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Sunset Junction's Failed Mission

The so-called charity spent $12,000 on lobbyists. Needy kids got $500

The streets of Silver Lake were quiet last weekend. The bands slated to play at the annual Sunset Junction Festival performed at local venues or not at all. The street blockades that have generated hundreds of neighborhood complaints were absent. Local businesses had a quiet weekend, a return to normalcy after years of contention.

The festival's overhead dried up cash meant for youth programs.
PHOTO BY TED SOQUI
The festival's overhead dried up cash meant for youth programs.

When the Los Angeles Board of Public Works last Wednesday rejected the Sunset Junction Neighborhood Alliance's last-ditch effort to save the 31-year-old street fair, the vote marked what could be the final chapter for a homegrown event intended to promote camaraderie but that instead divided the community.

Organizers of the Sunset Junction Neighborhood Alliance say it is uncertain the group will survive. Its youth programs and local farmers market could be in limbo. Its finances are tenuous, raising questions about how an organization that generated hundreds of thousands of dollars and brought in nationally known music acts could be left with nothing.

"The community really wants spontaneity — the idea of spunk and creativity is prized," says Paul Michael Neuman, a 30-year Silver Lake resident and a representative on the Silver Lake Neighborhood Council, which has sparred with the Alliance in the past.

"But we don't need a youth program or a farmers market that justifies a festival where there's a reason not to trust the people running it."

The nonprofit Sunset Junction Neighborhood Alliance began as an exercise in trust. Founder Michael McKinley formed the organization in 1979 as a way to repair relations between gay and Latino residents after a series of violent assaults. Its first street fair, in 1980, was a low-budget endeavor staffed by gang members acting as peacekeepers.

The event became an annual fundraiser for the Alliance's youth projects and other nonprofit organizations, drawing more than 250,000 attendees just five years into its run. Co-sponsors included the Hollywood Sunset Community Clinic, RSVP Senior Center and Central City Action Committee.

But what began as a labor of love — McKinley told the L.A. Times in 2000 that he had all but given up his job as a hairstylist to oversee the youth programs — evolved into an event that made many Silver Lake residents uncomfortable. Sunset Junction's sponsors shifted from community groups to national corporations. Its entry fee skyrocketed from a nominal donation to $25. Its founder became a polarizing figure.

"One thing that was very, very troubling to me was constantly hearing that all this was done with cash," Renee Nahum, who's also on the Silver Lake Neighborhood Council and is married to Neuman, says of the festival fees. "The Neighborhood Council for many years asked them to open up their books and see what was going on ... but even if you're looking at the books, is this stuff going to show up?"

The tax records of all nonprofit groups are public. Filings obtained by the Weekly show that, despite the festival's success, its assets are meager. The Alliance frequently reports only several thousand dollars on hand at year's end. Bank records show the average daily balance of the account to which it made recent deposits was $963.

McKinley has earned either a modest salary or none at all, according to records. McKinley's attorneys from the well-known firm Sheppard Mullin Richter & Hampton last week warned Los Angeles officials that without the proceeds from the 2011 festival, the organization, which owes the city more than $250,000 in unpaid permit fees for last year's event, would be insolvent.

"Without the proceeds ... SJNA cannot afford to run the Sunset Junction Youth Program," the law firm wrote on Aug. 19 to the Board of Public Works. "If the SJNA is forced to cancel the 2011 festival at this late date, they will suffer hundreds of thousands of dollars of monetary damages, as well as a loss of goodwill and damage to reputation that may make it impossible to ever stage the festival again."

But last week's drama over the Alliance's sizable debt to the city, which the organization is contesting, is not what choked the Sunset Junction Festival of money and bled its youth programs. Records show that the Alliance's huge overhead, as compared to its revenue, dried up cash originally meant for youth programs.

Though the festival generated nearly $400,000 in 2009, the most recent year for which tax records have been filed, by the time organizers paid the musical acts, permits and other expenses, less than $500 was left for youth outreach. The year before, the festival just broke even, generating nothing for its youth-employment project at the now-closed Tsunami coffeehouse on Sunset Boulevard — or for its sports or school programs.

McKinley continues to promote the event as a "fundraiser" in statements and at meetings, but documents show the youth programs are funded with their own revenue, or from contributions unrelated to the festival. Tax filings for 2009, when the organization's revenue was $668,433, show that money spent on youth outreach was modest: about $14,037 for Tsunami coffeehouse, and $56,084 for other programs.

