A tax on golf courses? L.A. voters could decide this November

Los Angeles City Councilmember Adrin Nazarian is proposing a new tax on nonprofit membership clubs such as private golf courses, saying it could raise up to $250 million a year for city services and capital improvement projects.

The proposed parcel tax of $4 per square foot would require voter approval. Nazarian plans to introduce a motion to the City Council Friday to initiate steps to put a parcel tax measure on the Nov. 3 ballot.

The measure would target large, private recreational membership-based clubs and similar facilities within city limits. If the council approves Nazarian’s motion, it would next head to the city attorney’s office to prepare a resolution and ordinance to get it on the ballot.

The funds generated could be used for capital improvements, such as curb cuts, fixing potholes and sidewalks, and repaving damaged alleys and streets; supporting the film and television industry in the city with a tax credit and permit fee relief; and a program that offers financial assistance for first-time homeowners in L.A, according to a copy of Nazarian’s motion viewed by The Times.

“Such a framework could provide a meaningful and ongoing revenue stream to support critical investments, including affordable housing production and preservation, homelessness response, infrastructure improvements, economic development initiatives, including support for the film and entertainment industry, and programs that expand pathways to homeownership for Angelenos,” the motion states.

Nazarian said in an interview Friday that the measure addresses a longstanding inequity of private nonprofit country clubs not paying what he called their fair share of property taxes. He said the measure would affect six country clubs that pay a combined $811,000 a year in property taxes and cover about 1,000 acres that are valued at more than $15 billion. None are in his district.

“Some of these properties, resorts and country clubs are sitting on some of the most expensive real estate,” Nazarian said. “You can’t continue doing things the way you did 40 years ago. You need to figure out what you need to do today to meet the needs of today and tomorrow.”

According to an aide, Nazarian drew inspiration for the measure after listening to a podcast from author Malcolm Gladwell that questioned why private country clubs, which are closed to the public, manage to pay so little in property taxes.

Under Proposition 13, adopted in 1978, annual property tax hikes are limited and can’t be reassessed to market value unless the property is sold, meaning that private golf courses and other properties that rarely change hands benefit from relatively low property taxes.

Efforts to challenge Proposition 13 have occurred over the years. The Howard Jarvis Taxpayers Assn., named after the measure’s co-author, has long opposed tax increases and defended the proposition.

“Los Angeles residents can judge for themselves whether the city is responsibly spending the money they already pay in taxes,” the association said in a statement. “If the revenue from this proposed $4 per square foot parcel tax goes into the general fund, there is no legal obligation for the city to spend it on the advertised purposes, it can be spent on anything.”

Golf course manager Rick Stegall said he thinks the proposal will hurt the local golf business, although the course where he works is for-profit and wouldn’t be affected by the proposed tax.

“They’re going to kill the industry,” said Stegall, who emphasized that he was speaking as an individual and not as general manager of the Woodland Hills Country Club. “This is one more straw that is going to break the camel’s back.”

Nazarian said he expects pushback, particularly from those who have long benefited from Proposition 13.

“There’s always going to be pushback because if you’re comfortable receiving the benefits that you’ve been receiving for the past multiple generations, why are you going to want to let go of that benefit?” he said. “I would like the public opinion to weigh in on this and say whether this is the right thing to do.”