Downtown Plan Faces County Suit

Los Angeles County supervisors voted unanimously Tuesday to sue the city government for approving a massive downtown redevelopment district that would play a key role in plans to build a $450-million football stadium near Staples Center.

The lawsuit, which the county’s lawyer said would be prepared and filed as soon as possible, puts top city and county officials in conflict over the best use of the downtown area and over the tax revenue generated by those neighborhoods. County supervisors said they would not follow through on their litigation threat if the city rescinded approval of the redevelopment area.

Los Angeles Mayor James K. Hahn denounced the supervisors’ vote.

County Supervisor Zev Yaroslavsky, a former city councilman, said city officials were using the redevelopment area to steer money to wealthy businessmen trying to build a football stadium.

In addition to thwarting the stadium proponents’ mechanism to condemn and acquire land for the 20-acre project, the lawsuit could block efforts to create thousands of homes and jobs in 180 blighted city blocks, city officials said.

Supervisors, however, complained that the redevelopment area is a tax giveaway that will deprive the county of money for programs such as cash-strapped public hospitals.

“The low-income housing part of this is used as a fig leaf to camouflage a subsidy for high-income developers,” Yaroslavsky said. “This is the oldest game in the book, and we’re not going to sit back and take it.”

The Board of Supervisors voted 5 to 0 in closed session to authorize the suit unless the city rescinds the $2.4-billion redevelopment plan. County Counsel Lloyd W. Pellman said county attorneys will draft a complaint “right away.”

The City Center plan, approved earlier this month by the City Council, is supposed to create up to 12,900 new homes, thousands of jobs, and millions of square feet of commercial and economic development.

The 879-acre district includes the South Park, historic downtown and City Market neighborhoods. If the 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.

Supervisors said that over the next 45 years, the plan would sap the county of more than $250 million in new property tax revenue--enough to fund 14 hospital beds annually--from land that they maintain should have not been included in the district. The land is primarily 30 acres of parking lots near Staples Center that are slated to be turned into a $1-billion sports and entertainment district.

Some supervisors also argued that the Los Angeles Memorial Coliseum, in Exposition Park, was a better facility for a new NFL team. The supervisors have partial control over the Coliseum through their seats on the Coliseum Commission, but the NFL has previously rejected bringing football back to that stadium.

County officials met Monday with Mayor Hahn, Councilwoman Jan Perry and others about their concerns. Hahn’s office said the mayor was willing to negotiate but was rejected.

“This is why taxpayers are fed up with government,” he said through a spokeswoman. “On the advice of its lawyers, the county is attempting to use taxpayers’ dollars to prevent the city from creating new affordable housing, services for the homeless and economic development in a part of the city that has one of the greatest needs.”

However, Supervisor Gloria Molina said it is impossible to negotiate with a plan already in place. “We weren’t negotiating from an equal basis. The only way we can negotiate is for him to rescind the [redevelopment district], which he refused to do,” she said.

Perry called the vote “unfortunate,” but said she hopes the county and the city can work out their differences.

CRA spokeswoman Kiara Harris agreed. “The agency hopes to continue to work with the county to find a solution that will be acceptable for all parties involved,” she said.

However, other city officials said the move shows that the fast-tracked plan did not receive enough scrutiny.

“This is further evidence that the council acted too quickly to do too much with too little input from the public and other government agencies,” said Councilman Jack Weiss, one of three council members opposed to the plan.

“As I understand it, the stated purpose of redevelopment is to help the less fortunate,” he said. “It would be cruel irony if redevelopment here were being used to benefit the haves at the expense of the truly needy in our society who are the recipients of public [aid from] the county.”

The redevelopment plan--similar to one used to create Staples Center--is considered key to building the 64,000-seat football stadium in South Park.

The CRA is the only city agency that has the power of eminent domain. It also could float up to $100 million in low-interest municipal bonds to pay for land that would be repaid by the stadium developers. Both moves are necessary to make the stadium viable.

Tim Leiweke, president of Anschutz Entertainment Group and one of four stadium principals, had said previously that the agency is the “one entity in the city that is going to play a key role” in making the proposal work. AEG was founded by Denver billionaire Philip Anschutz.

Leiweke, L.A. Avengers owner Casey Wasserman, supermarket mogul Ron Burkle and developer Ed Roski hope to reach agreements with the city, the National Football League and a team within a year.

Leiweke declined to comment Tuesday on the dispute.

And CRA officials declined to comment on how the lawsuit would affect implementation of the City Center plan.

Speaking generally, however, deputy administrator Don Spivack has said that progress on such areas can be adversely affected by litigation.

“Once we get sued,” he said before the vote, “there are limits on what we can do. We’re not necessarily stopped from doing any work.”

However, “it is generally most prudent to not undertake certain activities that are irreversible, like acquiring property from funds that may not have been received or finally certified,” he said.