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Sunday, March 20, 2011

Private business clubs, downtown L.A.: Downtown L.A.'s private business clubs are becoming less clubby -Los Angeles-Platinum Triangle-Beverly Hills Real Estate-Bel Air-Holmby Hills-Sunset Strip-Hollywood Hills-Luxury Estates-Mansions-Celebrity Homes-Homes

Downtown L.A.'s private business clubs are becoming less clubby

The California Club and the Jonathan Club were once the stamping grounds of the men who ran Los Angeles. Now they and other private business clubs are struggling to adjust to a changing economy and the changing face of the city.

"I can't imagine a major business in downtown Los Angeles that would not have members in the California Club," said Jim Thomas, president and chief executive of Thomas Properties Group, who is a member of the California Club and a founder of the City Club.

But times have changed since the days when someone coined an adage that club members still like to quote: "The people who run Los Angeles belong to the Jonathan Club. The people who own Los Angeles belong to the California Club."

Former Mayor Richard J. Riordan, a longtime member of the California Club, said he remembers the days when members of the Chandler family, who owned The Times, roamed the halls, and it took a knockdown fight to get Harold Brown, the Jewish president of the California Institute of Technology, admitted in the late 1970s.

"The California Club, when I joined it in the early '60s, it represented essentially all the old-time leaders of Los Angeles," Riordan said. "As the new generations came on, it wasn't that important for them to be part of the club."

Many of Los Angeles' major businesses are no longer downtown. The power base of the city has dispersed and the city's leadership has diversified — and not everyone has forgotten the legacy of discrimination at the California and Jonathan clubs, which didn't admit women and African Americans until the 1980s.

And by virtue of their location, the downtown clubs have made limited headway with the Westside entertainment industry crowd — although the Jonathan Club's beach facility in Santa Monica draws some of the Hollywood set. The Athletic Club owns the California Yacht Club in Marina del Rey.

And even healthy private clubs have been challenged by the effects of the economic downturn, which hit their core constituency of business executives particularly hard.

Initiation fees for the downtown Los Angeles clubs range from a $500 standard membership at the Los Angeles Athletic Club to a reported $30,000 for full access to the Jonathan Club's downtown and beach facilities for those who can make it through the intensive screening process to join. On top of that, there are membership dues as high as several hundred dollars a month.

With the subprime mortgage crisis of 2007 and financial market crash of 2008, even the rich cut luxury items from their budgets. And companies concerned about their public image avoided renting out club rooms for the lavish functions they might have held in the past.

The California Club reported a net loss of nearly $1.4 million for 2009 on its most recent annual financial statement (the nonprofit social club's statements to the IRS are public), after smaller losses in the two previous years.

Club spokesman Clifford Miller, managing director of Shamrock Holdings Inc., the investment firm founded by the late Roy E. Disney, attributed the 2009 deficit to an economy-driven decline in major events hosted at the club. After a strong Christmas season, he said, the club was back to fiscal health in 2010.

The Jonathan Club's income exceeded expenses through 2010, based on its financial statements. But it saw a $3-million drop in revenue from 2009 to 2010 and had to cut management staff to balance the loss, General Manager Matthew Allnatt said.

The City Club lost 15% of its membership in 2008 and 2009, according to General Manager Larry Ahlquist. The privately held club, owned by Texas-based ClubCorp, does not release its financials. The Los Angeles Athletic Club, locally owned by the Hathaway family, which also owns a chain of self-storage facilities called Storage West, also does not disclose its revenue and income.

The clubs may not be the center of civic and political gravity they once were. But at least some people don't think they're going anywhere.

Dan Rosenfeld, a senior aide to Los Angeles County Supervisor Mark Ridley-Thomas, said he likes to take refuge in the California Club between meetings, sink into an armchair in a quiet room, close his eyes and think, or not think. He likes the legacy embedded in the club's walls.

"I admire its history and its presence. It's a thread that runs through the history of Los Angeles, and many of our threads are imperfect," he said. "These clubs will change and adapt, and I think these clubs will continue."

abby.sewell@latimes.com

Copyright © 2011, Los Angeles Times

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