Larry Flynt scraps plans to open Gardena casino over tax break dispute

The world-known purveyor of porn and gaming was all set to open his second casino in the city -turning the Normandie Casino into the Lucky Lady-, when city officials this week backed out of negotiations for a no-strings-attached tax break.

“Sometimes no deal is better than a bad deal,” Flynt, who also owns Hustler Casino, told the City Council on Tuesday night. “I’m walking away from it. Four hundred people are going to be out of a job. I’m here making a sensible request. You’re going to make more money with me with these two casinos than you ever made before."

“I feel like I’m treated as a second-class citizen and I don’t like it one bit, especially when I know I’m picking up the city payroll every week and I’m a large part of the budget,” he said. 

The City Council voted 3-1 to give the Lucky Lady tax breaks on revenue that exceeds $2 million a month only if Flynt pays the city a minimum of $800,000 a month in taxes from his two casinos. Council members also expressed unease with a busty cartoon woman in platform heels intended for the marquee but were legally unable to block Flynt’s design choice.

The city typically gives economic incentives to growing businesses with the stipulation that a tax threshold is met or there is an otherwise clear benefit to the city, said City Manager Mitch Lansdell.

“Yes, I did add a ninth-hour provision that the two casinos must meet $800,000 a month to effectuate the other part of the agreement,” Lansdell said. “I totally understand the feeling of Mr. Flynt relative to this, but I also have to look at what it takes to make the city sustainable.”

The $800,000 figure is based on an average amount the two clubs have historically paid. Councilman Dan Medina, a former spokesman for the Normandie Casino, sided with Flynt’s argument that the city should give him the tax break without strings attached.

The Lucky Lady at Rosecrans and Vermont avenues was expected to open Monday when the Normandie closes and then undergo renovations, but Flynt has scrapped those plans for now.

He said the city should be grateful that he intended to inject an initial $17 million into the about-to-close Normandie Casino, which he called “a piece of junk” that needs a huge capital investment to become profitable. He anticipates spending more than $60 million in the next four years to promote, renovate and expand the Lucky Lady. The city would profit slightly from increased property taxes and greatly from its 12 percent tax fee on gaming institutions.

Flynt said the deal doesn’t make financial sense for him without a better tax break from the city.

On Thursday, he told the Daily Breeze he intends to fight the City Council head-on, working to unseat them in the next city election by throwing his powerful support behind opponents who would back his interests. The next city election is scheduled for March, but council members must call a special election or appoint someone to replace former Mayor Paul Tanaka, who was forced from his seat after he was convicted of corruption in his former role as Los Angeles County’s undersheriff.

“If they don’t change their mind, I’m going to dedicate all my time to get those people replaced because they’re not good for the city and not good for me,” Flynt said in an interview Thursday.

“The city has come a long way and we helped them get there. In the 16 years we’ve been down there (since opening the Hustler Casino), I’ve paid the city $80.5 million in tax revenue. We saved the city from bankruptcy. We’ve been paying the city payroll including the Police Department for the last 16 years and I don’t think anyone has done as much for the city and received so little.”