Planned Sale of Library Rejected by City Council : Landmark: Members fear a backlash against turning the property over to a tobacco firm subsidiary. The mayor’s alternate budget does not depend on the revenue.

Declaring that the political risks were not worth the financial benefits, the Los Angeles City Council on Friday killed a plan to sell part of the landmark Central Library to a subsidiary of tobacco giant Philip Morris.

Council members defeated the plan, 13-0, despite lobbying by a top aide to Mayor Richard Riordan, who promoted the $71-million deal as a painless way to help solve the city’s budget problems.

After the vote, Deputy Mayor Michael Keeley immediately sought to downplay any political damage to Riordan. “It was never our deal,” Keeley said, noting that the library sale was originally proposed a decade ago by the city’s Community Redevelopment Agency under then-Mayor Tom Bradley.

Riordan had prepared for defeat. He drafted an alternative budget plan that does not count on the library sale proceeds to help close a $33-million deficit. He will announce the plan, the first budget proposals of his Administration, next week.

In rejecting the library sale, council members expressed fear of a public backlash against the city mortgaging what one lawmaker described as the city’s “most precious asset.”

“What concerns me more than anything else is the question of public perception,” said Councilman Marvin Braude.

Council members also said they did not fully understand the complex transaction.

“You don’t sell a library unless you can lay out a very clear-cut, easily understandable reason to do so,” said Councilman Joel Wachs.

The decade-old plan called for the city to convey the pyramid-topped Goodhue building in Downtown to the Philip Morris unit, which would have gained substantial tax credits under federal historic preservation laws.

Philip Morris would have had no say over operations of the library, which the city would have leased back for $5 million a year. The plan provided for the city to buy back the historic structure after 20 years.

Some critics questioned how a city that just banned smoking in restaurants could do business with a tobacco company that lobbied heavily to defeat the law.

During a public hearing, Ken Herman, an anti-smoking activist and housing advocate, objected to the city dealing with a tobacco company. “L.A. may be financially bankrupt,” he said. “But is it morally bankrupt too?”

Most of the opposition stemmed from a plan to use revenues of the Bunker Hill Redevelopment Project to make the city’s $5-million-a-year lease payments. The Bunker Hill project is a major source of funding for the city’s low-income housing construction program.

That drew strong opposition from several council members representing heavily low-income districts.

Councilwoman Rita Walters said that she also was concerned about the speed with which the deal moved through City Hall.

“There has been too much ‘hurry up, hurry up, it’s got to be done,’ ” she said. “I’m reminded of the consumer admonition: Caveat emptor, buyer beware.”

Council members Ruth Galanter and Zev Yaroslavsky, both of whom earlier supported the plan, voted against it Friday. Both said that as they scrutinized the issue further, new questions arose.

Citing a risk that the city could not buy back the library after 20 years, Yaroslavsky said, “This is a risk I am not prepared to take.”

Galanter said the plan initially was very enticing. But, she said, “I have been learning more every day about the wrinkles of this.”

Dozens of housing advocates attended the meeting to protest the plan, carrying signs reading: “Too Much Risk, Too Little Gain.”

Steve Clare, director of the Venice Community Housing Corp., said, “There are other ways to balance the city budget, other than hocking our cultural landmarks.”