Opposition to Metro Rail Tax Bills Swelling

Opposition to huge property tax bill increases on downtown businesses to help pay for the Metro Rail subway grew Friday as more than 200 property owners jammed an organizing meeting and agreed to mount a legal and political attack on the payments.

Turnout at the session, held in the board room of an old Spring Street bank building, was far larger than previous sessions, which had drawn a few dozen small property owners.

After an hour of discussion--and a litany of complaints about massive tax bill increases--property owners signed petitions protesting the tax, as well as pledges to provide financial support for a legal challenge.

‘Stop This Now’

“We have to stop this now,” said Sam Rubinfeld, a spokesman for the group. Calling themselves the Los Angeles Downtown Property Owners Assn., irate property owners have been racing to organize opposition to the Metro Rail assessments in hopes of stalling collection of the first payments, which are due Dec. 10.

The group agreed Friday to press their revolt on a number of fronts. Arguing that many property owners did not know about the tax, Rubinfeld said they will seek a court order postponing the first collection. The group’s attorneys have said that may be difficult because courts tend to give government agencies broad latitude on tax matters.

The group also expects to join a lawsuit challenging the constitutionality of the tax that was filed last year by the railroads that own Union Station. That case is not expected to be heard until next year, however.

On the political front, the group plans to deliver petitions to the Southern California Rapid Transit District board asking that property owners be allowed to vote on the assessments. “If they want to be fair, they should say, ‘OK, let’s have a vote,’ ” Rubinfeld said.

Postponement Sought

And the group will urge the RTD board to postpone a Dec. 4 vote on the issuance of $160 million in bonds to be repaid through collections of the so-called Metrotax over the next 20 years.

The protests began a few weeks ago when about 1,500 owners of property near the proposed downtown and MacArthur Park stations of the first leg of the subway were surprised by tax bills with increases of up to 500% or more, based on the size of parcels and buildings. They were based on a Metro Rail “benefit assessment” approved by the RTD board last year after public hearings.

Through the tax, businesses will help pay about 11% of the $1.25-billion cost of the first segment of the project. The justification for the tax is that property owners and businesses near the stations will benefit from increased property values and customers when the system opens in 1992.

RTD officials said Friday that the legal period for an election on the assessment district has expired.

RTD officials also said that while the board is expected to approve the $160-million bond sale--$130 million toward construction and the remainder for administrative expenses--the bonds cannot actually be sold until legal challenges to the tax are resolved.

Other Funding Sources

RTD board member Nikolas Patsaouras said the delay will not be a problem because funds from other sources can be used for the early phases of subway construction. The protests indicate that individual property tax bills need to be carefully reviewed, Patsaouras said. But he added that the overall tax on businesses is part of a carefully developed funding package for Metro Rail that “cannot be tackled at this point.”

Meanwhile, Los Angeles City Councilman John Ferraro, a Metro Rail critic, called for council hearings on the tax increases as early as next week. Citing the protests and complaints about fees of thousands of dollars to appeal the assessment, Ferraro said, “I just feel it necessary to review it publicly. . . . Is it fair?”

Although the RTD administers the tax, the City Council had an advisory role.