Concession Offered to Library Plan Foes : Finances: Deputy mayor says $18 million would go to housing programs, whose advocates oppose sale.


Fearful that support may be eroding for a plan to sell part of Los Angeles’ historic Central Library to a subsidary of tobacco giant Philip Morris, a top aide to Mayor Richard Riordan on Monday sought to win over opponents who say the deal would wipe out much of the city’s low-cost housing funding.

During an impromptu meeting with housing advocates in a City Hall hallway, Deputy Mayor Michael Keeley offered the mayor’s support for spending at least $18 million from the $71-million sale on housing programs.

Keeley made the offer after the deal ran into opposition from City Council members Mike Hernandez and Rita Walters, who objected that it would siphon off funds used to build housing in their poor, inner-city districts.

But Keeley’s offer apparently failed to sway opponents.


Jan Breidenbach, director of the Southern California Assn. of Non-Profit Housing, said after speaking with Keeley that she still opposes the plan because the $18 million would not fully make up for the money that would be lost for low-income housing under the proposal.

“It’s still not a good deal,” she said.

The complex proposal, in the works for nearly a decade, would allow the cash-strapped city to raise $71 million by selling the pyramid-topped Goodhue building of the library complex in Downtown.

The city would lease back the building for $5 million annually for 20 years. This has drawn opposition because the $5 million would come from revenues of the Bunker Hill Redevelopment Project, which subsidizes about 40% of the city’s low-cost housing construction.


The Philip Morris subsidiary would reap millions of dollars in tax credits under a federal law designed to encourage preservation of historic buildings. The tobacco unit would have no voice over operation of the building, and the city would have the right to buy back the building in 20 years.

Proponents of the deal say it gives the city $2 million more than if it borrowed the $71 million .

Riordan hopes to use $14 million from the sale to help close a $33-million deficit in the city budget. The city proposes using $12 million from the sale to buy U.S. government securities, which officials say would generate $49 million in 20 years to assure repurchase of the library.

It would be up to the council and mayor to decide how the remaining $45 million would be spent. Several council members have said they would push to allocate $10 million to fund low-cost housing.

But Hernandez and Walters, meeting as the council’s Arts, Health and Humanities Committee, voted to oppose the library deal. The third committee member, Councilman Joel Wachs, said he was undecided on the proposal.

Keeley argued that under the new Adminstration, housing advocates have no assurance of receiving the same level of redevelopment funds for housing as they did under Mayor Tom Bradley. He noted that during the Bradley years, the bulk of Bunker Hill Redevelopment Project money went into funding housing programs throughout the city, but state law requires only that 20% of funds be used for housing.

The council’s Finance and Revenue Committee, consisting of council members Zev Yaroslavsky, Richard Alatorre and Ruth Galanter, last week supported the plan. A third council committee reviewing the plan, the Community Redevelopment and Housing Committee, put off a vote until Wednesday.

Several members said they will seek to postpone a full council vote until Friday so they can further study the issue.


Walters also cited the incongruity of the city dealing with a cigarette maker.

“The City Council has just enacted an anti-smoking law, and Philip Morris spent the largest amount of money to defeat our effort . . . and now we’re going to sell them our library?” Walters asked.