Low-Cost Housing May Go Up in Smoke if Library Is Sold

The anti-tobacco crowd is missing the point when it attacks the Riordan-backed plan to sell the newly rebuilt Los Angeles Downtown Central Library to a Philip Morris subsidiary.

The militant nonsmokers--some call them health fascists--are heavily into symbolism. They say that trading with a tobacco company is like dealing with South Africa in the rigid apartheid days. This may seem like a giant leap in logic, although I’m not surprised, having lived among L.A.’s mineral water sipping, raw vegetable munching health nuts for a number of years.

I agree that the deal smells as bad as stale cigarette smoke. But not for the reasons given by the anti-smokers.

*

Think of the deal to sell the library as sort of a gigantic home equity loan.

Mayor Richard Riordan, an apparent majority of the City Council and the powerful Community Redevelopment Agency want to sell the pyramid-topped, restored library building to HNB Investment Corp./Philip Morris Capital Corp. for $71 million.

Ownership of the building would give the tobacco company subsidiary a big tax break under a federal law designed to encourage investors to buy and preserve historic structures, such as the library. The money would go to L.A.’s financially strapped city government.

The city would lease the building from the company for $5 million a year for 20 years. It could then buy the library back for $49 million. The new landlords are required to keep hands off the institution. No smoke rings would puff out of the pyramid, and the city’s smoking ban would be enforced inside. The library would not be forced to buy additional sets of Raymond Chandler novels or other books that glamorize smoking.

The deal is hurtling toward a council vote scheduled for this week and then to Riordan’s desk for his signature.

“We need it,” said Zev Yaroslavsky, chairman of the council’s budget committee. He explained that it would give the city money for new police cars, firetrucks and other badly needed equipment and construction projects.

But there’s a big trade-off. The $5-million annual rent to the Philip Morris subsidiary would come from a Community Redevelopment Agency fund now used to build low-cost housing.

The CRA became a major player in low-cost housing construction a number of years ago when the Ronald Reagan Administration all but eliminated federal subsidies to private builders who put up moderately priced apartments and houses.

At the time, the City Council, dominated by representatives of middle-class and upper-class communities, was reluctant to divert city revenues to help finance low-cost housing projects. But the need for such housing was growing. So Mayor Tom Bradley and the council turned to the redevelopment agency. Fueled with tax revenues from the huge and successful downtown redevelopment project on Bunker Hill, the CRA was the richest department in city government.

Funds from the Bunker Hill project were used to repay bonds the CRA sold to finance construction of between 1,500 and 2,000 low-cost housing units a year. The construction program has been very successful. In fact, the CRA first wanted to use proceeds from the library sale to finance additional affordable housing. But Mayor Riordan and council members have insisted that the money go to the city treasury.

*

What the deal means is that only a trickle of CRA funds will remain for affordable housing.

Take, for example, the Esperanza Community Housing Corp., which is using CRA assistance to build low-cost apartments in the garment district east of the Harbor Freeway.

Casa Esperanza is a 10-unit project on East 23rd Street. Villa Esperanza, a few blocks away at 28th Street and Maple Avenue, consists of 31 units, a child-care center and an adult education facility. More projects are in the planning stage. The CRA funds are a major part of Esperanza’s financing.

The residents are garment workers, earning $10,000 to $12,000 a year. Some families have four or five children. Despite their poverty and long hours in the garment factories, the residents, guided by a Sisters of Social Service nun named Sister Diane Donoghue, started Esperanza. They continue to run it today.

Sister Diane once showed me the projects. I saw the plans of the apartments. She explained what an improvement they would be from the overcrowded, overpriced slums that house most garment workers. She told me how the residents’ confidence and skill grew as they assumed the task of supervising planning, construction and operation.

If the sell-the-library plan passes in its present form, such projects will no longer have a share of Bunker Hill redevelopment funds. They will have to compete against projects favored by middle- and upper-class neighborhoods.

It will be low-cost housing versus more cops. And after the Police Department is enlarged, and given better equipment, the council members will spread the remaining money from the library sale around in pork barrel projects in their own districts.

Esperanza, which means hope in Spanish, doesn’t have much of a chance in this political marketplace. Neither do other affordable housing programs. And, when it comes to competing with cops and the Fire Department, neither does the library.

That may be how this story ends. Our new Philip Morris library, bare of books and staff. Maybe they can put the homeless there.