Business
A local LGBTQ+ nightclub was denied COVID-19 aid. Its owner is fighting back
On a Saturday night at North Hollywood’s Club Cobra, a drag queen dressed as Miley Cyrus lip-synced to “Zombie” by the Cranberries, with Halloween decor and disco balls dangling from the ceiling. Muscular go-go dancers grooved in a cloud of rainbow fog while patrons vibed to hits by Selena and Bad Bunny.
It wasn’t easy for the popular Latin LGBTQ+ nightclub to rebuild to this level of live entertainment after nearly going out of business because of the COVID-19 pandemic.
The public health crisis shut the operation down for 18 months and left its owners hundreds of thousands of dollars in debt. Making matters worse, the U.S. Small Business Administration has repeatedly denied Club Cobra’s application for COVID-19 relief money, alleging that the establishment offered services of a “prurient sexual nature.”
For Marty Sokol, 56, owner of Club Cobra, the lack of government assistance has been frustrating and surprising.
“We’re the good guys in this town,” Sokol said by phone. “We’re the place you have your birthday party at. We’re the place you bring your tía to. … It’s beyond insulting.” (Tía is Spanish for aunt.)
Sokol is one of multiple business owners who say they were unjustly denied money from the Shuttered Venue Operators Grant program, launched by the federal government in 2021 to provide financial support of up to $10 million to arts and entertainment venues and promoters decimated by the pandemic.
Some have taken legal action against the SBA. And though the courts have sided at various points with the business owners, Sokol and others are still fighting for financial aid.
“We really feel wronged,” Sokol said. “If it wasn’t for our community, there’d be no way we would have survived.”
The issue isn’t limited to nightclubs. The Times also spoke with a North Carolina-based movie theater chain and a Tennessee concert promoter that have struggled to secure grants. Prominent cases — including a dispute between the SBA and exhibition basketball team the Harlem Globetrotters over $10 million in grant money — have drawn attention to the problems. (The court dismissed the Globetrotters’ complaint against the SBA last October.)
The SBA has also drawn scrutiny for awarding more than $200 million in SVOGs to companies with rich and famous owners — such as Post Malone, Chris Brown and Lil Wayne — while withholding assistance for others, according to a report by Business Insider.
“The overarching complaint has been there is a lack of transparency in the SBA’s decision-making process,” said James Sammataro, a Miami-based partner at law firm Pryor Cashman who has represented entertainment businesses in other SVOG cases.
“What [critics have] essentially said is it’s too subjective. … It’s applied unevenly, and the SBA has — intentionally or otherwise — created a hierarchy of who is more entitled to receive the grant money.”
The SBA declined to comment, saying it “does not provide comment on pending litigation.”
The SVOG controversy serves as a reminder of the lingering consequences of COVID-19 years after the pandemic first wreaked havoc on the economy and judicial system. Just as entertainment businesses were disrupted by the global health crisis, so too were the courts, Sammataro said, compounding the typical tedium.
“There’s no expedition that’s applied to these types of cases, even though you’re literally dealing with companies [whose] very lifeline may be on the line,” Sammataro said.
Club Cobra has been serving drinks, DJ sets and live performances to the local LGBTQ+ community for more than a decade. Its sister establishment, Club Chico in Montebello, is coming up on its 25th anniversary.
During the COVID-19 shutdowns, Sokol and his team kept their business alive by streaming a socially distanced drag and go-go show on the subscription platform OnlyFans. Proceeds weren’t enough to dig Club Cobra out of debt, so Sokol applied for a $486,762 grant in April 2021.
When the SBA rejected Club Cobra’s application, Sokol appealed.
After some prodding, Sokol received an SBA email on Nov. 3, 2021 explaining that Sokol’s application was denied “at least in part” because Club Cobra “presented live performances of a prurient sexual nature” or derives meaningful revenue “through sale of products or services, or the presentation of any depictions or displays, of a prurient sexual nature.” In official materials regarding the SVOG program, the SBA outlines prurience as grounds for disqualification.
The SBA took issue with images of Club Cobra dancers in “seemingly sexualized” poses and “revealing” outfits posted on the business’ social media platforms. It also disapproved of the virtual drag and go-go shows that Club Cobra streamed on OnlyFans, calling them “erotic dance shows.”
Sokol sued, accusing the agency of arbitrarily and capriciously refusing Club Cobra grant money while awarding SVOGs to similar establishments around Los Angeles — such as LGBTQ+ nightclub Reload Entertainment on Cahuenga and Silver Lake’s Los Globos. The SBA argued that it had conducted an informal review of the other establishments and determined that an additional “prurience review” was not necessary.
