The financially troubled Sunset Strip Music Festival (SSMF) apparently is trying to sell the annual event to an outside company that would assume its $1.3 million in debt.
Such a sale would enable the SSMF to avoid filing for bankruptcy and remove the associated financial risk from the Sunset Strip Business Association, which owns the SSMF.
The effort to sell the event is mentioned in a report to the West Hollywood City Council, which on Monday will conduct a public hearing on proposals for continuing the Sunset Strip business improvement district. The business improvement district, which levies fees on businesses in the area to cover the cost of security, cleaning and marketing and promotion services, operates under the Sunset Strip Business Association (SSBA) name.
The report outlines discussions city staff members have had with members of the SSBA who have complained about its management and the negative impact of the music festival on their businesses. In a letter to City Manager Paul Arevalo, a group of SSBA members whose businesses account for 38 percent of the revenue generated by the mandatory membership fees said the music festival hurts their businesses. The members signing the letter include such major businesses as the Andaz, Grafton, Mondrian and Sunset Marquis hotels; bars and nightclubs such as Bootsy Bellows, the Den, the Pearl, Rock and Reilly’s and the Viper Room; restaurants such as Pink Taco and Rivabella, and Innovation Dining Group, which owns restaurants such as Katana and BOA Steakhouse.
“SSMF not only does not benefit many of us, it actually hurts most of us financially,” the letter from Innovation’s Lee Maen said. “Over that weekend, the people it draws to the event do not come to the neighboring businesses, and the traffic and street closures keep the locals away.”
The music festival began in 2008 as a celebration of Sunset Boulevard’s role in rock music history. Its financial problems led the West Hollywood City Council to consider putting last year’s festival on hiatus. Instead the Council agreed to an SSBA proposal to move it from August to September, when hotel room occupancy traditionally is lower and the event had a better chance of helping boost business.
Recent discussions with SSBA members have led the city’s Arts and Economic Development division to recommend that the 2015 festival be conducted solely inside participating nightclubs, bars and restaurants. That means Sunset Boulevard would not be closed to traffic for the event. The division also is recommending an independent audit of the SSBA’s finances and has contracted with a firm to study the financial impact of the music festival and other events. Some members of the SSBA have expressed concerns about how it uses the funds its members are required to pay. They also have objected that its advisory board includes members whose businesses do not pay such dues.
According to the division’s notes of its meeting, the SSBA’s advisory board also is recommending that the annual Sunset Strip Market not be continued this year. That event, which launched in 2012 with a focus on locally grown food has shifted its focus to craft beer and entertainment acts such as “drag bingo.” “The event is considered competition with existing food and alcohol establishments and does not drive traffic into businesses on The Sunset Strip,” said the Arts and Economic Development division’s memo.
If SSBA members who account for 50 percent or more of its annual assessments decline to participate, the City Council will be required to end the business improvement district. The Council will hold a hearing on the matter at its meeting at 6;30 p.m. on Monday at the Council Chambers, 625 N. San Vicente Blvd. south of Santa Monica.