Panel OKs bonds to improve Staples area

A state panel has approved $30 million in housing bonds to improve the Figueroa Street area near Staples Center in downtown L.A. even though the initial application failed to show how the project would help provide affordable housing.

The funding was approved Thursday night by the state’s Local Assistance Loan and Grant Committee after the state allowed backers of the project to submit additional information.

“It looks like the institutions and players with the most money are getting more money,” said David Robinson of Strategic Actions for a Just Economy, a tenant rights group. “This is not the best use of funds.”

The $30 million was approved for the South Park Business and Community Improvement District -- funded by AEG, owner of Staples Center -- and Los Angeles redevelopment agency.

Business districts were not eligible to compete for the grant funds until legislation supported by AEG was passed by the state Senate in the last hours of its session last year and signed into law by Gov. Arnold Schwarzenegger. AEG is a subsidiary of Anschutz Co., whose founder and chairman is Phil Anschutz.

Across the street from Staples, AEG is developing the $2.5-billion L.A. Live, which includes the Nokia Theatre and will feature broadcast TV studios, movie theaters, restaurants and a luxury hotel.

Although the application was recommended last week by staff of the state Department of Housing and Community Development, officials there initially questioned its eligibility.

“From the information provided in your infill application, the department is unable to identify a clear relationship between the proposed capital improvement project and the identified housing projects within the . . . area,” they said in a letter May 19.

A consultant for the applicants wrote back that the agency’s goal was “transforming” the area into a residential neighborhood, including new sidewalks and lighting “that will enliven the street for residential activities.”

A few weeks later, the South Park grant was given a perfect score by state housing officials.

One affordable-housing developer whose grant application was rejected said he was not given the same chance to amend his application.

“For the state to go out of their way to provide an opportunity to dress up and clean up the application is not fair. This whole thing has been politicized from the beginning,” said the developer, who asked not to be identified because he plans to apply for a second round of grant funds next year.

Housing agency spokeswoman Jennifer Sweeney said the department “conducted an open and objective process for evaluating the applications.”

The agency, she said, “asked the Figueroa applicants for clarification on parts of their submitted application. It was not a request for additional information. Other applicants in this funding round also received requests for clarification.”

AEG reported paying $102,000 during the last year and a half to the firm Aprea and Micheli for work that included lobbying the state housing department on “infill housing bond guidelines.” The disclosure forms also said AEG “lobbied office of the governor regarding transportation and housing bonds.”

Companies and executives affiliated with Anschutz have given $2.7 million to political causes in California in the last five years, including $583,000 to Schwarzenegger’s campaign accounts.

Camille Anderson, a spokeswoman for the governor, said that information on bond allocations is routinely provided to the office but that the office did not make any changes in the staff recommendations. Being briefed on the bond allocations “ensures we are equipped to respond to constituent, local government, legislative, press and other inquiries,” Anderson said.

The committee’s recommendation now goes to housing department Director Lynn Jacobs, who is expected to give final approval to the grant.

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patrick.mcgreevy @latimes.com