When the Pacific Beach Shore Club registered for its business license, it told the city of San Diego it had three employees.

The booming bar and restaurant, just steps from the beach, actually has 70.

With two full bars, 21 televisions, and wild midweek goldfish races, the Shore Club may employ just three janitors to clean up afterward. There is no mistaking that this is a large beach ensemble, with plans to expand.

By underreporting the number of employees on its business tax certificate, the Shore Club saved $441 a year.

The beach area’s business improvement district, Discover Pacific Beach, also assesses local businesses based partly on employee counts. The improvement district is currently more than $20,000 in the red, making the annual $90 the Shore Club shortchanged it a sweet, if small, stash of cash.


We Stand Up For You. Will You Stand Up For Us?

The figure might be pocket change for most businesses but it puts owner Doug Sondomowicz in a tough spot.

He sits on the board of Discover Pacific Beach, and is specifically tasked with bringing about an increase in the economic well-being of residents, employees and businesses.

Last month we wrote about problems in the Discover Pacific Beach organization uncovered by a city audit, including the underreporting of employees in a number of local businesses.

Now, we’ve received the list of 23 businesses. Current and former board members’ businesses accounted for more than half of the six-fold increase in employees discovered by the audit.

Sondomowicz isn’t alone. The board’s president, Eric Lingenfelder, oversees Tavern by the Beach and Brewley’s Pint, which reported a total of 20 employees but actually have 69. Todd Brown’s Bub’s Dive Bar reported four but actually has 50; he’s the board’s former vice president.

In essence, by understating their employee counts, the three board members shorted the city out of business tax fees (a total of $1,133), and their own business improvement district out of assessments designed to help improve conditions in the district (a total of $450).

The total sums aren’t large, but they show how, up until last year, employee counts were entirely dependent on the honor system.

There are two ways in which underreporting of employees are detrimental to the city’s finances and to the improvement districts themselves.

Businesses pay fees to the city based on their employee counts. Small businesses with 12 employees or fewer pay a small flat rate of $34, while those with 13 or more pay a $125 flat fee plus an additional $5 per employee. Any employee working less than 10 hours weekly is not counted.

Businesses in improvement districts also assess themselves based partly on employee counts. The city auditor’s investigation, which was sparked by a whistleblower complaint, only looked into 23 of the more than 1,200 businesses included within Pacific Beach’s improvement district.

Bars by the beach are big business.

It’s no small feat getting small business owners to talk on the record in Pacific Beach.

Lingenfelder, Sondomowicz and Brown all didn’t respond to numerous attempts for comment.

Within the district, there’s a rift between alcohol and entertainment-related businesses and small businesses and residents who claim the community is struggling with high crime rates due to drunken fights and residential burglaries. Some business owners complain that bars and restaurants run the business district.

Discover Pacific Beach Executive Director Sara Berns says small businesses like retail don’t have the time, or the people resources to get involved in the improvement district. They’re in the thick of running their businesses daily and don’t have many employees to designate as representatives for community involvement.

This results in an abundance of representation in Discover Pacific Beach by bars, restaurants and resorts.

Crystal Pier Hotel owner Bill Allen says he’s simply too old now to deal with the absurdity going on in the improvement district, but he was willing to go on the record.

Allen, whose family has owned the hotel for half a century, says Pacific Beach has been going downhill for the past 10 years. He blames neighborhood bars, especially Shore Club, which is a block away from his hotel. Allen says bars in the area make enormous amounts of money by over-serving alcohol to patrons. Rowdy and inebriated, beachgoers have even caused Allen to have to comp rooms in his hotel because of guest complaints.

“They have no respect for the citizens in this community,” Allen said. “They’re the kind of people you just want to hit ‘delete’ and have them out of your life.”

Sandy Coronilla reports on local government and education for voiceofsandiego.org. She is on the Armen E. Keteyian Scholarship for Investigative Reporting. You can contact her directly at sandy.coronilla@voiceofsandiego.org or 619.325.0528.

