Unusual CRA Deal Promoted by Woo Contributor Questioned : Funding: Hollywood rehab plan includes prepaying six years of rent. Mayoral candidate’s office says support is based on project’s merits.

An unusual, $540,000 Hollywood redevelopment deal that has raised eyebrows at City Hall is being promoted by a hotel executive involved in fund raising for Los Angeles mayoral candidate Michael Woo.

Woo’s City Council office, which serves Hollywood, has backed the unconventional funding of the project, which calls for the Community Redevelopment Agency to prepay six years of rent for rights to move into the refurbished site of the Arthur Murray dance studio.

The councilman’s aides say support for the project is based on its merits and recommendations of city analysts, not fund-raising assistance that Woo has received from a chief proponent of the project, Alix Baptiste, general manager of the Hollywood Roosevelt Hotel. The hotel and adjoining dance studio building, across from Mann’s Chinese Theater, are owned by Japan-based Maruko Inc.

“This is not something initiated by Mike Woo, not something pushed by Mike Woo,” said campaign spokesman Garry South. “We have a lot of people who raise money for us.”

Still, the deal is likely to come under scrutiny next week when it goes before the City Council. “I think it is very questionable. We don’t pay six years ahead on anything,” said Councilman Zev Yaroslavsky, chairman of the Finance Committee.

The advance rent payments will help finance the rehabilitation of the historic studio building, a boarded-up site that when restored will provide the CRA’s Hollywood staff with a more visible presence in the district, officials say. The rent deal is below market rates, CRA officials say. But because no competitive proposals were sought for office space, it is impossible to say if the agency got the best deal, said Larry Stern, an analyst in the city administrative office.

Maruko, which has filed for bankruptcy protection, will also be permitted to use the $292,000 in prepaid rent as matching funds to obtain an additional $250,000 city loan to refurbish the studio.

H. Cooke Sunoo, the city’s redevelopment chief in Hollywood, said he developed the funding package with Baptiste without pressure or influence from Woo. The proposal is a creative effort to meet the agency’s objectives of revitalizing Hollywood Boulevard, he said.

And “it helps a company which is in bankruptcy, sitting there on Hollywood Boulevard,” Sunoo said.

Robert Nudelman, a Hollywood activist often critical of Woo, said the city is “going around the back door” to provide Maruko matching funds. Baptiste’s involvement in Woo’s mayoral fund-raising efforts is “another case of very questionable or poor judgment” on the councilman’s part, Nudelman said.

Baptiste was listed as co-chairman of a Woo fund-raiser Thursday night at the St. James Club in West Hollywood, and lent his Pasadena home for a Woo fund-raiser this year. Together, the events appear to have netted several thousand dollars for Woo, according to interviews with Baptiste and campaign officials.

Baptiste said he has not discussed the CRA deal with Woo or anyone from his staff. “I went by the rules,” he said, adding that his fund-raising activity “had absolutely nothing to do with the subject at hand.”

He said the city negotiated for a good price and protection of its investment. “It’s not like they are giving away anything,” he said.

Woo’s City Hall press spokeswoman, Julie Jaskol, said the council office has had only routine briefings and involvement in the studio project. “Basically, the idea of rehabbing space and getting cheap rent sounds like a good deal to us,” she said.

But Yaroslavsky, a frequent CRA critic, questioned why the city’s investment is not going into the more blighted, eastern stretch of Hollywood Boulevard.

“This is the part of Hollywood that everybody goes to; (it’s) not the depressed part,” he said.

Sunoo responded: “We would not have made much of a difference if we had gone into a more severely blighted area.”