Hollywood Sign Trust Will Be Repaid $45,000

The Hollywood Chamber of Commerce will repay $45,000 in interest forfeited by an independent trust fund set up to maintain the landmark Hollywood sign as the result of a controversial loan the chamber obtained from the trust.

“The chamber felt that after looking at the situation, it was the only proper thing to do,” said Larry Kaplan, the chamber’s president and executive director.

Kaplan said the group’s 17-member executive committee voted unanimously to repay the interest on $53,158 borrowed from the Hollywood Sign Trust, and that approval by the board of directors was expected to be a formality.

Last month, the chamber restored $46,529 to the trust fund--set up exclusively to maintain the famous sign--after acknowledging that the money was spent improperly to cover the chamber’s operating expenses.

Critics Angered

Although the chamber borrowed a total of $53,158 from the trust fund in 1979 and 1981, Kaplan said the loan repayment was for only $46,529 because the trust also owed the chamber money.

However, until last week chamber officials had hesitated to say what they intended to do about the interest forfeited as a result of the loan, prompting critics of the chamber’s management of the sign to demand that the money be restored immediately.

The famous sign atop Mt. Lee in Griffith Park is under the jurisdiction of the Los Angeles Department of Recreation and Parks. But by agreement with the city, the chamber has been responsible for its upkeep since 1978, after raising nearly $300,000 to save it from demolition.

“We hope to put some of the ill feelings (over the loan) behind us and start to build a better relationship with residential groups in the community,” Kaplan said of the decision to repay the interest.

Community activist Christine O’Brien, who last month called for the state to conduct an audit of the chamber’s finances, termed the decision to repay the interest “a positive development.”

“It doesn’t erase the fact that the loan should have never occurred, but I’m impressed that they are at least trying to make matters right,” she said.

In May, The Times disclosed that of $122,166 in assets reported by chamber officials last year as belonging to the trust fund, $53,158 had been on loan to the chamber for at least five years.

The trust was established in 1978 as part of the fund-raising effort to restore the landmark. About $214,000 of the almost $300,000 placed in the fund was spent that year to rebuild the sign. The rest was to be held in the fund to maintain the sign.

Under terms of the trust’s tax-exempt status, chamber officials agreed that the funds were to be used exclusively for maintenance of the sign, and that the trust was “not to be affiliated with or controlled by the Hollywood Chamber of Commerce or any other organization.”

Spent Only $600

However, federal and state records showed that as of the most recent filing period, ending in June, the trust had spent only about $600 for maintenance of the sign since the fund was created, and more than $3,300 on bank and accounting fees.

After news of the loan became public, the Department of Recreation and Parks expressed interest in replacing its informal relationship with the chamber over the sign’s stewardship with a “binding agreement” spelling out the role of the chamber and the department.

Kaplan said the chamber plans to propose a “formal agreement dealing with the stewardship of the sign” to the department, and will seek the consent of the Hollywood Sign Advisory Committee in the way the agreement is structured. Several members of the committee have frequently criticized the chamber’s management of the sign.

In addition, he said the chamber will propose spending “probably about $50,000” from the sign trust to improve security near the sign, including fences equipped with TV cameras and other surveillance devices around the sign and along approaches to it.

The often-vandalized sign has long been a sore spot with nearby residents of the Hollywood Hills. For years, they have complained of trespassers, loiterers and vandals drawn to the sign.

“Doing what we want to do up there with the beefed-up security won’t solve all the problems, but we think it’s a start in the right direction,” Kaplan said.