Seattle Sun Newspaper - Vol. 8, Issue 3, March 2004

Copyright 2004 Seattle Sun. Please feel free to use the article below in your research. Be sure to cite the Seattle Sun as your source.

Price of doing business in Seattle takes toll

on University Plaza Hotel

(Editor's note: The following is an exerpt from an open letter by Armen Yousoufian, Managing General Partner, University Plaza Hotel dated 12/23/03 which explains why he closed the University Plaza Hotel. The letter was posted on an individual's Libertarian party website where she thanked him for hosting their party meetings at the hotel. Fellow business owners will be able to relate to his complaints of our City's tax system.)

Shuttered: University Plaza Hotel full-service restaurant,

cocktail lounge, and beer, wine, and liquor service are history.

After being subjected to numerous and outrageous minimum wage, government fee, and payroll tax increases since 9/11, not to mention increased regulations, etc. - all while hotel occupancy and food and beverage revenue were decimated - I have closed my hotel's restaurant and cocktail lounge operation as we knew it.

The lounge was the only room we were serving dinner in, since months ago. I had previously stopped serving lunch and dinner in the restaurant dining room, having limited that outlet to only breakfast. Lunch business had practically disappeared, and dinner had become too slow to support having staff in two rooms.

In comparison, when I bought the University Plaza Hotel in 1986 from the U.S. Bankruptcy Court, we enjoyed a robust breakfast and lunch business, in spite of only mediocre food and service (by my standards). Over the years, despite improvements in food quality and service and increased advertising and creative marketing, business declined - a sign of the same trends that have caused most new "limited service" hotels to leave restaurants out of their design altogether.

Approximately 10 jobs have been eliminated in the process of taking the above steps.

As for the economic pain and insults imposed on my operation by local government, there follows below a partial list of what I have endured:

1. 47% to 49.6% increase in unemployment insurance payroll tax, effective January 1, 2003, following a 30% increase in the same tax only a year ago.

2. 10% increase in Labor and Industries payroll tax, effective January 1, 2003, following a 30% increase in the same tax only a year ago.

3. 25% increase in the Seattle-King County Board of Health annual food permit license fee.

4. 58% increase in (commercial) electricity rates in Seattle in the past two years.

5. 50% increase in the past year for the Seattle Building Department's permit for the boiler that produces the hot water to wash dishes.

6. 25% increase in the past year for the Seattle Building Department's permits for the elevators our guests ride to get to our restaurant.

7. 25% increase in the past year for the Seattle Building Department's permit for the sign advertising the restaurant to passers-by.

8. A further miscellany of minimum wage increases, water and sewer rate increases, assorted new regulatory reporting requirements, etc.

It is disheartening to simultaneously watch local bureaucrats, who have driven many small businesses to the point of desperation with fee increases, going to great lengths to encourage development in South Lake Union by changing new building height restrictions and potentially spending hundreds of millions of dollars on new infrastructure. Over the next 20 years, these bureaucrats claim, some 20,000 jobs may be created. In the meantime, a few million dollars of extra fees are driving small businesses out of business, or out of Seattle. And, some 96,000 local jobs have been lost in the past three years, a number that continues to grow with new announcements weekly.

* * *

The University Plaza Hotel is located at 400 NE 45th Street in Wallingford.