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    This article relates to: Economy, Government, News

    Written by Sandy Coronilla

    19 comments
    Jerry Hall
    Jerry Hall subscriber

    Is this more an issue of getting a hand caught in a cookie jar or a legitimate 'mistake'?

    pbSpiritsDOTcom
    pbSpiritsDOTcom

    Is this more an issue of getting a hand caught in a cookie jar or a legitimate 'mistake'?

    Don Leichtling
    Don Leichtling subscriber

    Correct me if I am wrong, but aren't these million+ dollar business?

    Don
    Don

    Correct me if I am wrong, but aren't these million+ dollar business?

    doug sondomowicz
    doug sondomowicz subscriber

    If Sandy would have done any research on these three guys she would have discovered that these three current and past board members have donated more money to the BID and Community of PB then any other small business in PB over the past five years. We are talking alot of money, why would they donate so much to the community and BID and purposely cheat a couple hundred bucks a year?????? This is a witch hunt puhed by a small group of anti-alcohol activists.

    DRS
    DRS

    If Sandy would have done any research on these three guys she would have discovered that these three current and past board members have donated more money to the BID and Community of PB then any other small business in PB over the past five years. We are talking alot of money, why would they donate so much to the community and BID and purposely cheat a couple hundred bucks a year?????? This is a witch hunt puhed by a small group of anti-alcohol activists.

    Don Leichtling
    Don Leichtling subscriber

    If these same business owners had patrons stiff them for their bills, you can be sure they would be screaming bloody murder for "Justice"...

    Don
    Don

    If these same business owners had patrons stiff them for their bills, you can be sure they would be screaming bloody murder for "Justice"...

    Sandy Coronilla
    Sandy Coronilla subscriber

    Hope this helps further the discussion. Love reading everyone's comments.

    sandycoronilla
    sandycoronilla

    Hope this helps further the discussion. Love reading everyone's comments.

    Jim Jones
    Jim Jones subscriber

    I can't blame the bar owners, they probably learned to count in a local public school.

    Jim Jones
    Jim Jones

    I can't blame the bar owners, they probably learned to count in a local public school.

    Judith Swink
    Judith Swink subscriber

    I found myself wondering if these businesses also under-report number of employees for state business taxes like unemployment and disability, both paid per employee.

    LibraryLover
    LibraryLover

    I found myself wondering if these businesses also under-report number of employees for state business taxes like unemployment and disability, both paid per employee.

    Judith OBoyle
    Judith OBoyle subscriber

    Watch out...this kind of BS is coming to North Park. Hope that Voice covers next month's elections at the North Park Planning Committee

    Judi
    Judi

    Watch out...this kind of BS is coming to North Park. Hope that Voice covers next month's elections at the North Park Planning Committee

    Founder
    Founder

    Want to get informed, request a police late night drive-along and you will see what I mean; it is not a pretty picture.

    Simon Baer
    Simon Baer subscriber

    Yes, there are people on both sides of the issue that have drawn their lines in the sand (pun intended) but the rest of us are better served to come together. As a business that can't get a wine/beer license because of the (at times) reckless behavior by some of the bars, I am very frustrated with the situation too but I also acknowledge the positive impact they have in our community (read: recycling for education, bringing new customers to the area, contributing to the tax base) I think the vast majority of commercial business owners in PB want a safe, happy and supportive community and are willing to work with the community at-large to make that happen.

    greenergrass
    greenergrass

    Yes, there are people on both sides of the issue that have drawn their lines in the sand (pun intended) but the rest of us are better served to come together. As a business that can't get a wine/beer license because of the (at times) reckless behavior by some of the bars, I am very frustrated with the situation too but I also acknowledge the positive impact they have in our community (read: recycling for education, bringing new customers to the area, contributing to the tax base) I think the vast majority of commercial business owners in PB want a safe, happy and supportive community and are willing to work with the community at-large to make that happen.