County Files Suit to Block Redevelopment Plan for Downtown

Los Angeles County has filed a lawsuit to stop the city’s massive downtown redevelopment plan, alleging it will illegally deprive the county of $278 million in taxes. The move could create a major obstacle for backers of a $1-billion hotel and entertainment district.

Though the primary conflict is over 30 acres of parking lots near Staples Center, the lawsuit jeopardizes the entire 879-acre City Center redevelopment project, which is supposed to create thousands of jobs and low- and medium-income homes, and millions of square feet of commercial space.

Supervisors, who voted to sue in late May, complained that the redevelopment area is a tax giveaway that will deprive the county of money for programs such as cash-strapped public hospitals.

“This is a heist of county money,” said Supervisor Zev Yaroslavsky. “Over its lifetime, this will cost us [more than] a quarter of a billion dollars in lost revenue. That’s just unacceptable.”

City officials have said the plan is necessary to revitalize the South Park, Historic Downtown and City Markets neighborhoods.

“I am disappointed that the County of Los Angeles has chosen to use taxpayer dollars to block urban redevelopment,” Mayor James K. Hahn said. “This lawsuit will delay our efforts to build affordable housing and eliminate blight in an area that sorely needs this kind of development.”

Councilwoman Jan Perry, who represents the area, said she thought the area was well thought out but remained hopeful that the city and county would resolve their differences. “We all have the same goals, which is to build more housing in the redevelopment area, particularly for people who are homeless,” she said.

Councilman Dennis Zine, one of three members to oppose the plan, said the proposal was a “bait-and-switch” that was presented as a way to help the poor while the real beneficiaries would be private developers.

The City Council approved the City Center plan in May, and the county voted to sue a week later. The papers were filed in Los Angeles Superior Court on Tuesday.

If the entertainment district stands, the city’s Community Redevelopment Agency will receive 60% of future property tax revenue on the condition that it invest the money in the district. Twenty percent would go into a housing trust fund, and the remaining 20% would go to the normal taxing entities: the city, county, Los Angeles Unified School District and community college district.

CRA officials declined to comment on the lawsuit because they hadn’t yet received it.

Supervisors said that over the next 45 years, the plan would deprive the county of $278 million in new property tax revenue.

The 30 acres--the primary conflict between the city and the county--is composed of parking lots slated to be turned into a $1-billion entertainment and sports district by the Anschutz Entertainment Group. The land will include a 1,200-room hotel that would serve the convention center, a 600-room hotel, 1.1 million square feet of retail, entertainment and restaurants, a 7,000-seat theater, 800 homes, 300,000 square feet of office space and parking. The hotels are viewed as the only way to improve the fortunes of the struggling Convention Center.

Anschutz officials declined to comment on the suit Wednesday, but the threat of legal action was one of the reasons the group gave two weeks ago for abandoning its plans to build a 64,000-seat football stadium in South Park.

Yaroslavsky said the only reason the city included the land in the district was to get more property tax revenue at the county’s expense.

But others are not so sure. A consultant’s study says that the area will need $67 million to $115 million in public subsidies, which could be provided through the redevelopment plan.