Disney Hall Site in Danger of Lease Default, County Warns : Downtown: Officials threaten to seize $10-million deposit on concert facility, where construction was halted last month. A spokesman for the Disney family dismisses idea that the project could be canceled.

In a move that could derail construction of Downtown’s Walt Disney Concert Hall, Los Angeles County officials have threatened to declare project managers in default of their lease agreement within days and to seize a $10-million deposit to finish construction of a county-owned parking structure on the site.

In recent letters, County Chief Administrative Officer Sally Reed also called for a detailed plan for making the parking garage a stand-alone structure in light of expected delays in beginning construction on the Frank O. Gehry-designed concert hall.

The letters were sent to Ronald E. Gother, attorney for the Disney family, which has given $93 million for construction of the hall. Reached by phone Tuesday, Gother said, “We disagree with the county that we are in default,” but he said the letters do not signify a real intent by the county to cancel construction of the hall, recently estimated to cost $260 million.

“These are lawyers doing the lawyering thing,” he said of the threats. Gother maintained that relations remain cordial between the Disney Hall leadership and the county.

Assistant Chief Administrative Officer Sandy Davis said the letters are intended to raise a red flag that the county is deeply concerned about the status of the concert hall.

“We want to make sure that someone is in charge over there,” she said.

*

Faced with a $50-million funding shortage, Disney Hall officials said in early November that they had halted all construction-related work on the proposed concert hall and launched a study to cut costs of the Downtown project. The project, located at 1st Street and Grand Avenue on Bunker Hill, is to become the new home of the Los Angeles Philharmonic.

Frederick M. Nicholas, the Disney Hall Committee’s volunteer chairman, has said construction of the hall, scheduled to begin this month, would be delayed by as much as a year and a half.

The decision to halt work came after an August announcement that cost estimates for the hall had escalated to $260 million--$50 million above earlier projections. The higher figure includes both the concert hall and the county-funded underground parking structure nearing completion.

Supervisor Zev Yaroslavsky said the project seems to be unraveling.

“This problem is extremely serious and I’m seriously concerned,” Yaroslavsky said. “If things unravel, and they appear to be moving in that direction right now, it would be a great tragedy and shameful after all the Disney family has contributed to the county.”

Reed’s Nov. 22 letter to Gother asked for a plan to protect the unfinished garage from the elements. The letter also asked, in anticipation of construction delays, that alternative designs for a stand-alone parking structure be submitted to the county.

“The redesign must allow completion of the garage . . . prior to February, 1996, to enable the county to receive parking revenue to service the debt issued to pay for the garage,” Reed wrote.

On Dec. 16, Reed wrote another letter, expressing disappointment that the Disney Hall Committee had not responded to the Nov. 22 letter and noting that the group chosen to conduct the cost-cutting study, the Hines Interests, had not yet been “formally engaged.”

*

That letter also demanded that the Disney Hall committee provide a “serious, bona fide response and suggested program promptly, or we will have no choice to declare a default.” If construction does not start within 30 days of receipt of the Nov. 22 letter, the county would then move to use $10 million in liquidated damages to complete a free-standing garage, Reed said.

Gother said that he did not respond to the first letter “because I don’t recall . . . that the first letter required a response within 30 days.” He said he did not receive the Dec. 16 letter until Tuesday. He said he is drafting a response to the letters, which the county should receive by this Thursday.

Gother said that Disney Hall committee chairman Nicholas has been in touch with the county by phone and that on Dec. 16 county officials met with committee members and architects to discuss progress.

He said that the county had already been presented with some general proposals for a stand-alone parking garage and that architects had recently been told to draft three specific plans for the county’s perusal.

“I think they’d like to see a little quicker action on implementing one of those schemes,” Gother said.

Gother said that although the complete agreement between the Disney Hall Committee and the Hines Interest has not yet been signed, the group has been hard at work for several months on a preliminary study at a cost of $100,000 per month. Details of a four-year agreement with the consultant would be worked out in the next couple of weeks, he said.

The study, Gother said, should be completed by March 1, as originally scheduled.

Gother said that Disney Hall officials expect construction delays will require them to figure out a way for the garage to temporarily be made usable as a stand-alone facility.

Gother said he did not believe that making the underground garage usable on a temporary basis would necessarily require the construction of a permanent, landscaped top, and the garage could possibly have an open-air top floor.

“I think they (county officials) are concerned about the elements, but I understand those (issues) have pretty well been addressed already,” Gother said.

In the Dec. 16 letter, Reed wrote: “It is doubtful whether the city or the CRA would allow unfinished or temporary structures to be used by the public during the period between the garage opening and delayed commencement of construction of the hall.”