City council discusses options for commercial rent moratorium

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The city council of Culver City extended the commercial tenant eviction moratorium until March 31 after significant deliberation.

The moratorium, which has been in effect since the city’s first Coronavirus Public Order on March 20, was set to expire Jan. 31, 2021.

The discussion started with a generally favorable summary of the current climate with the ordinance in place, with many commercial tenants coming to an agreement without the city’s influence. There were only nine incidents in which the city had to intervene to protect a tenant from eviction, according to the staff’s report on the topic.

As the pandemic continues to extend, the concern that many businesses will be unable to survive after the moratorium because of astronomically high bubble payments that would be required after the pandemic ends and the moratorium is lifted.

One of the speakers on the topic admitted that his business, which focuses on a niche sector of film post production, is facing a five figure bubble payment of past rent due COVID.

This concern was echoed by councilmembers, who emphasized the importance of maintaining the unique, community feel that Culver City exudes with it’s diversity of small businesses.

Councilman Thomas Small spoke to this point, saying that the city needs to be sure that policies are adopted because they fit Culver City. He also praised the city’s Economic Task Force, who had deliberated possible additions to the moratorium in order to facilitate payments now to reduce balloon payments, and was eager to try anything that they had suggested.

However, they also agreed that while the situation is unforgiving for all involved, there needed to be regard paid to the concerns of landlords as well. 

“If 80% of my building said ‘I can’t pay rent, it would probably be on the market the next month,’” councilman Daniel Lee stated in his comments on the issue.

The Economic Task Force was unable to come up with a consensus policy idea, but echoed Small’s sentiments that whatever is implemented should be tailored specifically to Culver City.

One of the more prominent ideas discussed was the idea of a potential tiered pay structure based on size, expected revenue, and other factors. There was pushback to this proposal though, as some members of the council felt that such a structure would be too complicated and unfeasible to enforce.

Councilwoman Meghan Sahli-Wells, who’s next meeting on the city council will be her last as a councilmember, agreed with this notion, and proposed that such a tiered payment structure should be narrowed down to fixed costs.

Sahli-Wells also brought up another important topic: the potential for mediation. City staff called third party mediation “a warm goodbye” in many cases, showing some businesses that their situation simply won’t work out in the long term and enabling them to work on a transition.

Vice Mayor Alex Fisch was a bit more reserved on the topic, saying that he believed the topic was far too complex and nuanced for a particular decision to be made that night. Fisch too was very much focused on maintaining some of the unique small businesses that make Culver City special.

Mayor Eriksson was in agreement with Fisch on his earlier point, saying that this discussion was more to give staff something to return to for the next council in January. He showed optimism that landlords and tenants have been able to work things out using the moratorium policies as a framework, and believes the overall goal of tinkering with the ordinance was to encourage such agreements. While Eriksson also attested that he believed a tiered system was too complicated, Lee argued that the policy that Eriksson is looking for based on his stated views on the topic is aligned with a tiered system.

Lee brought up a whole new point entirely that, while not discussed in great detail, serves an important role in the discussion. Lee believed that the process between an initial disagreement and mediation was not sufficient, and argued that “You have to come to an understanding you don’t agree before mediation is needed.” Lee continued by saying there would be an extensive process before mediation would actually be carried out if it were up to him.

While there were no concrete decisions made outside of the extension of the moratorium, both the council and the city staff were content with the pace at which the process was moving, and hope to discuss more concrete ideas when the topic is brought back to the new-look council next year.