LIVING WAGE MAY BE DEATH OF RESTAURANT, WORKERS' JOB.

Byline: Brent Hopkins Staff Writer

VAN NUYS - To the chagrin of the owner, staff and customers, Billingsley's Restaurant at the Van Nuys Golf Course faces extinction because of the city's living-wage ordinance.

For 33 years, Drew Billingsley's steakhouse has become a San Fernando Valley landmark - known for its classic food, low prices and faithful clientele.

But now, as the golf course's operators are in the process of signing their first lease with the city since the living-wage law was enacted in 1997, Billingsley said he faces paying $100,000 a year more in wages and related costs, leaving his restaurant at a competitive disadvantage with other local eateries that aren't bound by the law.

``It makes our minimum wage $3 more than every other local restaurant,'' he said. ``We can't compete with them any more.''

Passed by the City Council in late 1996, the ordinance sets a premium above California's $6.75 minimum wage. The latest wage increase, beginning July 1, will require all businesses that contract with, lease land from, or receive city aid to pay employees at least $9.52 hourly.

Since his restaurant sits on city property, Billingsley figures he'll have to pay an additional $100,000 each year in wages, insurance and other fees to cover his eight waitresses, two busboys and dishwasher. If he signs the lease, which would bind him to the ordinance, he says the added costs would drive him out of business.

``I can't pay those wages,'' he said. ``This operation doesn't pay that kind of money. I've worked all my life to get in the position I'm in now, and it's all going away.''

Regular customers, who favor the dark dining room's friendly waitresses and neighborhood feel, expressed outrage at the possibility Billingsley's will close.

``They've been hit over the head with these new regulations that the city's trying to load on everybody,'' said Roger Oeland, a 20-year customer.

Billingsley prides himself on treating his employees well and offers as proof the fact that his cooks have worked for him for 20 years and other employees have many years of service as well.

``I'm not a philanthropist who's trying to give everything away,'' he said. ``But when I come to work, I feel like I'm here with my friends.''

Billingsley could soon be firing these friends, though. He's already trimmed the staff as tightly as possible, so he says his only option is to close down.

The ordinance was conceived to allow low-wage workers to provide for their families, and its mandatory wage has steadily increased since it went into effect in 1997, when workers received $8.50 per hour. Tied to the Consumer Price Index set by the federal Department of Labor, the increases are capped at 3 percent each year. Though unpopular in the business community, the practice has gained acceptance, according to June Gibson, chief of the contractor enforcement section of the City Administrative Officer's Office.

``There was a lot of controversy at the time because businesses were afraid of how it would affect them,'' Gibson said. ``But as time has gone on, it's become very common for contractors to accept this. If you're going to do business with a public agency, this is a price you have to pay.''

Exemptions can be made for some firms, she said, but they must gross under $350,000 a year or retain fewer than seven employees. Billingsley's meets neither requirement, but lobbied Councilman Dennis Zine's office to win shelter.

``Our office offered them support, but they don't meet the exemptions,'' said Martha Waltz, Zine's director of communications. ``They were given a ton of options to try to find a way to deal with the ordinance once the Van Nuys Golf Course signs the lease ... Our office did everything humanly possible, but they just don't meet any of the exemptions. This is unfortunate.''

Madeline Janis-Aparicio, executive director of the Los Angeles Alliance for a New Economy, a nonprofit advocacy group that fought to establish the ordinance, defends the law.

``There's something to be said for providing good jobs with good benefits if they're working on city property,'' Janis-Aparicio said. ``A lot of businesses said that (they would be hurt) when living wage was first being debated. But tons of businesses didn't close down. Bidding on city contracts is more vigorous than ever.''

With an operation like Billingsley's, which caters to a senior crowd with its big band music and low prices, there's not a lot of leeway. Andy Harris, who produces ``The Restaurant Show'' for KABC-AM (790), said the restaurant's low profit margins don't allow it to absorb the increase, nor can it afford to alienate customers by bumping up prices.

``The last thing they can do is raise prices without cannibalizing their business base,'' Harris said. ``There will be intense price resistance, so Drew is caught in a very sticky situation. He can't recover his costs because his customers know the menu prices so well.''

Currently, a lunch special runs $6.95 and dinners sell for $12.95. If wages go up, Billingsley says, he'll have to raise prices to $7.95 and $15.95, respectively.

``I don't even want to think about that,'' he said. ``It would be a completely different business. ... If I did that, we'd lose all our customers. When you're on a fixed income, you can't be loyal to anyone but yourself. Even the really loyal customers who come three times a week could only come once.''

For their part, Billingsley's employees say they do not want the increase. With waitresses making upward of $100 a day in tips, they claim to already make above the living wage, something the wage ordinance does not consider.

Peggy Stasiefsky, a former waitress who worked her way up to manage the restaurant, wishes the city would stop trying to intervene on her behalf. While she supports the ordinance for other industries, she'd rather not have to search for a new job if Billingsley's closes.

``Who are they helping here?'' she wondered. ``Shutting down a business that's been open here for 33 years and putting people out of a job, that doesn't help anyone.''

CAPTION(S):

photo

Photo:

(color) Drew Billingsley says if he has to pay his restaurant workers more, he'll probably have to close.

John Lazar/Staff Photographer