$1.7 BILLION TAX DRAIN SUBSIDIES APPROVED FOR DOWNTOWN REDEVELOPMENT.

Byline: Beth Barrett and Rick Orlov Staff Writers

A massive new downtown redevelopment plan won City Council approval Wednesday with officials estimating it could pump up to $1.7 billion in property tax revenues into the city's core - money that would not be shared with the rest of the city and other local government agencies.

Previous estimates of the property tax impact of the project were put at $424 million by Los Angeles County officials for just 30 acres near Staples Center.

But that figured ballooned fourfold Wednesday when the Community Redevelopment Agency publicly disclosed that the entire 879-acre project could generate over time up to $1.7 billion in added property taxes that would stay with downtown rather than be shared with the rest of the city, the county, Los Angeles Unified and the community colleges. The money would be pumped back into the project in the form of loans and other incentives to subsidize development.

A move to bar use of the money for a new stadium for a National Football League was dropped as the council approved the project area for a sports, entertainment, hotel and retail complex as well as housing and other developments.

The vote was 12-3, with three San Fernando Valley council members Dennis Zine, Jack Weiss and Wendy Greuel flip-flopping from their preliminary vote last week. They raised new objections that the City Center plan was submitted without citywide review or discussion. Final action on implementing the plan was put off until May 15 because the vote no longer was unanimous.

The CRA board approved the project unanimously. CRA staff emphasized that at full development the project would still provide nearly $1.2 billion in tax revenue to the county, the city general fund and other agencies in addition to providing about $733 million for 12,900 new housing units, at least one-quarter of them low-income.

``My basic concern is that there are too many costs, too many questions and not enough process,'' Weiss said, noting the plan never went before a council committee and that a full list of costs was never provided.

Zine said he's concerned that it's ``billionaires pushing the project'' and the financial implications on the entire city have not been examined.

``There are so many unresolved questions on this project,'' Zine said. ``I don't understand the rush to judgment.''

Greuel said there weren't enough answers on the project's citywide or Valley impacts, nor on subsidizations of particular projects.

``I didn't have guarantees the San Fernando Valley would get its fair share,'' Greuel said.

Councilwoman Jan Perry, who has championed the redevelopment project as a way to increase housing and other opportunities in her district, said she decided at the last minute to withdraw a motion that would have prevented any subsidy of a football stadium - though she said she would oppose such a subsidy.

``I wanted to maintain maximum flexibility for land assembly,'' Perry said. The CRA often plays the central role in putting together many small properties for a large project.

Chief Legislative Analyst Ron Deaton said the project wasn't being rushed but had been in the works ``a long time.''

``I think there's a desire to get involved in making as much impact as we can in as many areas in downtown as we can,'' Deaton said.

Chris Modrzejewski, vice president of public affairs for the Anschutz Entertainment Group that operates Staples Center, praised the council's action but did not discuss his company's plans for development.

``We applaud the council's commitment to the continued development of downtown,'' Modrzejewski said. ``There are still a lot of needs in the South Park area, and we look forward to seeing it developed.''

Staples Center President Tim Leiweke is in New York City this week meeting with NFL officials about a team for Los Angeles, with speculation focused on the San Diego Chargers. Chargers spokesman Bob Johnston said there are no plans to move the franchise.

CRA Administrator Jerry Scharlin said the downtown project is needed because private developers aren't yet ready to support housing or a hotel that officials hope will reduce the Los Angeles Convention Center's drain on the city.

``This is very important for the region,'' Scharlin said in an interview. ``Downtown is the intersection of a lot of infrastructure, the intersection of major transportation. If there's more housing, more jobs, if we can take care of the homeless, we'll help everyone. That's what people talk about as smart growth.''

Scharlin said with a May 17 deadline approaching - which had to be met to allow revenues from the project to be collected within a year to 18 months rather than a year or so longer - there was an urgency to getting government approval.

``This is one of the few tools the city and region has to deal with homeless and affordable housing. Otherwise we're walking away from those issues. That would be sad.''

The CRA already has spent more than $1 billion in property taxes generated by earlier downtown redevelopment areas on L.A.'s core. The Staples Center project got a $12 million subsidy from the CRA, and a $70 million loan from the city, which is being repaid.

Scharlin added that any subsidies for developers - including a subsidy of $60 million to $75 million that's been estimated to make a hotel attractive to a developer - would be reviewed closely.

Calling the vote a ``historic event,'' he said, ``This was an important thing to do for the city.''

West Valley Councilman Hal Bernson, who is in his last term, said he was wearing his ``city hat'' in supporting the project.

``I think it's good for the city,'' Bernson said, adding the ``Valley benefits, too.''

Councilwoman Cindy Miscikowski said redevelopment is a ``tool,'' used in many communities, including the Valley, noting residents of Sherman Oaks previously dissolved one in their community.

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