Sokol demanded that the U.S. district court in D.C. force the SBA to reconsider his application. The court concluded that the SBA failed to provide a “reasoned analysis for why these apparently similarly situated competitors were treated differently.”
Sokol said it was painful to see other nightclubs receive emergency aid while Club Cobra was refused money he could use to cover renovations, outstanding rent payments and other obligations.
“Watching them rebuild with great ease, we didn’t begrudge them,” Sokol said. “We just wanted equal treatment.”
In December 2022, the SBA vetoed Sokol’s application again, this time providing analyses of five “alleged competitors” and why they qualified for grants. The SBA reasoned that, for the most part, those establishments did not regularly post suggestive images or present live performances of a prurient nature.
Sokol filed another motion for summary judgment in May 2024. The court has yet to respond.
Another business in contention with the SBA is Golden Ticket Cinemas, a North Carolina-based theater chain. .
Golden Ticket Cinemas President John Bloemeke had opened his fifth and sixth locations when COVID-19 ravaged the entertainment industry
Bloemeke was able to secure grants for most of his locations, but not for two based in DuBois, Pa., and Rapid City, S.D. After Bloemeke challenged the SBA’s move to shun those theaters, the government agency offered the business owner roughly $500,000 — down from the roughly $2.8 million he asked for.
Bloemeke filed complaints accusing the SBA of shortchanging Golden Ticket Cinemas and then failing to disburse those funds.
The SBA countered that Golden Ticket Cinemas wasn’t eligible for the full SVOG amount requested because those locations had allegedly been operational for longer than Bloemeke reported.
The court agreed with the SBA’s position that it was not legally obligated to disburse the funds. However, it also concluded that the agency’s logic for awarding a significantly lower amount was flawed and ordered the SBA to reevaluate the application.
According to Bloemeke, the SBA has yet to heed the court’s ruling.
“It was very frustrating,” Bloemeke said. “I mean, we have a nine-plex that’s only operating five of the screens because we’re still trying to get our head a little bit above water with some of this stuff.”
Meanwhile in Nashville, Justin Roddick is still trying to snag a grant for his company, Concert Investor, which produces tours for up-and-coming musicians. Over the past 12 years, Concert Investor has helped launch the careers of Twenty One Pilots, Little Big Town, Kelsea Ballerini and other artists.
When acts stopped touring during the pandemic, Roddick’s business suffered.
“A year after COVID, we found ourselves with no other option other than to completely restart,” Roddick said. “So when I heard about the grant, I was very excited.”
Roddick was soon disillusioned. His request for about $5 million was denied multiple times, with the SBA deciding that Concert Investor did not control enough aspects of its productions to “meet the definition of a performing arts organization operator.”
. The Concert Investor team alleged that the SBA unfairly altered the definition and moved the goal posts after the fact.
Initially, the court ruled in favor of the SBA. But an appeals court reversed that ruling in May 2024.
According to Patrick Corcoran, a representative for the businesses, the SBA was given a deadline of Dec. 11 to deliver a new decision. Depending on how the agency responds, Roddick might have to wait for the next Ballerini or Twenty One Pilots to come along and revive his touring business.
“It’s devastating to pay into the system and to believe it works a certain way … and then to have no action,” Roddick said. “It’s kind of unreal to me.”
Business
Mattel is revamping its work spaces as employees return to the office
Mattel, the toy maker behind major brands such as Barbie and Hot Wheels, is upgrading its real estate holdings, moving its studio operations and design center into new homes.
The company, headquartered in El Segundo, is planning to move its studio operations to a recently renovated 60,000-square-foot building by 2025. Mattel signed a multiyear contract to lease the office space at 831 S. Douglas St.
The building, located near Mattel’s current headquarters on Continental Boulevard, includes studios the company will use to shoot photos and videos to promote its products, as well as a patio that has fire pits and barbecue and kitchen areas. The building is close to other amenities including restaurants, an upscale athletic club, hotels and stores. For the last 30 years, Mattel has housed its studio operations on its campus, which includes multiple buildings.
The real estate deal is part of Mattel’s efforts to revamp its office space as the company aims to bolster productivity and creativity in the workplace along with attracting new employees. As workers start returning to the office after the COVID-19 pandemic, businesses are trying to make the office more attractive for employees who have been accustomed to working remotely.
The industrial building, part of Continental Development Corp.’s Continental Park campus, was recently transformed to include a studio production area to meet Mattel’s creative needs.
“Employers have strived to provide reasons for their employees to want to come back into the office and interact with their peers, said Bob Tarnofsky, executive vice president of real estate at Continental Development. “The amenities that they provide are far greater than what we saw typically pre-COVID.”
