Funding for Hollywood Project OKd

After hours of debate Friday, the Los Angeles City Council approved public financial participation in a $385-million project that is billed as the cornerstone of a revitalized Hollywood.

But the deal’s critics--including Council President John Ferraro--cautioned that the 640,000-square-foot project at Hollywood Boulevard and Highland Avenue could still be halted if neighborhood concerns about its impact are not adequately addressed.

“I’m voting for this today because I don’t want it to stop, but I think we have plenty of opportunities to stop it if we don’t get what we want,” Ferraro said.

Under terms of the agreement with the developers, Toronto-based TrizecHahn Centers, the city will pump $90 million in community redevelopment funds into the proposed retail-entertainment complex. The Community Redevelopment Agency will spend $60 million to build an underground parking garage and $30 million for a live broadcast theater to host the annual Academy Awards.

For the first time in a CRA arrangement, the city essentially will allow the developer initially to pay off the theater debt using business, sales, utility and transient occupancy taxes generated by the development. Those taxes typically are turned over to the city’s coffers and used to pay for civic programs and jobs.

But Councilwoman Jackie Goldberg, who has championed the project, said the city will make millions from the complex and that it received special consideration because it is the key to revitalizing decaying Hollywood.

Other cities, such as Pasadena and Santa Monica, she said, have similar financial arrangements with developers, which have funded parts of Old Pasadena and the Third Street Promenade.

“I would like to have a place where people can shop and eat in the city of Los Angeles,” Goldberg said in an impassioned appeal to her colleagues. “The bottom line is that a good deal of the image of Los Angeles is tied up in the image of Hollywood. Because it is so wrapped up with the identity of Los Angeles . . . I think this project rises to a level a bit higher.”

Before the council voted 10-2 on the financial deal, with Councilmen Nate Holden and Joel Wachs dissenting, lawmakers heard strong opposition from neighbors, as well as support from other residents and the developers themselves.

Ferraro’s comments, however, were perhaps the most surprising. While he indicated that his main concerns were focused on the traffic increase and a possible street closure opposed by some neighbors, he also raised reservations about the deal’s financial aspects.

“I think you have to look at this deal,” Ferraro said, asking city officials several questions about the financial wisdom of allowing the developers to hold on to some taxes. “What good is it?”

Many of the hillside neighbors live within Ferraro’s council district, he said, and he believes their concerns should be addressed. They are mainly worried about heavy traffic blocking access to their homes--both for them and for emergency vehicles, and some are opposed to the closure of Orchid Avenue.

David Malmuth, a TrizecHahn executive, promised to continue negotiations with the neighborhood resident groups.

“We’re going to continue working with them--that’s a guarantee,” he said. “We have really worked hard with neighborhood groups.”

Wachs, who agreed with his colleagues that Hollywood desperately needs a “shot in the arm,” raised serious concerns about the financial terms of the deal, particularly because the city is setting a precedent.

“The question is not whether this is a good project, it’s who should pay for it,” Wachs said. “You are taking taxes due to the general fund and using them to pay back the debt.”

But although city officials acknowledge that their financial deal is atypical, they repeatedly stress the TrizecHahn project’s role in the improvement of Hollywood.

Councilman Mike Feuer went even further, saying it is “one of the most important neighborhoods in the western United States” and urged his colleagues to go along with it because overall it will financially benefit the city.

By approving the TrizecHahn development, Goldberg said, the council sent a strong message to potential developers that the city is serious about a Hollywood comeback.