountered resistance from the non-business-friendly regime of then-city manager Robert Rizzo.
“They told me, ‘You can’t do wholesale there,’” Vazquez said. “I said, ‘I do the same thing across the street, why can’t I do it there?’”
After delaying the approval process for weeks, the city finally told Vazquez he could move, but only under an exceptional arrangement.
“Mr. Rizzo and the city’s lawyers told me, ‘We want to let you run the business across the street, but you have to pay us 1 percent of whatever you make through wholesale or the internet.’”
Vazquez consulted with his family and accountant, who all agreed that it was not right for the city to arbitrarily impose this fee when it had not been doing so at the location across the street.
“We felt like we had no choice if we wanted to keep our business in Bell,” Vazquez said.
According to Vazquez, in the first year after agreeing to the deal, he paid $500 per month in addition to the regular licensing fees. The following year, the city collected an extra $1,000 per month.
In the third year of the agreement, Vazquez paid a whopping $12,000 per month, plus 1 percent of revenue from wholesale and Internet sales.
In total, Vazquez said his company paid $140,000 in what he calls “hidden fees” to the city.
Finally, Vazquez decided to move part of his business to the community of Rancho Dominguez in south Los Angeles County, where he did not pay any extra fees.
Vazquez said his story is one of dozens of “horror stories” that occurred under the administration of Robert Rizzo, who now faces 54 felony corruption charges.
“When the scandal broke last year, I realized the huge sums of money I was paying to the city were going towards a pool,” Vazquez said. “The city was attacking businesspeople to collect money for themselves.”
Today, Vazquez serves as the president of the Bell Business Association (BBA), founded in October 2010 as a counter to the Bell Chamber of Commerce, which business owners say did little to help the community because it was an entity of the Rizzo-controlled city government.
Most cities have independent Chambers of Commerce that help businesses and promote economic growth, but political gridlock in Bell has prevented new businesses from moving to empty buildings, left vacant by companies who had gone out of business throughout the years.
“If we keep things going the same way, we could end up being a ghost town,” said Muñoz.
In addition to Gage Avenue, Florence Avenue and Atlantic Avenue are also once-crowded business corridors that now harbor empty storefronts decorated with For Lease signs.
“It’s common for a Chamber of Commerce to get funding from a city, but in Bell, the city basically controlled the chamber,” said BBA Executive Director David Muñoz. “It was more like, ‘If we give you funding, we get control.’ There was a board of directors, but the head director was a city employee and all oversight came from city government.”
Muñoz said the board had little decision-making power in terms of creating policy and planning projects.
“We know it’s there on paper, but the reality is that the city did not have a business group,” Muñoz said. “It was hard to get the chamber to move in a direction that was friendly to businesses at all.”
Muñoz said one business owner was told to pay $25,000 to have the city approve his license. Another man paid $500 for a permit to install a new sign on his storefront. The owner of a laundromat was asked to pay an extra $100 per year as a business tax on each individual washing machine and dryer, totaling in $3,000 of extra fees annually.
Ali Saleh, a local business owner, said it was hard enough to make ends meet during the recession and the government made it more difficult for small “mom and pop” businesses to stay afloat.
Saleh is a candidate for the City Council. He was one of the founders of the Bell Association to Stop the Abuse and serves as a director of the BBA.
“It’s hard to pay your rent and maintain your business,” Saleh said. “You had to take care of your family and now you had to take care of Bob Rizzo and his family too.”
Eighteen months before the scandal broke, some business owners discussed starting an independent business group, but initial efforts were unorganized. Business owners mobilized to take more direct action through the formation of the BBA.
“Once we all got together, we noticed we had a lot of the same issues,” Muñoz said. “We developed a mission and are slowly defining ourselves.”
The BBA started with 14 members and in the past four months has grown to include more than 70 local businesses.
The BBA hosted a public candidate forum on Feb. 1 and has sponsored a few business seminars. Leaders of the organization say they are planning monthly networking mixers and more seminars to help local business owners maximize their success.
“Our goal is to be better businesspeople in the community,” Vazquez said.
The organization’s rapid growth is indicative of the growing interest to move on from past struggled in a scandal-ridden city.
Will Work for Change
Currently, the city gives prospective business owners a thin packet of forms, outlining the necessary steps before a business can start.
For a new business, the Business License Application fee is $100 and the Certificate of Occupancy Application is $100.
Additionally, retail businesses must obtain a California Seller’s Permit from the State Board of Equalization. Restaurants, grocery stores and food-related businesses must obtain a health permit from the County of Los Angeles.
Muñoz said handing a prospective business owner a packet of forms is unprofessional an unhelpful. He said in the future, the city should hire proper advocates who will help businesses get up and running.
“We are true believers as business people here that people have to stay within certain codes that people have to follow laws and do things appropriately,” Muñoz said. “No hidden costs. No hidden agendas.”
Workers at City Hall said the city business license takes 10 to 15 business days to obtain, but some say the process can take months in reality.
“Right now, the process takes forever or some people don’t hear back at all,” Muñoz said. “This makes it very difficult for a business owner to make spending and planning decisions.”
The BBA wants proper timelines to be established and adhered to for the city to approve or reject business licenses.
The BBA said it plans to work with the new City Council to transform Bell into an economically robust city.
“We’re planning to work with the new board and let them know that businesses in Bell will not be taken advantage of,” Vazquez said. “People working for the city need to understand that they work for the businesspeople, not the businesspeople work for the city.”
Though the BBA plans for more growth in membership after the election, Muñoz said the ultimate goal is for the Chamber of Commerce to assume its appropriate role.
“One of the earliest things that we spoke about as a group is that we are actually unhappy that we have to exist,” Muñoz said. “In reality, if there was a strong Chamber of Commerce, there would be no need for us. Our goal is that eventually we end up disappearing through being fused with the chamber or not being needed any longer.”
Muñoz thinks the existence of the BBA provides the Chamber of Commerce with an independent competitor which will in turn raise the standard for business in Bell as a whole.
“We’re hoping our actions will wake up the chamber into competition,” Muñoz said. “In the end, the businesses in Bell will benefit by choosing which organization they believe will give them a better return on their investment of membership dues.”
Business owners know there is a long road ahead to building a robust economy in the city.
“The only image we have around the world is very, very tarnished,” Muñoz said. “It was a terrible relationship that the city was creating with these businesses.”
Muñoz said he hasn’t heard the same horror stories, but knows there is much more left to be done.
“It’s not just bringing in businesses, but also getting the community to shop in Bell and keeping money moving within the city,” Muñoz said.
Saleh points out that a dollar in Bell is worth the same as a dollar in Pasadena or West L.A.
“Why should our residents go far away to do nice things?” Saleh asks. “I’m not saying we need a Saks Fifth Avenue, but at least have stores that cater to our residents’ needs. There are a lot of opportunities for businesses to prosper in Bell.”
Muñoz said apprehension towards doing business in Bell is waning in light of Tuesday’s election.
“We haven’t crossed the line to be more business-friendly to our satisfaction,” Muñoz said. “We’re hoping that once the new council gets in, we will be collaborative partners in the improvement of the city.”
Reach reporter Vicki Chen here.