GRAND PROJECT RECEIVES FINAL OK L.A. CITY, COUNTY APPROVE PLANS.

Byline: TROY ANDERSON and RICK ORLOV

Staff Writers

Pursuing a vision of a world-class civic heart for downtown Los Angeles, city and county officials officially signed off Tuesday on final approvals for the $2.05 billion revitalization of Grand Avenue.

Despite concerns that the project would cost millions of dollars in public subsidies, the City Council voted 13-0 to support the Frank Gehry-designed redevelopment effort.

The county Board of Supervisors also voted 4-1 Tuesday to approve final terms and environmental impact reports for the project, which has been more than two years in the making.

It has been hailed as key to igniting a bustling night life on three acres across from the Walt Disney Concert Hall with shops, restaurants, parks, condominiums and a luxury hotel.

"This is truly a historic day," Grand Avenue Committee Chairman Eli Broad said. "We believe this project is a win-win for everybody."

Construction on the first phase is expected to start later this year, with completion in about four years.

But the project will come with a price tag, as the city's chief legislative analyst has said it will require $95 million in taxpayer funds plus $30 million in public improvements to build the luxury hotel.

That includes $60.5 million in hotel bed-tax revenue, $5.5 million in parking taxes, $24.4 million from the Community Redevelopment Agency and $4.6 million from the county.

Additional costs

In addition, the city and county will provide other investments totaling $29 million: $12 million for on-site public improvements; $10 million for affordable housing; $5 million for off-site improvements; and $2 million for streetscape.

"It seems to me that the city and county and the CRA have their spending priorities totally upside down," said Jon Coupal, president of the Howard Jarvis Taxpayers Association. "We find that kind of corporate welfare to be highly offensive to ordinary taxpaying citizens."

Chief Legislative Analyst Gerry Miller said the project is similar to other investments the city has made in Staples Center, the l.a.live downtown complex and a Hollywood and Highland redevelopment project.

"What we are looking for are catalyst projects -- those that help bring other economic development to an area," Miller said. "If you look at Staples Center, it helped generate other economic investment in the area.

"We think the same thing will happen here."

Miller said the amount being invested would be more than made up by revenue coming in as the project is built, in addition to community benefits such as job training, labor agreements and affordable housing.

Officials estimated that the project would create 29,000 construction jobs and 5,900 permanent jobs.

But Supervisor Michael D. Antonovich estimates that all three phases of the project will require up to $176 million in public subsidies.

"Supervisor Antonovich is disappointed that the board voted for a deal that is better for the developer than it is for the taxpayers of the county of Los Angeles," said Paul Novak, a spokesman for Antonovich, who voted against the project.

"And it is a sad day when the board makes a political decision, rather than an economic decision, when it should be protecting taxpayers."

Still, Broad noted that the project is expected to generate $148 million in lease payments to the county and city over 99 years, including $50 million in prepaid rent the developer has promised to pay for the park.

Broad compared those revenues with those of the two city- and county-owned parcels, valued at $138 million.

The only public opposition to the project at both the City Council and Board of Supervisors meetings came from a representative of the Bonaventure Hotel.

Attorney Christopher Sutton said the hotel was prepared to go to court to challenge the bed-tax waiver as being unfair to existing hotels and violating previously approved plans for the Bunker Hill area.

"What you are selling out by going forward with this project is hundreds of millions of dollars (in future tax revenues)," Sutton said.

No violation of plans

But Supervisor Zev Yaroslavsky said he doesn't believe approval of the project violates previously approved plans for Bunker Hill.

"I don't think it's as nefarious as what the attorney had tried to make it sound," he said.

Maria Elena Durazo, secretary-treasurer of the Los Angeles County Federation of Labor, AFL-CIO, said the project is an example of what the city can do when business and labor work together.

"This is the kind of thing that can come when we work with a common goal," Durazo said.

Councilman Dennis Zine said he wanted to make sure that the project would not mean a reduction of services to residents of the San Fernando Valley.

"Can you assure them that this will not mean less services to the Valley?" Zine asked Miller.

"It will not cost the city general fund any money or reduce existing services," Miller replied. "In fact, we think it will generate additional money for the general fund and we are looking to see where a similar model can be used in the San Fernando Valley and elsewhere."

Supervisor Gloria Molina, who chaired the Grand Avenue Authority, also said the project will serve as a model for other redevelopment projects.

"Yes, it may look like it's going to cost us something, but at the end of the day, we'll have a very significant project -- but more importantly, a very significant model that speaks to how we should move collectively together and join in partnership with developers and inspirational leaders."

troy.anderson(at)dailynews.com

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