A document provided to the Weekly by City Councilman Eric Garcetti's office shows youth program expenditures from September 2005 to August 2006 were higher: $81,048 for the coffeehouse, and $72,520 for other Sunset Junction youth programs.

McKinley, through his attorney, declined to discuss the specifics of the organization's finances. He said he continues to be "committed to my original commitment to the community" and that the nonprofit group is "evaluating our next steps."

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18 comments
edwardon
edwardon

tell us favio what really went on?

favio
favio

I worked at Sunset Junction for years (more than a decade). There's no such thing as a "youth at risk program" anymore... Unfortunately S.J. turned into nothing more than a pro-profit business. I anybody is interested and want to know where the money really went and how it was really spent let me know.

Ran Fleming
Ran Fleming

The L.A. city council is desperate for cash. Michael can no longer pay his way through a back door channel that for anyone else would be a red tape-covered rope at the front door. To disrupt an entire community as well as a major metropolitan thoroughfare for so long (despite what he was doing originally; we all know good food goes bad when left alone in the dark) must have cost good money. So they cut him off, and now the people who could have stopped him years ago (hello, Tom, Gil and Eric) are suddenly acting as if they are working in the best interests of the community.

Ran Fleming
Ran Fleming

Michael has had more than a decade's worth of time to explain his side of the story, and only now is he begging for it to be heard.

In the late 1990s, when many neighbors asked about all manner of odd goings-on, Michael departed and left a no-nothing adjutant to act as if that poor sap might mollify the crowd. Phone calls went unanswered and never returned, and the questions continued to pile up. Many years and countless incidents of residents being treated like crap by the Sunset Junction staff, the trash, the missing funds, and too much more. Instead, Michael blew off people, acted as if he needn't answer to anyone, and refused to divulge paperwork regarding where the funds went and to whom.

Now he's whinging about L.A. Weekly not seeking out his side of the story? Tough darts, shorty.

Chaka Nawe
Chaka Nawe

"The 2011 admission price of $25 was increased on August 1, 2011 from $20, in order to help pay for the high city fees being charged to the fair."

Here's a question:1) What date did Mr. McKinley submit his request to the city for the permits?2) What date did the city respond with the money amount needed for the permit?

I would like this answered by the city and their records, and not Mr. McKinley

But are we to assume that Mr. McKinley had the city's money quote for the permits by August 1st, or prior to that? Even if we go with August 1st, that means McKinley et al knew the amount of money the city was requesting. Yet, he waited until the 11th hour to not only start protesting this, and to get his loan from LiveNation?

Jewel_A
Jewel_A

They are left with nothing because they have put the profits into their pockets. This is justice for an organization that has been abusing it's non-profit status for years and alienating the local businesses by capitalizing on bringing in bigger businesses from other neighborhoods such as Long Beach. Michael McKinely has become a profit monger who has lost his way from the original point of this NEIGHBORHOOD festival.

James Mccuen
James Mccuen

This illustrates why people should be concerned about "public-private" partnerships and the trend toward having public services run by non-profits. The non-profits that are awarded contracts with the City have a track record of insider connections to politicians and poor management with little or no accountability.

A. VENDOR
A. VENDOR

First of All! McKinley, Stop being a coward! Answer your calls!Here is Michael's Lawyer's info 626.578.0602 William. He said he is in contact with Michael and will make sure he gets his messages! Maybe Mr. William needs to be visited by all the vendors who want their money back!!!! Maybe if we blow up his phone he will see how big the issue really is!

A VENDOR Investigating for my MONEY!!!!

