Merchants, City Differ on Subway Aid Funds

Local merchants and Los Angeles city officials are at odds over how to spend $2 million set aside to help the businesses weather subway construction work on Lankershim Boulevard.

A group of merchants has submitted a written proposal that 80% of the money--$1.6 million--be used for direct payments to the merchants to offset costs of staying in business during the construction project. An additional 10% would be held for future marketing and advertising campaigns and the rest would be for administrative overhead.

“The proposed plan establishes an equitable, rational and easily verifiable basis for distributing the fund,” says the written proposal, drafted by consultant Allen Golden.

Chief legislative analyst Ron Deaton said the proposal--which would allocate money based on a formula including rent levels, hours of operation and years in business--is too complicated and burdensome for the city to oversee.

“I told them I thought it would be difficult to administrate that kind of program,” Deaton said, adding that he is open to continuing talks.

Instead, Deaton proposed that most of the money go to hire an advertising or marketing company to promote shopping in North Hollywood.

Talks between the merchants and city officials are scheduled to resume next month, but merchants said they are not happy with Deaton’s initial proposal.

“That’s not the answer,” said Guy Weddington McCreary, transportation chairman for the North Hollywood Chamber of Commerce. “These people have been hurt financially and they need help, even if it is just a little bit.”

Golden was hired by Metro Ford, which he said has lost millions of dollars since the Metropolitan Transportation Authority began tearing up and closing parts of Lankershim Boulevard four years ago.

About 80 businesses have been hurt by the construction work, which completely closed one stretch of Lankershim for five weekends in October and November.

The MTA budgeted $300,000 a year for advertising and other merchant assistance, but business owners said the amount was insufficient to begin to cover revenue lost as customers shied away from the construction zone.

In response to merchants’ complaints, the Los Angeles City Council voted Nov. 6 to set aside $2 million of its contribution to the MTA to instead be used to help merchants whose business has suffered because of construction work.

City Councilman Joel Wachs, whose district includes part of North Hollywood, said he is leaning toward using the money to launch a large campaign to promote North Hollywood businesses, because it would be less complicated than direct payments. But he said he is open to considering the merchants’ proposals and will wait for Deaton’s final report before making a final decision.