The LFS tank in question sounded a lot like one of my LFS's so I sent a PM to TheFishTeen and determined that it was.
I bought my very first fresh and saltwater setups from the owner in 1975 and he has been an knowledgable, respected and reliable resource for all things aquarium-related for me.
His shop is beautiful, his tanks sparkle, his livestock is healthy and I can assure you he knows what he is doing. He's been doing this very successfully for 35+ years for Pete's sake! And, he was probably maintaining his own tanks for years before he turned his hooby into a business. You don't remain in business for over 35 years with a loyal clientele if you're a scammer. He assuredly is not.
Yes, he uses Los Angeles tap water. As several in this thread (and in numerous other threads) have pointed out, it is possible and practical. His store display tank is overstocked, but everything else he does is beyond reproach.
I just re-entered this hobby a few months ago after a long haitus and IMO there are only a few hard and fast rules, everything else is opinion. I've spent countless on ReefCentral and, as I am sure most of you know, there a multitude of threads where people just completely disagree about "how to do it". I now read as much as I can and form my own opinion by weighing all of the various options and opinions.
If it works for you, just do it.
Anyway, here's a pic: