Mayor Persuades Council to Revive Library Sale Plans : City Hall: Riordan says the panel was squandering a once-in-a-lifetime deal with Philip Morris subsidiary.

In a surprising turnabout after lobbying by Mayor Richard Riordan, the Los Angeles City Council on Tuesday revived a proposal to sell part of the landmark Central Library to a subsidiary of tobacco giant Philip Morris.

Having killed the deal four days earlier, the council voted 10 to 2 to reconsider it on Friday. However, it was not immediately clear whether the proposal will have the eight votes required to win approval.

When council members returned to City Hall after the Labor Day holiday, they were buttonholed in their offices, in the hallway and on the council floor by aides to the mayor and by Riordan himself.

Riordan has pushed the transaction as a painless way to cut the city budget deficit by $11.5 million without hurting the city’s low-income housing program.

The plan, originally proposed by the Community Redevelopment Agency under Mayor Tom Bradley, calls for the city to sell the pyramid-topped Goodhue building downtown for $71 million to the Philip Morris subsidiary, which would gain substantial tax credits under federal historic preservation laws.

Philip Morris would lease the library back to the city for $5 million a year, with the city repurchasing the historic structure after 20 years. Philip Morris would have no voice in the operation of the library during that period.

Several council members who were lobbied by Riordan said the mayor was concerned that the council was squandering a once-in-a-lifetime financial opportunity. A top Riordan aide said the mayor also felt that he had not had enough time to explain the complex deal to council members.

Council President John Ferraro said: “Friday, when I was talking with my wife, she said, ‘I hope you don’t sell the library.’ I said, ‘Well, Margaret, it’s really a good deal if it can be explained.” Ferraro said his wife watched the council meeting on cable TV and decided that she favored the proposal after hearing its explanation.

Opponents of the plan complain that the city would make its yearly lease payments with funds from the Bunker Hill Redevelopment Project, a major source of funds for construction of low-income housing.

Riordan proposed Tuesday that most of proceeds from the sale--about $45 million--be used to compensate the redevelopment project for the lost housing funds.

“Under the mayor’s proposal, there should be no loss of affordable housing,” Deputy Mayor Michael Keeley said.

The proposal calls for setting aside $12.2 million to buy U.S. government securities, which would generate the $49 million required by the city to repurchase the library in 20 years.

After insurance and other costs, that would leave $11.5 million from the sale to help reduce a $33-million shortfall in this year’s budget.

“Mr. Riordan is a pretty successful businessman,” said William McCarley, the mayor’s chief of staff. “This is the kind of deal that he’s used to engaging in.”

But Councilman Zev Yaroslavsky said Riordan faces an uphill battle.

“I don’t think it’s anymore just a housing issue,” said Yaroslavsky, who is still concerned about the risk of the city losing the library. “I think it’s a perception issue about selling a public asset.”