L.A. Plans to Beef Up Coffers With Land Sales

Hoping to fatten its shrinking coffers, the city of Los Angeles has launched an effort to sell the one valuable asset it has in abundance: land.

From Chatsworth to the Santa Monica Mountains to Venice, the city owns more than 7,000 parcels worth upward of $2 billion, everything from City Hall to small slivers left over after public works projects to vacant lots seized for nonpayment of property taxes.

The idea of selling off the weed-covered lots and empty buildings for cold, hard cash has been pushed by Mayor Richard Riordan, who hopes the money will help fund his plan to expand the Los Angeles Police Department.

The city estimates that it may be able to sell about 300 of the parcels, bringing in at least $30 million.

The plan has not been immune to controversy, however.

Some council members have already opposed the sale of valuable city property, notably lots in the Santa Monica Mountains above the San Fernando Valley.

“On the whole, we have not been supportive of selling sites in the Santa Monica Mountains,” said Howard Gantman, a deputy to Councilman Mike Feuer, who represents parts of Studio City, Sherman Oaks and the Westside.

Meanwhile, the entire council has voted to take half the proceeds from land sales to pay for community improvement projects in each district.

Riordan has reluctantly accepted the council’s changes.

“We preferred it all go to the general fund, but it was an acceptable compromise,” Stephanie Bradfield, Riordan’s council liaison, said of the proposal to divide the proceeds.

As for the sale of surplus land in the Santa Monica Mountains, a Riordan spokesman said the mayor will wait for a full appraisal of all city land in the mountains before taking a position on whether some or all should be sold.

By selling excess property, the city eliminates its liability and reduces its costs for maintaining the land. In addition, the city collects property taxes from the new owners.

It’s an idea that has been endorsed by experts who wonder, however, why it has taken so long. “The sound practice is to do it regularly and not to do it every 20 years,” said George Lefcoe, a USC land-use and real estate professor.

But evaluating all 7,602 parcels to determine what land the city has available to sell is a daunting task that is expected to take up to three years. The process is hampered because the city only has two real estate experts and a few clerks working on the effort. In addition, the city must analyze each parcel to determine whether the city would need the land in the future.

Additionally, under state law the city must execute 35 administrative steps before it can sell the land to private buyers. Part of the process requires first offering the land to transit agencies, school districts and agencies that provide low-income housing.

Finding Land

Despite the work required, city officials are confident they can identify plenty of land to sell.

“I have to believe that with over 7,000 parcels, we can sell some,” said Daniel Rosenfeld, who was hired last year to head the city’s Assets Management Division and oversee the land assessment plan. “We can’t afford to be pack rats.”

So far, about 70 surplus lots have been identified that may be sold. Next week, the city will hold its first auction for 16 Venice properties, most of which have been acquired over the past 30 to 40 years from owners whose development plans fell through. Bidding for the land will begin at 80% of the land’s assessed market value.

If all the Venice parcels are sold, the city could collect at least $1.7 million.

In addition, Rosenfeld and his unit are evaluating the 12 million square feet of office space that the city owns or leases to determine if some of it can be consolidated.

Although the city has identified half a dozen surplus parcels in the Santa Monica Mountains to be sold, Feuer has asked the Assets Management Division to hold off on any sales.

He has argued that the parcels should instead be left as open space or offered at a discount to the Santa Monica Mountains Conservancy for use as parkland.

Feuer worries that if the land does not remain open space, a developer may buy it to build a massive estate that would prompt complaints from neighbors, Gantman said.

“We are not supportive of new development along Mulholland Drive,” Gantman said.

Under state law, the city can offer the land to state agencies, like the conservancy, at the city’s original purchase price.

But John Diaz, who heads the conservancy’s land acquisition unit, said his agency is short on cash and is not in a position to make major buys. He said, however, that a measure on the November ballot could provide the agency with $20 million for land purchases, if approved.

The city may not be able to wait until November, however. Under state law, if the conservancy doesn’t respond to a city offer for land within 60 days, the city can sell the land at the market price to a private party.

Mulholland Parcel

One parcel the conservancy is particularly interested in is on the 14000 block of Mulholland Drive above Sherman Oaks. It has about 12,000 square feet of space and is zoned for a residential estate.

Officials with the city’s Assets Management Division say the city paid about $20,000 for the property as part of a larger purchase used to widen an adjacent road. But the city has not formally offered the land to the conservancy.

Diaz said his agency is interested in the parcel but may want to negotiate for a lower price. The land, he said, is bordered on three sides by conservancy parkland and would be a prime purchase.

“It’s part of a critical wildlife corridor,” he said.

The idea of creating 15 separate council funds to take half of the proceeds from land sales came from the Westside district of Councilwoman Ruth Galanter. For more than a decade, her district has had a special fund that takes in all the proceeds from land sales in Venice to pay for parking lots and other amenities for Venice tourists.

“We are like Disneyland without the parking lots,” Galanter said of Venice.

Efforts to sell off surplus land are also underway at the city’s semiautonomous Department of Water and Power, which is striving to become more streamlined in preparation for the competition expected when utility deregulation takes effect in 1998.

Funds for Police

Already, the DWP has raised $5.6 million by selling off parcels in Glendale and Mar Vista. It expects to take in another $5 million on the sale of 12 other lots throughout the county.

For Riordan, meanwhile, getting funds for more police has been a top priority since his 1993 campaign, when he pledged to expand the Los Angeles Police Department by 3,000 officers. Last month, the City Council approved funding for just 450 police recruits next year, rather than the 710 that Riordan requested.