Central Library Building Sale OKd by CRA

Racing to beat an Aug. 31 deadline, Los Angeles redevelopment officials Monday approved and rushed to the City Council and the mayor a plan to sell part of the historic Central Library to a subsidiary of tobacco giant Philip Morris.

The $71-million deal, approved by the Community Redevelopment Agency board, drew protests not from anti-smoking forces but from housing advocates, who warned that it could wipe out many low-cost housing programs.

A handful of housing advocates complained that the estimated $5 million a year the city will spend to lease back the library will come from the Bunker Hill Redevelopment Project. The expenditure will exhaust much of the annual revenues of the redevelopment project, which subsidizes about 40% of the city’s low-cost housing construction.

The library deal, backed by Mayor Richard Riordan, has gained support because it would give the city $14 million in instant cash to help close a $33-million deficit in this year’s city budget.

The plan calls for the city to sell the library’s pyramid-shaped Goodhue building to the tobacco company unit for $71 million. The subsidiary would then lease the library back to the city for 20 years.

Philip Morris would receive tax credits but would get no voice in operation of the library, city officials said. The plan also provides for the city to buy back the building in 20 years.

The potential depletion of the Bunker Hill Redevelopment Project is a sensitive issue among housing advocates. Redevelopment funds have been used to pay for housing since the late 1950s and early ‘60s, when the building of office towers in downtown led to demolition of about 7,000 houses and apartment units. Redevelopment has funded the construction of more than twice that number of residential units throughout the city, officials say.

In a letter sent to City Council members after the CRA vote Monday, Jan Breidenbach, executive director of the Southern California Assn. of Non-Profit Housing, protested the sale of the library. Referring to claims by supporters that the quick infusion of revenue would give the city money to hire more police, Briedenbach wrote: “Businesses will not come here . . . if they cannot house their work force, no matter how many police officers patrol the streets.”

CRA officials acknowledged that the deal could leave the redevelopment agency unable to pay for more than $30 million in approved low-cost housing projects that have yet to be developed, and could end a housing program that has eased overcrowding in neighborhoods on the Eastside and in South-Central Los Angeles.

But redevelopment officials said they hope to persuade the City Council to find other ways, such as selling bonds, to continue the housing construction programs.

Anti-smoking activists have expressed outrage that the city is dealing with the nation’s largest cigarette producer, but none showed up at the CRA hearing. Any effort on their part to kill the deal was weakened Monday when Councilman Marvin Braude, architect of the recently enacted city ban on smoking in restaurants, endorsed the library sale.

“If we can use their (Philip Morris’) money . . . that’s just fine with me,” Braude said.

The deal will come before the council’s budget committee Thursday, then go to the full council Aug. 31, the deadline for Philip Morris to take advantage of tax credits provided under an obscure provision of the 1986 federal tax law to encourage preservation of historic buildings.

Monday’s vote to approve the sale was 3 to 0 with CRA Commissioner Dennis Luna abstaining. He said he did not have enough of an overview of the city’s financial situation to answer the question: “In this time of great fiscal uncertainty, is this the appropriate time to mortgage the Central Library?”