2Sides2EveryStory2
2Sides2EveryStory2

Sunset Junction Responds to LA Weekly Article "Sunset Junction's Failed Mission": The Sunset Junction Neighborhood Alliance was founded by a group of people who had been involved in organizing the first march in Washington, DC for lesbian and gay rights in October of 1979, and a similar march in Sacramento in the winter of 1980.Many of the people who participated lived in the Silver Lake neighborhood of Los Angeles, where there was a great deal of tension between the gay and lesbian community and the gang community. The decision was made to organize a street festival in the area to celebrate diversity and to bring these opposing forces together. The gangs were invited to attend the event. The gangs called a truce and they provided the first Security for the Sunset Junction Fair. The name "Sunset Junction" came from the corner at Santa Monica and Sunset where the Red Car stop was called "Sunset Junction". Micheal Mckinley was one person of this group. He alone did not found Sunset Junction. There has never been 250,000 attendees at the Sunset Junction Fair. Sunset Junction did not shift from community groups to corporations. Many community groups are in attendance at the festival and they continue their outreach. The corporations have been attracted to the festival because of it's demographics and popularity. One group has not been excluded to make room for the other group. All groups have been invited to participate, if they choose to do so. The 2011 admission price of $25 was increased on August 1, 2011 from $20, in order to help pay for the high city fees being charged to the fair. Sunset Junction paid $23,000 in fees its 28th year; fees were not charged the 29th year, and four days before the 2010 event marking the 30th year, organizers were told they owed $263,000 before the street closure approval could be made. This is more than a quarter of a million dollars leveled at a non-profit who previously paid less in fees. It is ten times more than any other comparable citywide event. It is more than the Hollywood Bowl pays for a year of street closures and police and its more than the Oscars pay for their street closures and security. *Public record backs this up. The advance ticket price for Sunset Junction is $15 a day and a special advance purchase promotion ran offering a weekend pass for $15. Additionally, free admission is always given to kids 12-years-old and younger and to senior citizens who are 65-years of age and older. Sunset Junction also provides 5,000 free wristbands to the community to attend for free and 1,000 wristbands to the business owners to attend for free. The city charges for the 2011 fair were $142,000. Sunset Junction did provide documented proof of funds that could have potentially allowed the festival to move forward this year. This included a substantial loan from a well established corporate music entity that should have removed any doubt as to the issue of payment of 2011 fees. Sunset Junction legal informed the Board of Public Works on 8/23 that a corporate loan had been secured. The date marks one day prior to the 8/24 hearing that would decide the fate of city permits. Micheal McKinley was at Chase Bank the morning of the 8/24 hearing to administer deposit of and transfer of funds. Sunset Junction contracts with Groove Tickets as a third party handling tickets onsite at the festival and in advance of the fair. All ticket sales are accounted for. The tax records of Sunset Junction are public record. Sunset Junction filed an extension for 2010 in order to allow the organization the time necessary to produce the 2011 fair. In the 30 years of producing the Sunset Junction Fair, the organization has always received its city permits close to the festival date. The city does not issue permits for street closures a year prior, nor even months prior. All of Sunset Junction activities are designed to be a part of our youth program. We are trying to empower the youth in the neighborhood in which they live and to provide work and life opportunities that they may not ordinarily receive. Our staff works with 50- to- 60 youth at a local high school to coordinate the last period sports program. Our youth and staff operate our farmer's market which takes place on Tuesdays and Saturdays. Our youth and staff also work for one year to produce the annual street fair and they also staff it accordingly. Like every other business or organization, Sunset Junction is not immune to the current economic downturn. Every business and organization fluctuates from year-to-year depending on many variables that effect the economy and that are out of our control. Sunset Junction also disputes Amanda Becker's statement that we pay $12,000 for a lobbyist and needy kids get $500 as completely inaccurate. During the 8/22 Board of Public Works hearing numerous at risk youth who have utilized Sunset Junction's youth programs returned that support by speaking on behalf of the fair and its positive impact on their lives. The majority in attendance at the BOPW hearing on 8/22 spoke in support of Sunset Junction. We are not clear on what facts allowed Ms. Becker to determine this numerical equation of monies going to the program's at risk youth. Ms. Becker also did not balance her news report with any Sunset Junction supporters. She interviewed only one Sunset Junction supporter but did not include this viewpoint in her news report. On the other hand, the same Sunset Junction detractors continue to be quoted in news reports with many reports failing to include the pro-Sunset Junction opinion. Sunset Junction also disputes the Silverlake Neighborhood Council's claim that they reached out to Sunset Junction many times. When the Sunset Junction Neighborhood Alliance did make a presentation to the Silverlake Neighborhood Council with handouts regarding the organization's year-round work, the documents were tossed on the floor in a show of mockery. This does not convey the actions of a professional group that is looking to build any type of amicable working relationship with the Sunset Junction Neighborhood Alliance. In closing, while Sunset Junction understands and respects the importance of news reporting for the community, credible journalism should always include the reporting of both sides of an issue. Credible journalism does not represent a highly repetitive one-sided account that continuously relies on the same sources for quotations. Thank you for your time and attention.

