Forget Selling Land to Balance L.A.'s Budget, City is Giving it Away

The council is set to vote on a proposal to give a three-acre site in North Hollywood to a developer building offices and a movie theater near the Red Line station.

By David Zahniser and Steve Hymon, Los Angeles Times Staff Writers

Even as Los Angeles officials search for surplus public property that can be sold to help balance this year's budget, the City Council is weighing a plan to give a three-acre site in North Hollywood to a developer who has promised to build an office tower and a seven-screen Laemmle movie theater.

Mayor Antonio Villaraigosa's proposed budget for fiscal 2008-09 calls for raising $14.2 million by selling excess real estate holdings, among them an old animal shelter in San Pedro, three vacant fire stations and the old Cypress Park library.

Yet Villaraigosa's appointees at the Community Redevelopment Agency are also recommending that the council hand over a site that the agency has valued at $14.9 million to the J.H. Snyder Co., whose projects include the West Hollywood Gateway retail center and the Crescent apartments in Beverly Hills. The firm's president has contributed $160,000 to the mayor's political and philanthropic causes.

The plan is scheduled for a council vote today. Councilman Tom LaBonge, whose district includes North Hollywood, said he supported the Laemmle project but relied on the redevelopment agency to craft the contract points.

"I don't negotiate these deals. I leave it up to the agency," he said. "But I do know this: North Hollywood went nowhere until [J.H. Snyder] got involved."

The proposal drew fire from one longtime critic of the strategy of subsidizing private development and of dense projects. Urban historian Joel Kotkin questioned whether the east San Fernando Valley needs more movie theaters.

"I don't understand it. We're giving away property when we're supposed to be selling it," said Kotkin, author of "The City: A Global History". "You'd think that the budget crisis would make people think twice about this."

The redevelopment proposal represents the final phase of NoHo Commons, a multiyear effort to revitalize North Hollywood's arts district. The first phase allowed 438 apartments and condominiums to be built and the second brought a Hows supermarket. Both are next to the Metro Red Line station.

Redevelopment agency officials said they offered the site to J.H. Snyder for $1 after the developer agreed to donate 500 square feet of it for a job center and spend $3.25 million to expand a nearby medical clinic and $1.5 million to build a child-care facility at nearby Valley College.

The company also agreed to relocate and refurbish Phil's Diner, a historic restaurant that has been shuttered.

NoHo Commons III is the third phase of a redevelopment project that began in 2000 and has relied on at least $46.3 million in city revenue.

The third phase would include a nine-story office tower with retail on the ground floor, the movie theater and a 700-space parking garage. The project is at Lankershim Boulevard and Weddington Street, one block south of the subway station.

"It's something the community is looking forward to," said Gazala Pirzada, a project manager with the redevelopment agency. "There is a need for a theater in the area, so we feel that this project is really providing a lot of different kinds of community benefits."

J.H. Snyder gave $50,000 to each of three Villaraigosa's initiatives: the push for a bill allowing him to take over the Los Angeles Unified School District, the campaign to elect three new school board members and the successful campaign on behalf of Proposition S, a $243-million telephone users tax on the Feb. 5 ballot. The company also donated $10,000 to Villaraigosa's inaugural gala, a fundraiser for after-school programs.

Cliff Goldstein, a senior partner with the company, said that he did not believe the land was worth $14.9 million -- and that he was unfamiliar with such an appraisal. Goldstein also said that the company had lent the CRA about $5 million to acquire the land.

"To suggest that it's unencumbered land that the CRA owns and can be sold is misleading," Goldstein said. "We purchased it at market rate . . . We're getting part of the land back to build an office building, we're giving some of the land back for parking and to build the movie theater."

Redevelopment officials said some of the concessions were negotiated by the Los Angeles Alliance for a New Economy, a nonprofit group that seeks to obtain money from developers for neighborhood-level and union-backed initiatives. The group is headed by Madeline Janis, one of Villaraigosa's appointees on the redevelopment agency board.

Janis abstained from the vote but her colleagues approved the deal with J.H. Snyder on March 20. Although the complicated financing package still requires the approval of the Los Angeles City Council, Villaraigosa went ahead with a groundbreaking four days later, appearing with LaBonge and Jerome Snyder.

"This project will bring affordable housing, jobs, mass transit and an array of community services to a part of the Valley which has been starving for investment for decades," said Matt Szabo, a spokesman for the mayor. "That is precisely the kind of progress that public incentives are intended to achieve."

Szabo also said that there was no connection between contributions to the mayor made by Snyder and the actions of the redevelopment agency board.

david.zahniser@latimes.com

steve.hymon@latimes.com

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