Petitioners Try to Derail Metro Rail Tax

Property owners hoping to escape millions of dollars in taxes intended for construction of the second phase of the Metro Rail subway are trying to kill a proposed assessment by forcing an election on it.

Some commercial landowners near planned Metro Rail stations in Hollywood, Mid-Wilshire, North Hollywood and along Vermont Avenue say the tax, which could raise $627 million over 19 years, should not be borne by them alone. They want the RTD to poll an estimated 3,000 affected commercial property owners before imposing the levy.

“We are talking about a question of taxation without representation,” said Andrew Miliotis, a Mid-Wilshire businessman circulating petitions that would force the transit district to hold an election.

Thomas De Angelo, general manager of the Sheraton-Town House on Wilshire Boulevard, said his hotel would be assessed $85,000 a year.

“We want Metro Rail, but we think the way they are financing the assessment is unfair,” De Angelo said. “It increases my real estate taxes 115% for 19 years. This is why we are up in arms.”

The RTD board heard complaints about the proposed tax several weeks ago at a public hearing, but the board is expected to approve it today.

Regional transportation officials are nervous about the petition drives because they say the tax is key to a $2.5-billion financing package for the 13.3-mile subway extension, scheduled to begin running between MacArthur Park and North Hollywood in 1998. Without the money, they said, construction could be delayed or scaled back, or funding for other segments of the 150-mile rail network could be jeopardized.

“Obviously, it would be serious,” said Richard Stanger, director of rail development for the Los Angeles County Transportation Commission, which oversees federal funding for Metro Rail. “The project may just have to be completely rethought.”

Gary S. Spivak, director of planning for the RTD, said a vote against the tax would send officials back to the drawing board to find an alternative assessment. The current proposal was fashioned by a 30-member task force appointed by the RTD, including some property owners along the route.

Under the proposal, commercial property owners within one-half mile of 11 planned stations from Mid-Wilshire to North Hollywood would be subject to the so-called “benefit assessment.”

The tax, collected in 19 annual installments beginning in 2000, would enable the RTD to issue $75 million in construction bonds. RTD officials estimate they would need to collect between $376 million and $627 million in assessments to finance and repay the bonds.

The RTD has divided the 13.3-mile stretch into five separate districts: Mid-Wilshire, Vermont Avenue, Hollywood, North Hollywood and Universal City. Under state law, the RTD is required to call an election in any of the districts if landowners holding 25% of the assessed value of property demand a vote.

Should property owners in any of the districts succeed in killing the tax, the RTD will face the difficult task of making the assessments stick in the other districts. Spivak said the RTD would move forward with plans in districts where it is not defeated, but even the tax’s strongest supporters say that would be a hard sell.

“People would resent having to pay,” said Larry Kaplan, president of the Hollywood Chamber of Commerce, which views Metro Rail as an important part of Hollywood’s revitalization. “It would be a problem.”

Opponents of the tax have 30 days to collect the necessary signatures, although there is some confusion as to when the 30-day period begins. Those gathering signatures in Hollywood and Mid-Wilshire, acting on the advice of their attorney, began the countdown on Jan. 20, the day the RTD board held the public hearing on the proposal. The RTD said its attorneys have not made a ruling on the issue.

After verifying signatures, the RTD would have 90 days to hold the election. Only those property owners subject to the assessment could vote. Owners would receive one vote for each $1,000 of assessed value, with a simple majority of the votes prevailing.

If approved, the assessment would fall between 33 cents and 55 cents per square foot annually and would affect an estimated 57 million square feet of property. It would not apply to residential property or land owned and occupied by nonprofit groups or government agencies. It would need to be approved by the Los Angeles City Council and the county Board of Supervisors before becoming law.

RTD officials say the proposed assessment is justified because studies in other cities have shown that property owners near new subway stations enjoy higher land values and easy accessibility. The RTD likens the tax to fees homeowners and businesses typically pay for street lights, sewer systems and other public benefits.

But a group of property owners near six planned stations in Mid-Wilshire and Hollywood, calling themselves the Committee Opposed to Metro Rail Taxation, question those studies. They say the $75 million should be raised from gasoline taxes or other countywide measures since the entire Los Angeles area stands to benefit from the subway, not just nearby property owners.

Transportation officials said there are no other sources of funds, unless they take money intended for other segments of the regional network.

“We don’t have money sitting around doing nothing,” said Spivak. “The money is committed.”

Opposition to the tax has been greatest in Mid-Wilshire and Hollywood, but petitions are also circulating in North Hollywood and along Vermont. There apparently have been no efforts to begin a petition drive in the Universal City district.

The Mid-Wilshire district includes planned stations on Wilshire Boulevard at Vermont, Normandie and Western avenues; the Vermont Avenue district includes stations at Beverly, Santa Monica and Sunset boulevards; the Hollywood district would have stations on Hollywood Boulevard at Vine Street and Western and Highland avenues; the Universal City district has one station near the Hollywood Freeway and Lankershim Boulevard; and the North Hollywood district has one station near Chandler and Lankershim boulevards.

Miliotis, a spokesman for opponents in Mid-Wilshire and Hollywood, said the group already has about half the necessary signatures in Mid-Wilshire. The drive there has been bolstered by support from two prominent business organizations, the Wilshire Chamber of Commerce and the Wilshire Stakeholders Group.

In Hollywood, signature gathering has been slower, in large part because there are fewer large landowners and the Hollywood Chamber of Commerce has thrown its support behind the assessment district.

“Look, nobody likes to pay taxes . . . but sometimes you have to bite the bullet and you have to make an investment in the future,” said Kaplan, the chamber president.