STAPLES $3 MILLION IN ARREARS ARENA OWNER WAS NEVER MAILED A PROPERTY TAX BILL.

Byline: Beth Barrett Staff Writer

Tax Day came in a big way Friday for Staples Center, owned by Denver billionaire Philip Anschutz's AEG Corp., with the Los Angeles County Assessor's Office announcing the L.A. Arena Land Co. owes about $3 million in back property taxes, the Daily News has learned.

Assessor Rick Auerbach's office mistakenly didn't change the assessment records in 1999 on 26 acres next to Staples Center that is earmarked for a $1 billion hotel and sports-entertainment complex. The property was transferred from the Community Redevelopment Agency to L.A. Arena Land, which is owned by Anschutz Entertainment Group, as part of the city's incentive to get Staples built, but the company was never sent a tax bill.

``We messed up,'' Chief Deputy Assessor Gary Townsend said Friday.

L.A. Arena Land won't have to pay any interest or penalties on the new assessment of $41.1 million for the properties and improvements because of the error.

The company also waived the statute of limitations, which allows the assessor to go back just four years, and agreed to pay the full amount, Townsend said.

The county's auditor now will finalize the tab, including any relatively small charges resulting from bonds or special assessment districts, with the county tax collector expected to send the bill within a couple of months. The company then will have 30 days to pay.

L.A. Arena Land spokesman Michael Roth said the company will pay the bill as soon as it arrives.

``Over the last several months, we have worked with the county to provide them with all of the information they have requested. We believe the results are fair, and are glad to have resolution on this matter,'' Roth said.

In October, the Daily News raised questions about the property's tax status, leading to the six-month assessment process.

``You want to make sure you do a thorough job,'' Townsend said.

The bulk of the back taxes, or just over $2.6 million, will be divided among the county, L.A. city and schools because most of the property is within an old redevelopment area that has a cap, meaning additional property tax dollars cannot go into it.

That property runs from the Harbor Freeway to Figueroa Street, and from Chick Hearn Court to Olympic Boulevard. It was valued, with improvements, at $36.3 million.

Six other L.A. Arena Land properties just north of Olympic Boulevard were valued with improvements at $4.8 million, resulting in back taxes of about $376,000. That money will be impounded pending litigation by the county, which asserts the newer redevelopment area isn't blighted, and therefore isn't a redevelopment area.

In 1997, the CRA brokered the massive land deal approved by the City Council, which included a 55-year land lease of city-owned property where Staples is located and other properties.

The city and CRA ultimately paid $70 million for the land acquisition deal. The city is being repaid $58 million with interest. The CRA's $12 million is not being repaid.

Councilwoman Jan Perry, whose district includes Staples, said that despite having to split the back taxes, the city's share of just over $858,000 is still ``a nice chunk of change.''

Perry said she hopes the city will earmark the money for services to the homeless in the area.

The city is in the final round of negotiations with Anschutz Entertainment Group and others over a memorandum of understanding to allow the development of a 1,200-room, 55-story hotel. The deal is expected to include some deferral of city fees, or other taxes, until the hotel starts to break even.

``(The back taxes) were not on the radar in terms of the negotiations,'' she said.

Former Chief Legislative Analyst Ron Deaton, who was a central figure in the negotiations over the entertainment district before moving to head the Department of Water and Power, said the transfer of the property always assumed the taxes would be assumed by the new owners.

``The plan was they'd pay it.''

Townsend said the Assessor's Office ultimately would have realized the property taxes weren't being paid as appraisers or others noticed construction on the hotel or other buildings, and as the office got copies of the permits involved.

``If it had still been listed (as being owned) by the CRA, we'd have known the CRA doesn't do building directly, and so it would have been called to our attention.''

The CRA isn't billed for property taxes because it's a public entity.

Townsend said the Assessor's Office has made a series of changes to prevent a similar error when public property is transferred to private ownership.

Public agencies now are asked to notify the Assessor's Office if they sell land to private entities.

A computer program that checks that property deed transfers from public to private ownership are on the tax rolls was run back four years and no other errors were found, he added.

The Staples transfer took place a year before the office got a new computer system that allows deeds to be sent electronically from the Los Angeles County Registrar-Recorder's Office in Norwalk. In 1999, the documents were sent by truck, then processed by the assessor's staff.

``This can't happen again,'' Townsend said.

Beth Barrett, [phone]

beth.barrett(at)dailynews.com