Riordan Woos Sponsors in Name of Development

Borrowing a tactic from developers of sports stadiums, Mayor Richard Riordan today will announce a strategy to attract $250 million in private capital to 15 key industrial and retail sites in the city’s poorest neighborhoods, in part by selling naming rights to big corporate sponsors who invest in the projects.

So far, Bank of America, Washington Mutual, Wells Fargo Bank and the Department of Water and Power have signed on as sponsors, committing up to $10 million each to the projects that could eventually bear their names, much as the Staples Center carries the name of its sponsor. The selling of naming rights to corporate backers of civic projects is not unusual, but city officials say they are the first to employ the tactic as a citywide strategy for economic development.

Riordan and Deputy Mayor Rocky Delgadillo previewed the strategy--two years in the making--to a group of reporters Tuesday. The targeted projects, projected to create 5,000 jobs, range from some of the most challenged abandoned swatches of the city to other sites already on the path to recovery.

Among them are Lancer Industrial Park, a 14-acre central city site now occupied by a community garden; the Cornfields, a 50-acre vacant site near Chinatown now in escrow; the recovering 208-acre Goodyear Tract Industrial Park in South Los Angeles; the $100-million Santa Barbara Plaza development in Crenshaw; and the 150-acre Taylor yard near Glendale, slated to be a $78-million gated office and industrial complex.

City officials identified 12 of the projects but are waiting to finalize deals with developers before announcing the remaining three, located in the San Fernando Valley, San Pedro and South Los Angeles. The aim is to create “catalytic” projects that cater to high-growth industries--developments that, once completed, will help decrease crime, spur nearby development and create jobs.

Riordan will formally announce the program in his so-called Economic Vision Address today at Magic Johnson Theatres at Baldwin Hills Crenshaw Plaza. The former basketball star’s Johnson Development Corp. is among the developers for the targeted Santa Barbara Plaza project across the street from his top-grossing theaters. The history of the theaters marks on a smaller scale what Riordan hopes to employ as city strategy--linking a developer in the community with corporate muscle, in Johnson’s case with the Sony Loews Theater Corp.

The strategy is classic Riordan, employing government as a matchmaker to lure private capital to work in market-driven projects. It involves no additional public money, although Riordan’s economic development staff will make the projects their “principal focus” for the remainder of the mayor’s term, Delgadillo said.

City staff will help channel existing public funds and tax incentives to the projects, and work to focus job training programs in the development areas to create a ready work force, Delgadillo said.

Riordan said the strategy “accelerates” an approach he has employed throughout his tenure. Development of the shuttered General Motors plant in Panorama City, for example, contributed to a turnaround of Blythe Street, long one of the most blighted stretches of the San Fernando Valley.

“It shows that we care about these areas and more importantly that private industry cares,” Riordan said. “To the extent that we can make them successful, it would encourage other investment” in these areas.

Corporate sponsors who seek naming rights to the projects will benefit by “all that attention paid to their logo and their name,” Delgadillo said, but the commitments will go beyond sponsorship to investment. “It’s really a market-driven project,” he said. “These equity investors expect a market return.”

The sponsors who have signed on so far have not yet finalized their commitments to specific sites but will pledge “up to $10 million” each to the projects, which Riordan hopes to launch before the end of his term. Delgadillo said the city hopes to see at least five of the projects completed before passing the torch.

Brenda Ross-Dulan, Wells Fargo vice president of community development, said the bank will focus on real estate equity investments, helping to spur additional private financing.

“The inner city in terms of commercial development has really gone unrecognized and unappreciated as a viable market, and we believe it is a viable market,” she said. “The real estate equity piece is something that’s missing to make some of these projects work. We believe that from a business standpoint of economic returns it’s a good place for us to be.”

Ross-Dulan applauded the city for “spearheading these initiatives.”

“When you’re able to revitalize one corner of what may have been an underserved area, that spurs business opportunities for everyone in the adjacent areas,” she said.

A mayoral advisory board, largely composed of private-sector heavy-hitters, is working to locate other corporate sponsors. Board members are Washington Mutual Chairman and Chief Executive Kerry Killinger, SunAmerica Inc. Vice Chairman Jay Wintrob, Magic Johnson, Hill & Knowlton Inc. CEO Ron Hartwig, and La Opinion associate publisher Monica Lozano.

Riordan also is expected to lay out economic goals for the city in his speech today. Among the initiatives he is expected to announce are: funding to address the problem of roaming dogs, creation of a task force to deal with abandoned buildings, and a proposal to grant more street maintenance funding to older, more blighted council districts.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Economic Target Sites

Mayor Richard Riordan today will announce an economic development strategy to lure private investment capital to 15 key sites in the city’s poorest neighborhoods. City officials unveiled 12 of the target projects and are waiting to finalize deals with developers before announcing the remaining three. The projects range from vacant lots to developments already underway.

* Taylor yard: 150-acre site near Glendale under development as Los Angeles Media Tech Center; geared to entertainment-related firms.

* The Cornfields: Vacant 50-acre site near Chinatown; currently owned by Union Pacific Corp. and now in escrow with a local developer.

* North Hollywood studios: 28-acre site north of the Academy of Television Arts and Sciences. Development proposals call for a mix of sound stages, office and retail space.

* Santa Barbara Plaza: Redevelopment of 19.7-acre retail site across from Crenshaw Baldwin Hills Plaza.

* Auto Club: Historic building in Figueroa Corridor adjacent to USC’s multimedia incubator. Automobile Club of Southern California owns the property. Site could be developed as a multimedia/entertainment facility.

* Vermont/Slauson: Commercial/retail site at Vermont and Slauson avenues, owned by Vermont Slauson Economic Development Corp. A Latino-owned supermarket is proposed as the anchor tenant.

* Lancer Industrial Park: 14-acre site in Alameda Corridor in central city, owned by the Harbor Department and now occupied by a community garden.

* Goodyear Tract Industrial Park: 208-acre site in South Los Angeles, one of the largest contiguous industrial sites in the city. Private and federally funded improvements underway.

* Adams/La Brea Development: 26-acre site south of Santa Monica Freeway; retail development proposed.

* Sears: 31-acre East Los Angeles site, one of the department store chain’s most successful stores. Goal is to revitalize the site and bring in additional retailers.

* UPS site: 24-acre industrial property at Lugo and South Soto streets. Out-of-state manufacturer interested.

* Prison site: Vacant 20-acre state-owned site originally slated for a prison but opposed by local residents. City acquired option to buy the property. Suggested use: production of photovoltaic energy.