L.A.'S MONEY PIT PARK? CRITICS FEARING GRAND DISASTER.

Byline: Troy Anderson Staff Writer

Despite serious budget woes, Los Angeles city and county officials have started moving forward on the $1.2 billion Grand Avenue project in the heart of downtown Los Angeles with up to 25 percent of it needing public subsidies.

Driving the project is the vision of billionaire philanthropist Eli Broad and others who see Grand Avenue as the centerpiece for downtown Los Angeles - a ``central park'' linking Walt Disney Concert Hall, the new cathedral, sparkling new or refurbished public buildings, and housing and commercial projects.

Critics see it as another example of how downtown has become a bottomless pit for public funds over the last three decades.

An estimated $200 million to $300 million in public money will be needed to pay for underground parking facilities, street improvements and a 16-acre ``grand civic park'' stretching from City Hall to the Department of Water and Power building. Officials hope private donations or other sources of funding will help offset some of that cost.

``This sounds like the classic scenario where public officials underestimate the final cost to taxpayers,'' said Kris Vosburgh, executive director of the Howard Jarvis Taxpayers Association. ``We have 20-20 hindsight around here. We have seen so many projects where the costs spiral out of control.''

Indeed, critics point out that several efforts since the 1930s to create a central park downtown have failed, and Gideon Kanner, professor emeritus of law at Loyola Law School in Los Angeles, noted the Community Redevelopment Agency's Bunker Hill redevelopment project is not what ``you would call an efficient operation.''

``The history of redevelopment in California is not something to write home about,'' he said. ``The L.A. CRA has had endless problems, deficits and disasters.

``Essentially, it's a racket. This case may be different because the CRA and county own the land, so they won't be taking it from someone through eminent domain. But the idea is the same that they are going to make a gift, lease the land to a developer at a very friendly price, and he'll build and hopes he makes out.''

Officials have downplayed current budget problems and the fact that the county had to dip into its financial reserves while making massive health care cuts in 2002 to loan Disney Hall $22.5 million. The county spent $82 million on the Disney Hall parking garage.

The vision for the project is to turn the avenue into a ``grand promenade'' with 3.2 million square feet of development.

The project is expected to generate $85 million in local, county and state taxes and $809 million in annual rents and revenues.

Developers are expected to spend nearly $1 billion, transforming the heart of the city into a pulsating nightlife scene showcasing a 400-room hotel, restaurants, bookstores and entertainment venues, such as jazz clubs and outdoor concert areas.

Two of the four lots to be developed - which have served as parking lots since the 1960s - are owned by the CRA, and the other two are owned by the county.

Kathryn Barger-Leibrich, chief of staff to county Supervisor Michael D. Antonovich, said the supervisor voted last year against the creation of the Grand Avenue Authority because he was concerned how much the county would ultimately have to pay.

``He was concerned whether this was the best use of the funding, although the supervisor does recognize the value and beauty of the county facility, Disney Hall,'' she said.

The project is part of the Bunker Hill Urban Renewal Plan, which was adopted in 1959 and has been used as a blueprint to guide the development of office, hotel and residential towers from the 1960s until now.

Former Los Angeles City Councilman Ernani Bernardi, who successfully sued to prevent further Bunker Hill redevelopment projects, said he's not surprised officials are trying another one.

``They will do anything to get higher taxes generated in the downtown area,'' Bernardi said. ``I am surprised the Board of Supervisors is going along with it.''

Ayahlushim Hammond, CRA downtown project manager, said the four parcels slated for development are currently parking lots and the 1959 urban renewal plan calls for transforming ``underutilized'' parcels. She also said it's too early to know how much money the CRA will loan to developers for the project, but didn't expect the CRA to forgive those loans or offer tax credits.

``The CRA is committed to providing affordable housing there and we know that will come at a cost and is something we'll have to assist with,'' Hammond said.

Martha Welborne, managing director of the Grand Avenue Committee, said she doesn't expect any city or county general funds to be used on the project.

The public infrastructure costs include $73 million for the park - which is envisioned as a smaller version of the Mall in Washington, D.C., an area also surrounded by government buildings. Outside of the nation's capitol, downtown Los Angeles has one of the largest concentrations of government activity.

``We don't know where the money will come from for the park, but I'm looking at several parks around the country that raised funds from the nonprofit world,'' Welborne said.

``In Chicago, they are building a new band shell designed by Frank Gehry and paid for by the Pritzker Foundation. We are looking at that as an important model for us.''

In addition, Grand Avenue Authority officials expect street improvements along five blocks of Grand Avenue to cost $60 million. A total of $12 million has already been spent improving two blocks in front of Disney Hall and the Los Angeles County Music Center, making the area more inviting to walk along with wider sidewalks, lots of flowers and trees, and outdoor dining areas.

``For the street, ideally, there would be some government support for that, but at the moment the government doesn't have any money,'' Welborne said.

The garages underneath the park are expected to cost $57 million.

Last week, the committee selected two teams to move forward in the ongoing public selection process to secure a developer for the project, passing over a team headed by architect Frank Gehry, who designed Disney Hall.

Teams led by Forest City Development, which has developed mixed-use centers in major cities throughout the nation, and The Related Companies, which is most well-known for developing the Time Warner Center in New York City, will proceed to the next round of competition in the project.

The development, a vision of city leaders since the 1930s, builds upon more than $1 billion in current investments on Grand Avenue, including Our Lady of the Angels Cathedral, The Colburn School of Performing Arts, the Museum of Modern Art and Disney Hall.

``We'll look everywhere for funding,'' Welborne said. ``We realize we have to be creative. That's why we're thinking hard about the private sector. We are in serious negotiations with two developers. If negotiations with these two don't proceed in the way we want, then we'll go back to the other two.''

County Chief Administrative Officer David Janssen, a member of the committee, said it will take years before the project is completed, at which time he hopes current budget troubles will have long since passed.

``I don't believe we anticipate putting any county monies into this project,'' Janssen said. ``We are looking at this as a long-term revenue source.''

Troy Anderson, [phone]

troy.anderson(at)dailynews.com

CAPTION(S):

map

Map:

GRAND AVENUE PLAN

Daily News