Micheal McKinley

Amanda M Becker
Amanda M Becker

The author here. Mr. McKinley, you were given a very detailed bullet-point list with every figure I used in the story and where the information came from but declined to respond.

mark
mark

As usual, Mr. McKinley's version of events exists in some alternate universe. There are just too many (of the usual) misrepresentations to correct, so the simple question is this: Perhaps the SJNA, as a "non"profit, would list the individuals who sit on the Board of this organization and their contact numbers so reporters like Ms. Becker might interview them. It is a mystery to the SIlver Lake community exactly who - besides Mr. McKInley - is on the Board that he testified he reports to.

And I understand Ms. Becker got the figure of $500. going to youth groups from the SJNA's tax form. Frankly, tthe IRS should review all the monies going in and coming out of the SJNA.

Potter
Potter

Here's a crock of s*** for all you bands to that have to deal with this skank. From the L.A. Times last friday; "Jennifer Tefft, who's helped book the festival since 2001, slotted themajority of the acts for 2011, her biggest influence on the festivalyet. "I really feel for every single person affected by this," she said."If I had known that [organizer Michael McKinley] didn't have a permitin place, I wouldn't have approached these bands." Does anyone believe she did not know how much trouble the fest was in?

Cooling Time
Cooling Time

Here's a crock of s*** for all you bands to that have to deal with this skank. From the L.A. Times last friday; "Jennifer Tefft, who's helped book the festival since 2001, slotted themajority of the acts for 2011, her biggest influence on the festivalyet. "I really feel for every single person affected by this," she said."If I had known that [organizer Michael McKinley] didn't have a permitin place, I wouldn't have approached these bands." Does anyone believe she did not know how much trouble the fest was in?

Eric Potter
Eric Potter

Here's a crock of s*** for all you bands to that have to deal with this skank. From the L.A. Times last friday; "Jennifer Tefft, who's helped book the festival since 2001, slotted themajority of the acts for 2011, her biggest influence on the festivalyet. "I really feel for every single person affected by this," she said."If I had known that [organizer Michael McKinley] didn't have a permitin place, I wouldn't have approached these bands." Does anyone believe she did not know how much trouble the fest was in?

Susan Rodriguez
Susan Rodriguez

WHERE is my refund for the tickets I purchased ahead of time to attend the festival?! Whatever numbers are public on the accounting does not necessarily reflect what what really received and anyone who believes those numbers is naive.

JJ
JJ

If people want to know why McKinley would act so arrogant and be a general prick to folks who have businesses in the immediate area of SJ (and even to members of bands playing the fest, from what I've heard) despite community concerns and whispers about where the money was going, let alone plan a huge festival without getting the proper permits from the city, you only have to look at the fact that these issues have been big for a long time now (L.A. Weekly wrote an article ten years ago highlighting some of these same concerns about him and his "charity"!) and yet nothing was done until now.

robin patton
robin patton

This is a typical situation of our city council inattention to a problem untill the last minute, The festival has been collecting a hefty admission charge for several years, this has been a sore spot for local shops being deprived of business due to the closing of Sunset blvd. So money has been collected and why just now at the last minute does the city council raise a stink? The issue should have been pressed long ago.The inattention to the Silverlake communities needs are quite obvious all you need do is take a walk down sunset blvd south of Sunset and Hollywood blvd. The closed Circuit City lot used by the Children's Hospital for parking is a fenced in lot, The so called Bates Motel continues to be an eyesore filled with homeless and graffiti, the corner of sunset and fountain bus stop has become a homeless encampment for the last 6 months. repeated calls to the city have been ignored. Who are responsible? Councilmen Eric Garcetti and Tom Lebonge both share the Silverlake district and if they would come down from thier penthouse offices on the corner of Hollywood and Vine and visit the communities bad spots once in a while when the cameras aren't rolling they might be able to help us.

redtrolley
redtrolley

Actually Garcetti's office is on Western Ave across from a porn shop.

And the Board of Public Works was the city agency involved (not the City Council) and the reason it went to the last minute is that the Board gave Michael McKinley every possible chance to bring a check in to pay for city street permits/closures,but even at the last chance APPEALS meeting (3 days before the weekend!) not only did he not produce a certified check for the due amount, but he didn't even show up!

 
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