Arcade Owners Complain Fees Are Unfair

Owners of video arcades in Glendale are complaining that high license fees charged by the city are discriminatory and are forcing operators out of business at a time when the popularity of the arcades has waned.

Norman R. Jones, who owns two of the eight arcades in the city, said the $50-per-machine fee far exceeds fees charged other businesses in Glendale and is much higher than what neighboring cities levy against arcades. A dance hall, for example, pays $150 a year. But Jones must pay the city $2,750 for each of his arcades.

Jones said the popularity of video arcades has dropped dramatically since the stiff fees were set by the city in 1982. The January issue of Play Meter, a trade publication, reported a 90% decrease in the average weekly income of arcades nationwide since last March.

City Manager to Report

Jones said he must sell most of his game machines because he cannot afford to pay the license fees.

The Glendale City Council is awaiting a report on arcade license fees from City Manager James M. Rez.

When Glendale city officials adopted a video arcade ordinance in 1982, they imposed a fee schedule higher than many nearby cities. Operators pay $150 for an annual police check of each arcade in addition to $50 per machine.

In contrast, the city of Burbank charges established arcades a fee of $50 per year, regardless of the number of machines. The city of Los Angeles just raised its fees to $20.16 per machine from a previous charge of $1.25 per $1,000 gross income. In Pasadena, operators may opt to pay $38.47 per machine or $38.47 for the first $5,000 in gross income plus $1.92 per additional $1,000 income. A spokesman for Pasadena said most arcade operators choose to pay the tax on income.

‘We Cannot Survive’

Jones last week asked Glendale to lower arcade fees and requested that the Feb. 10 deadline for paying the fees be extended. However, City Atty. Frank Manzano said was too late to change the city’s ordinance, because a new ordinance cannot be adopted for 30 days.

“Glendale is supposed to be the bulwark of free enterprise,” Jones said. “But this is unfair and unjust taxation. We cannot survive.”

Jones said his gross income has dropped 60% and his net profits are down by 90% since he bought the Enterprise arcades in May, 1982.

City officials said the 509 video machines in the city are only about half of the number that existed when the ordinance went into effect.

The ordinance was adopted after a yearlong moratorium was placed on the mushrooming growth of arcades throughout the city in 1981. When the ordinance was adopted, many operators complained that restrictions and curfews on when youngsters are permitted to play, as well as high license fees, would hurt their businesses.

Glut of Games Cited

Sid Lefebvie, manager of Game Doc of Burbank, one of the oldest video game repair service firms in the area, said at least half of the arcades that sprang into business four and five years ago have now disappeared. He attributed the loss in popularity to a glut of new games that came on the market in 1982 and the emergence of low-cost home machines.

Jones has asked the city to lower the arcade license fee to a flat $150, the same amount paid by a bar that offers dancing. “We don’t require any more services from the city than a dance hall,” Jones said. “We don’t require any more police or fire service, and the annual investigation costs are the same. It isn’t right that we should be paying more.”

There are 89 establishments in Glendale that have game machines, and any business with more than four machines is deemed by the city to be an arcade.