NoHo Project Backed for More Public Funding

Hoping to revive the blighted commercial core of North Hollywood, a city panel recommended Wednesday that $43.9 million in government loans and subsidies be provided to help pay for the NoHo Commons residential and commercial development.

The public contribution to the $218.7-million private development project near the Red Line subway station has ballooned in recent months from the $31 million approved by the Community Redevelopment Agency board.

The new estimate includes money to cover potential losses the developer might incur if the project is not as profitable as projected.

The City Council’s Economic Development and Employment Committee, however, endorsed the project Wednesday after being assured that it also includes such community benefits as a large percentage of jobs that pay a living wage and a child-care center.

“This is another example of where we can have social benefits and economic development,” said Councilman Eric Garcetti, who chairs the committee.

A development partnership headed by builder J.H. Snyder has proposed 810 housing units--some of which would be live-in artist lofts--as well as 220,000 square feet of office space, a community health center and 228,000 square feet of shops and restaurants. A child-care center and parking for 3,461 vehicles are also part of the project, which would be built on 16.71 acres east of Lankershim Boulevard and south and east of the North Hollywood Red Line station.

The project would create 1,800 jobs.

“People will be able to live above space where they can work and shop,” Garcetti said. “It’s a tremendous model of an urban village that moves the community forward so it is worth the investment.”

The council panel’s endorsement comes days after the Metropolitan Transportation Authority authorized negotiations with another developer to build a similar mixed-use project on MTA land neighboring the redevelopment site.

“There haven’t been any major developments in that area in a very long time,” said Jerry Scharlin, administrator of the redevelopment agency. “This development, combined with the MTA development, should really create a catalyst for that community.”

North Hollywood activists who have seen other projects proposed and fail are especially critical of the large public subsidy.

“In view of the uncertain economic times we are facing, the question arises whether public money is being put at risk with this project and whether the project will be completed,” said Glenn Hoiby, an attorney and chairman of the anti-CRA group North Hollywood Concerned Citizens.

Because about $10.5 million of the subsidy would come from property tax revenue generated in the area, Hoiby said it would mean less money for such vital city services as police and fire protection.

When the CRA board approved the project Sept. 20, officials said the public contribution would be $31.7 million. Agency officials said $3.4 million added to the first estimate is a federal grant to be administered by the city for street improvements in the area. Another $5 million in property tax revenue was pledged to cover any shortfalls if the developer’s return on his investment drops below 10.4% in any given year.

The largest sum, $14 million, would provide a loan guarantee for the housing project.

About $3 million is proposed to buy properties for the project.

Because the project’s financing has changed, Scharlin said he will send it back to the redevelopment board for another vote before the full City Council considers it for final approval.

In partial exchange for the subsidies, the developer agreed to a package of community benefits requested by the Los Angeles Alliance for a New Economy, including a stipulation that 75% of tenant employees be paid a living wage set by the city.