RTD Assailed for $8.7-Million Building Lease

A Southern California Rapid Transit District decision to spend $8.7 million over four years to lease a downtown office building that it could have purchased years ago was attacked Friday by the author of a just-passed bill that would abolish the district.

“You can’t justify this lease to the taxpayers,” Assemblyman Richard Katz (D-Sepulveda) said. “It’s just bad management. . . . This is the exact reason why we’ve got to make changes.”

Katz charged that the RTD board’s decision Thursday to renew the lease on its Main Street headquarters would tie the hands of a new transportation board that Katz hopes will take over Jan. 1. He said he will try to force the RTD into reversing its decision, possibly by “putting strings” on state transportation aid to the district.

Gov. George Deukmejian is considering whether to sign legislation by Katz that would replace the RTD and the Los Angeles County Transportation Commission with a new agency, to be called the Metropolitan Transportation Authority. The governor has until Tuesday to decide.

RTD officials denied that they had foreclosed any options for the possible new board, saying the lease renewal can be broken. Moreover, said Jeffrey Lyon, the RTD’s real estate director, vacating the premises would take at least two years for an organization as large as the RTD.

Critics charge that the RTD made a major blunder when it passed up opportunities to purchase the office building in 1976, when it moved in, or in 1979, when the building was sold for $6.5 million.

The RTD reportedly has spent more than $20 million on rent and improvements in the last 11 years. District officials say they did not try to buy the building because they did not want to stay in the Skid Row area, despite pressure from city officials to remain and act as an anchor for improving the area. Until federal funding dried up a few years ago, the district had been planning to build a new office near Union Station, north of downtown.

RTD General Manager John Dyer told the board Thursday that the district cannot now afford to purchase the building, which he estimated could be worth $10 million or more. After a study of rents elsewhere downtown, Dyer said exercising the renewal of the lease was the best interim decision.

“There’s simply not anything available that is priced at or near this level,” Dyer said.

On a 10-2 vote, the board agreed. It also instructed Dyer to begin aggressively developing a plan to build or purchase a new office building, but that decision is likely to be made by the new board, if the reorganization bill is enacted.