A decision by city officials to raise permitting fees on sidewalk news racks may result in jeopardizing the ability of local publications to reach their audiences. 

One of those publications, among four still offering their products through news rack distribution, is this one, the Pasadena Weekly.

The audience, of course, is you, one among the paper’s nearly 27,000 audited readers picking up the free paper every Thursday at numerous convenient locations around the city.

Charging fees to place news racks on city streets is nothing new, although there are far fewer print publications out there now than in years past. Fees imposed for their installation on Pasadena sidewalks first went into effect in 1973, considered a “reasonable” part of doing business without abridging the First Amendment’s provisions guaranteeing freedom of the press.

That law, Pasadena Municipal Code 12.05, “dictates that news racks are only allowed in public sidewalk or parkway, without creating any dangerous condition or obstruction. It also includes installation standards and maintenance guidelines, permitting and insurance requirements, enforcement and violation procedures, as well as yearly removal along the Rose Parade route.”

What does not appear to be reasonable, it could be argued, is the amount of the fees now being charged, which in the case of Pasadena Weekly, the Pasadena Star-News, La Opinion and El Classificado, the latter two printed in Spanish with English translation offered on the online editions, would seem extreme to some.

In one of a number of fee categories — a permit for the rack itself — has increased by more than 617 percent in just one year, going from $12.54 per rack in 2019 to $90 per rack beginning last January. Under the previous General Fee Schedule, rack fees for this newspaper last year cost just more than $800. This year, the bill is nearly eight times that amount.

“Not being familiar with the total rationale used (for the increase), I can only say that in terms of fairness, an increase of more than 600 percent would be difficult to swallow in the best of times,” said Steve Strickbine, owner of Arizona-based Times Media Group, TMG, which on Aug. 1 announced that it had purchased PW and its various sister publications from Southland Publishing — one month after the new fees were adopted by the Pasadena City Council.

Responding to Complaints

By that time, Southland Publishing had sold its interest in PW and its sister publications for an undisclosed amount and had already paid its $12.54 per rack permit fee. The new fee would only go into effect on Jan. 1, 2020.

As Mayor Terry Tornek explained, city staff was criticized last year for allowing dilapidated, vacant and damaged news racks in the public right of way, especially in the city’s bustling business districts — Old Pasadena, the Playhouse District and the South Lake Avenue Business District.

“Public Works (which oversees management of news racks) submitted this memo to MSC (the council’s Municipal Services Committee), and staff provided an oral presentation on how we were going to resolve this ongoing problem on 3/26/19,” Tornek wrote in response to a request for comment on the new fee schedule. “We instituted new procedures which increased staff effort and time. Additionally, we adjusted our fees to recover actual time and materials which were being used.”

According to a Jan. 9, 2019 memo to the MSC, “a notice was sent to all known publishers who have facilities in the city of Pasadena. This annual notice outlines the permit and insurance requirements and associated fees. The notice indicated that any existing or proposed installations shall be permitted by February 22, 2019. On February 5, 2019, a second similar notice followed with an additional message that any unpermitted facilities will be summarily removed by the city starting March 2019. A third and final notice was sent on February 25, 2019.” That fee was paid by PW and today that sticker appears on all news racks.

Citing the same document referenced by Tornek, which was written by Public Works Director Ara Maloyan and presented to the MSC on March 26, 2019, Councilman Steve Madison, whose district includes Old Pasadena, home of the former offices of the Pasadena Weekly, said it was known that an increase was imminent.

“There was notification to all publishers and known permittees,” wrote Takako Suzuki, Madison’s field representative.

“The increase in fee was approved by the City Council, and adopted in the current General Fee Schedule as of July 1, 2019,” Tornek wrote, adding, “Fees cannot generate profit.”

Permit Expired

According to city spokeswoman Lisa Derderian,  “The last Permit #59444 was paid and issued to Southland Publishing –  Pasadena Weekly in February 2019.” The permit, Derderian wrote, was good through the year of 2019 and expired on December 31, 2019.”

According to Derderian, the city was not notified about the paper’s new ownership until after the new year, when the old racks were reinstalled, but had not been permitted by anyone with the paper.

“After the (Rose) Parade, (PW) news racks reappeared and occupied the public right of way, without a valid permit for 2020. This office has been notifying the responsible party to remove any unpermitted facilities before May 18, 2020; or apply and pay for a valid permit for any news racks that are to remain,” Derderian wrote.

As Yannie Wu-Bowman, principal engineer with the city’s Public Works Department, pointed out, “The increase is to defray actual staff costs for permit processing, coordination, monitoring, enforcements, and annual parade route clearing,” Wu-Bowman wrote. However, she did not note that PW racks, many of which are regularly maintained and are actually bolted into the cement, are removed and replaced by the publisher at a cost of $1,000, according to Hugo Castillo, co-owner of LA Print, which distributes PW.

“Multiple notices for permit renewal have been sent out to all past permittees since February 2020. … All current permittees are being charged a fee of $90 per rack,” Wu-Bowman wrote. “Permits charged with identical fee have been issued to three other publishers,” she wrote.

The number of racks used by all three of the other publications totals 20.

Castillo said he was not aware of the previous considerations of increasing rack permit fees, and acknowledged there was some “confusion” in the switchover in ownership. “We apologized, and we asked for an extension, but they said no,” Castillo said.

To that and possibly other similar requests by other vendors, Wu-Bowman wrote, “If there is financial hardship in obtaining permits for all news racks, please strategically reduce their number and focus in the more popular locations. Another cost effective alternative to maintain comparable readers exposure,” she said, “is to enhance online resources through your website. Both options conform with the city’s environmental friendly policy to reduce printing materials and carbon footprint.”

Kat Wang, director of circulation for Southern California News Group, to which the Star-News belongs, did not return calls for comment or an email regarding this story. Calls for comment from the other two publications were not returned.

Strickbine said both the paper and its readers will suffer if the number of racks are reduced due to the high cost of the permit.

Castillo said it appears the city is intent on getting rid of newspapers being sold and distributed for free on the streets, and points to Wu-Bowman’s letter as evidence.

“They want us out. They want to reduce their carbon footprint. They want to get rid of us,” Castillo said.

Don Margolin, who was director of distribution under Southland Publishing but now works with Castillo, said he was not properly notified of meetings in early 2019 regarding a change in the permit fee throughout early 2019, and did not receive any notice that the City Council was going to change the fee schedule for racks in July 2019, right before TMG took over.

“Like the way we get one for (removing racks before) the Rose Parade, we did not get a certified letter” about any hearings, Margolin said.

Margolin became well known among city government watchers for appearing before the Glendale City Council to speak against a proposed news rack fee hike there, from $43 to $241 per rack, in which the council relented, and even praised Margolin for his grit and determination.

In mid-2019, “They should have notified us (about the fee increase),” Margolin said of the PW rack fee hike. “They should have told us so we could go and put in our two cents.”

Not the Time

As far as Strickbine can determine, “This will have to result in some kind of reduction in the number of racks we’re able to keep on the streets.

“If it is an agreed-upon initiative by the council, I would accept it. However, I would think it to be fair to allow it to be phased in rather than done all at once. After all, the Pasadena Weekly has been and remains a vital community news resource for the voters in the area,” wrote Strickbine.

“This is certainly not the time to saddle a community news publication with a 600 percent fee increase. I would think under the circumstances that the council would consider tabling such an increase until after the hardship from COVID-19 passes.”