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Business allies cool to Garcetti's minimum wage plan

Critics say Mayor Garcetti's minimum wage plan is too much too fast

Atwater Village businessman Luis Lopez used to be a big fan of Los Angeles Mayor Eric Garcetti.

Lopez, who owns an auto repair shop on Fletcher Drive, gave $100 to Garcetti's 2013 campaign for mayor. He spread the word about Garcetti's candidacy on the Facebook page of the local Chamber of Commerce, where he serves as executive director. And he welcomed Garcetti's election victory, saying voters had picked a mayor who knows the needs of small businesses.

Now, as the mayor fires up his bid for reelection, that enthusiasm is gone. Lopez doesn't like Garcetti's minimum wage proposal, or the way it was unveiled. He described Garcetti staffers as largely unresponsive on the topic and says he won't vote for him in 2017.

"The way he has turned his back on the mom-and-pop businesses is just disgusting," Lopez said. "He's just forgotten who supported him."

With the City Council expected to vote on the minimum wage plan later this month, some of the small-business owners who backed Garcetti's first mayoral bid are having misgivings. The mayor, they say, should have done more to get the word out about his proposal. They also described the plan — which would boost the hourly minimum to $13.25 in 2017, up from $9 — as too much, too fast.

Garcetti defended his handling of business issues, saying in a statement that he had cut red tape at City Hall, rolled back the size of the business tax and fought for an expansion of the state's film tax credit. The wage proposal, he said, has been "extensively studied" in recent months.

Once the wage goes up, "businesses in our city will gain from lower turnover and training costs and more customers who can spend into our economy," Garcetti said. "Poverty is bad for business. That's why our proposal to raise the minimum wage has been endorsed by businesses of all sizes and the Los Angeles Business Council."

The complaints about Garcetti come as council members are considering a proposal to give small businesses extra time to comply with a set of minimum wage hikes. One proposal, circulated last week by Councilman Paul Krekorian, would keep businesses with 50 or fewer employees from paying $13 per hour until 2019, two years later than proposed by the mayor.

With those ideas up for debate, business owners who were initially taken aback by the mayor's plan have turned their attention to the council, said Leron Gubler, president and chief executive of the Hollywood Chamber of Commerce. Gubler said he sees little evidence the wage proposal has seriously eroded Garcetti's standing among small-business owners.

"Certainly this is an issue that hits businesses in the pocketbook more than others," he said. "But I haven't detected among our members a wave of dissatisfaction with the mayor."

Garcetti's proposal doesn't trouble Ron Ballesteros, owner of Los Angeles Baking Co., who hosted an event on the minimum wage last year attended by the mayor and Vice President Joe Biden. Ballesteros said businesses that know what they're doing will be able to manage the rise in costs caused by the wage increases. He also praised Garcetti's performance, calling him "more accessible" than previous mayors.

Still, at least some of the mayor's small-business backers are lukewarm on their candidate. Restaurant owner George Abou-Daoud, who donated $2,300 to Garcetti's 2013 campaign, said the mayor should have sent notices of the wage proposal to each of the 450,000 businesses that are registered to pay the city's gross receipts tax. Had he done that, city officials would have received more feedback and a fuller picture of the proposal's effect on them, he said.

"When I was phoning around to restaurants, 30% of the people I called didn't even know there's a proposed wage increase on the table, and those who knew didn't understand the scope of it," he said.

Abou-Daoud, unlike Lopez, supports Garcetti's reelection bid. But he's lost interest in helping the mayor's team. "The last election … I held events for him and gave to his campaign," he said. "This time around, I'm not going to."

Garcetti spokesman Jeff Millman said the mayor's staff had made an extensive effort to engage the public, meeting with more than 300 business owners or their representatives and attending multiple hearings on the proposal. The mayor has spoken with many business owners himself, he said.

During the 2013 mayoral campaign, most the city's biggest business groups backed Garcetti's opponent. Then a councilman, Garcetti turned to the business people he'd worked with in his Hollywood-to-Echo Park district. One was Andy Hasroun, owner of the Atwater Village sausage restaurant Link N Hops and the adjacent 55 Degree Wine. Days after Garcetti emerged as the top vote-getter in the mayoral primary election, Link N Hops served as the backdrop for a campaign event showcasing the councilman's work in attracting new businesses.

When Garcetti announced his wage plan last fall, Hasroun felt blindsided, arguing the plan would force him to increase his prices by at least 30%. "I was there for the entire campaign. He used my space. He didn't even come to us and say, 'Hey guys, what do you guys think?'" said Hasroun, who is president of the Atwater Village Chamber of Commerce.

Hasroun said that after Garcetti proposed his minimum wage increase, he and Lopez, the auto shop owner, asked for meetings with mayoral aides to discuss the plan. Garcetti aides repeatedly set up meetings, he said, only to cancel later on. About the same time, a representative from the neighboring city of Glendale showed up with a gift basket containing a T-shirt, wine glass, hat, coaster and a note asking Hasroun if he would take a meeting.

The representative and several other Glendale officials met with Hasroun personally. "She said, 'We would love to have you in the City of Glendale, since the minimum wage increase is going to have a dramatic impact,'" he said.

Millman, Garcetti's press spokesman, said Hasroun and Lopez were invited to one meeting with the mayor last year but declined because of work conflicts. Another meeting set up by the office, Millman said, was canceled by Lopez, who wanted an additional Garcetti staffer to attend.

On Thursday, after The Times asked the mayor's office about Hasroun's complaints, Garcetti aides called the businessman and offered a meeting. "We look forward to continuing our discussion," Millman said.

Hasroun, however, said he no longer plans to vote for Garcetti. And he believes the mayor's staffers only called him because he discussed his frustrations with The Times. "I told them, 'This outreach should have been done a while back,'" he said.

Twitter: @DavidZahniser

Copyright © 2016, Los Angeles Times

UPDATES

7:03 a.m.: This story has been updated with information on when the L.A. City Council is expected to vote on Garcetti's minimum wage proposal.

This story originally published at 4 a.m.

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