By Liz Ohanesian and Andrea Domanick

(Editor's note: On its Facebook page, the Satellite Club, which is presenting a stage at SJ, says that the festival has raised the money the city is requiring. This does not guarantee the city will grant them its permit, however.)

Despite the city's denial of its permit, Sunset Junction organizers are insisting that the festival will happen this weekend. The organizer's lawyer, Phillip Tate, told The Wall Street Journal's Speakeasy blog today that the organization was “within striking distance” of raising the $141,000 the city is demanding.

The Sunset Junction Alliance will resubmit its permit application at a meeting tomorrow with the Los Angeles Board of Public Works. While the 9:30 a.m. meeting is open to all, it's not clear if public comment is permitted. “It is the Board's policy to allow comment on individual agenda items as the Board Chairperson may deem appropriate,” states the Board's website.

In any case, many of the bands scheduled to play are assuming the fair will be cancelled. We told you this morning that groups and their agents were scrambling to find a contingency plan, and as of this afternoon, West Coast Sound can confirm that a significant number of acts have booked alternate gigs at local venues in anticipation of the festival's cancellation.

“It isn't an easy task and if Junction does get cancelled, there will need to be a lot of juggling and adjusting to accommodate as many acts as possible,” says one Los Angeles booking agent, who asked to remain anonymous to protect herself professionally. “But people complain about Junction every year — there's always this drama and then it ends up happening.”

Indeed, there have been close calls in the past; two years ago, the street fair was dangerously close to being canceled, over concerns about the effect on the neighborhood, and that wasn't the first time.

This year, however, the issues are different. It's not so much a battle between the neighborhood and the festival, but rather the festival versus the city — and, thus, all of the tax-paying citizens within. The organizers pissed off a lot of people when they said they wouldn't pay.

“The city incurs legitimate costs and it's not fair and it's not right,” says Sarah Dale, owner of Sunset Blvd. boutique Pull My Daisy and a member of Silver Lake's neighborhood council.

If the plug were pulled, it would be especially catastrophic because everything for Sunset Junction is already booked. Bands have traveled to Los Angeles. Tickets are sold. Lots of people have something to lose, from managers to booking agents to local vendors. “Part of me thinks that they probably will [proceed with the festival] because it's really what always happens,” says Dale.

The manager of nearby Good Luck Bar, however, remains frustrated. “[I'm] disappointed by the lack of urgency by the organizers. [I'm also] disappointed by the city's stubborn refusal to negotiate and provide leeway in the matter,” says the manager, David G., who asked us not to reveal his last name for fear that his views don't line up with his employer's. “In the end, the guests of the event ultimately are the ones who are punished.”

While Good Luck Bar doesn't have a direct relationship with Sunset Junction, its proximity to the festival — it's located near Sunset on Hillhurst — has made it a popular destination for attendees. His establishment has a financial stake, as do many others, and he's in favor of the festival.

Nonetheless, he hopes all parties involved will keep its original goals in mind. “It seems like there's an overwhelming concern that Sunset Junction has become profit-oriented and the original [intent], which was to educate and celebrate, has been lost.”

Even if Sunset Junction 2011 occurs, the booking agent how wonders how many years into the future it can all last. “I imagine [festival founder Michael McKinley] will remain in debt until someone pulls the plug on him and he truly can't do the festival,” she says. “It does hurt businesses and it's no longer just for the Silver Lake and neighboring areas; it's a nationally recognized festival. There's no reason why he gets to be exempt from all the permits and paperwork that everyone else has to do.”

For pics from last year's fest, see “Sunset Junction 2010: Day One with Ghostland Observatory, Bad Brains and more” and “Sunset Junction 2010: Day Two with Lee “Scratch” Perry, Edward Sharpe and the Magnetic Zeroes and more.”

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