Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Business Impact topic
No spam. Unsubscribe anytime.
Local businesses warn Manhattan Beach tax changes could hit landlords and small tenants
Summary
At a city forum on business‑license reform, several business owners warned that proposed models—especially those eliminating the commercial sales‑tax credit—could raise commercial‑property taxes and be passed to tenants; staff and the HDL consultant acknowledged pass‑through risk and said it arises from private lease terms.
Business owners at a Manhattan Beach forum raised repeated concerns that the consultant’s proposed business-license models could shift significant costs onto landlords and, through leases, onto small tenants.
Several attendees pointed to HDL’s examples showing sizable increases for commercial property under Models 2–4 and warned landlords would likely pass higher landlord costs to tenants. Don Ziss summarized the concern: "the landlord is going to end up paying a BLT, too. And that also gets spread out to those tenants..." The consultant and city staff responded that pass‑through is governed by private lease arrangements and that exempting landlords entirely could create other inequities in the tax base.
Small-business owners asked how much of any increase would be absorbed by landlords versus passed along. Tony Nero said substantial landlord increases could "drive more businesses out of Manhattan Beach" if owners raise rents. Staff acknowledged the concern and said the forum was the start of a broader outreach and modeling process; they committed to sharing the slides and recording, to performing community polling in May–June and to providing the council with more detailed impact analysis.
Business commenters also pressed for revenue‑neutral options and requested clearer data on who would be affected by each model. As one Zoom participant said, "At a minimum, this should be a revenue neutral change. Not a revenue grab." The city emphasized that Model 4 was presented as the most revenue‑neutral of the four HDL scenarios and that the study’s numbers are illustrative estimates based on applying options to the most recently completed year of reported activity.
Staff and HDL suggested steps to reduce harm to small businesses, such as lowering the flat fee that applies to microenterprises (several models lower the flat tax from current levels to $100 covering the first $100,000 in receipts) and considering targeted exemptions or phased approaches. No formal policy changes were adopted at the forum; staff will present study results and forum feedback to City Council on May 12 and pursue statistically valid community polling in May–June before any ballot placement.