As employers rethink the future of work, it’s not uncommon for businesses to sign shorter-term leases, Tarnofsky said. Mattel, however, signed a long-term lease. He declined to say how much Mattel paid for the lease and how long it lasts.
This year, Mattel also announced it will be moving its design center, which has been located on Mariposa Avenue for more than three decades, to a newly renovated building in 2026. The center, where employees design the hair, clothing and other parts of toys, will be housed in a 167,767-square-foot office space known as Grand + Nash at 2160 E. Grand Ave. Mattel purchased the space for $59 million from New York Life Insurance.
“We are embarking on a significant interior modernization of our headquarters building at 333 Continental Boulevard, infused with the same design principles and inspired by office modernization efforts at Mattel offices around the globe,” David Traughber, Mattel’s senior vice president of finance and head of global real estate, said in a statement.
The buildings that currently house Mattel’s studio operations and design center are leased facilities the company will be vacating.
As of December 2023, Mattel had approximately 33,000 workers in more than 35 countries worldwide, according to the company’s annual report. The company has roughly 2,000 workers in El Segundo and offers its employees a hybrid work environment.
Business
Apple is trying to sell loyal iPhone users on AI tools. Here's what Apple Intelligence can do
Apple’s new artificial intelligence tools are here. Now the company is trying to help customers understand them.
The Cupertino, Calif.-based tech giant on Wednesday began offering 15-minute sessions for customers at its hundreds of U.S. retail stores on the company’s new suite of AI tools called Apple Intelligence, which can help iPhone users to compose emails faster, create new emojis and delete their exes out of photos.
Apple Intelligence is a key feature on Apple’s newest operating system, which the company hopes will propel more customers to upgrade and buy more devices. The new capabilities are featured prominently in ads for the iPhone 16 and iPhone 16 Pro that have aired lately, including during the World Series.
AI tools have been available to the broader public for a while now, but putting them directly in the hands of loyal Apple users could significantly accelerate the technology’s mainstream adoption. But the features will likely have a steep learning curve for some users, so Apple Store employees are tasked with walking customers through them.
The first set of new tools became available with the newest operating system update and works on iPhone 15 Pro, iPad A17 Pro or M1, Mac with M1 or newer models.
“One of the problems with a new tool like Apple Intelligence is getting people to try it out in the first place,” said Rob Enderle, principal analyst with the advisory services firm Enderle Group. “We tend to be creatures of habit and particularly as we get older, we don’t mess around with stuff that’s new and different. So getting people to use the tool becomes an important part of actually validating [whether] the tools [are] any good.”
Here are some of the key features of Apple Intelligence that The Times demoed. The effort is part of the tech giant’s “Today at Apple” sessions that aim to help educate Apple customers on how to navigate their devices.
Assisting communication
New AI tools can assist iPhone, Mac and iPad users with proofreading and composing messages.
For example, an iPhone user planning a sushi gathering at her house can type a few blurbs describing the time and place of the event, and Apple Intelligence will help create a full invitation.
Apple Intelligence can help change the tone of the message — whether the user wants it to be more friendly or professional.
The tech can also flag questions in an email that a user didn’t answer, summarize memos and prioritize notifying users on time-sensitive messages, such as when a delivery has arrived, so the note doesn’t get lost in their inbox.
Compiling memories, erasing exes
The AI tools can help users better find specific photos in their libraries and create short videos to relive memories based by typing in descriptions. For example, a mom can type in, “Hannah and her bunny over the years,” and the software will generate a slideshow compilation video from her photo library with music.
Apple Intelligence also has a photo editing tool inside the Photos app that lets users remove unwanted objects or people in their photos by tapping, brushing away or circling the image. People can delete selfie-sticks, photo bombers or even your ex-boyfriend or girlfriend from the picture.
A smarter Siri?
With the updated tools, Apple‘s voice-command system Siri will be able to better detect what a user is asking, even if they stumble over their words. Users can choose to speak or type questions to Siri.
For example, if someone tells Siri, “Set an alarm for — oh wait, no — set a timer for 10 minutes. Actually, I just thought about it, I can probably do it in five. Make it five minutes,” the software would, in theory, be able to figure out what the tongue-tied person meant to say.
Emojis on demand
In December, Apple Intelligence will also allow users to create their own customized emojis to use as stickers or reactions in text messages. For example, users can type a description such as, “shrimp with a cowboy hat,” and will receive a corresponding emoji to use in communications or create ones based on photos of their friends and family.
Other December updates include the option to access ChatGPT through Siri.
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