Council, mayor will direct air rights funds

The law recently approved by Los Angeles officials to sell so-called air rights to downtown developers gives the mayor and City Council final say over how the projected $200 million would be spent.

The deal allows the city to sell 9 million square feet of theoretical space over the sprawling Los Angeles Convention Center. Although city zoning laws allowed builders to go much higher, the center is just three stories high.

Now the city can sell that unused space to developers whose projects may be restrained by density limits.

How much of that space sells, if any, remains to be seen. Buildings downtown still must conform with the city’s zoning laws and, generally speaking, it is difficult for builders to go very tall without assembling a large swath of land.

Deep in the ordinance that authorizes the deal is the key phrase: Ultimately the use of the money will be determined by the City Council and the mayor.

That means it could be spent to buy land for a new park or to build a downtown streetcar system. Or it could be spent on improvements or mitigations that a developer would ordinarily have to pay for out of their own pockets.

“I agree that we have to be very alert about the fund, because using it for something else would undermine the integrity of the program,” said Councilwoman Jan Perry, whose district will probably benefit the most from the deal because the “air rights” revenue would have to be spent within a radius of two miles.

“I’m always worried about misuse of city funds,” Perry said, “but I do think what helps here is that the funds must be used near the Convention Center.”

Perry will probably have a big say in how most of the money is spent. The new law calls for a committee of community members and bureaucrats to first vet spending proposals, then give the council and mayor ultimate approval.

The committee must include the council member who represents the source and the destination of the air rights. That guarantees Perry a say because the Convention Center is in her district. The two-mile limit makes it likely that the air rights will be bought for projects in her district.

Perry said she intends to set up a working group to study the best way to determine how to spend the money, assuming developers begin buying air rights. She expects the air rights to sell over many years.

Councilman Jose Huizar, whose district includes parts of eastern downtown, sees a benefit with the money but also is cautious. “In my year on the council, I’ve seen a lot of money dedicated for certain things go somewhere else,” Huizar said.

The ordinance also allows for 15% of the fund to be used for administrative purposes. Otherwise, the law provides a list of items that the money should be spent on, including affordable housing, open space, historic preservation, public facilities, job training programs, affordable child care, street-scape improvements, public arts programs, programs for the homeless or public transportation.

One reason the deal is so attractive to city officials is that the city has relatively little money for capital improvement projects.

That is the reason, for example, the city can afford to fix only a tiny fraction of its sidewalks and roads each year.

When a big project becomes necessary, the city usually has to borrow heavily to pay for it -- an example is the new $40-million elephant exhibit at the zoo -- or somehow persuade the state and federal governments to fund it. Neither route is easy.

Many downtown residents say they are excited that the city may have new money to spend, and already a debate has begun over how to use the funds.

“I think there will be a lot of eyes on this money and I feel very comfortable that the people here -- particularly Jan Perry -- understands what downtown needs,” said Eric Richardson, a member of the Downtown Los Angeles Neighborhood Council who also runs the website www.blogdowntown.com.

Richardson would like to see some of the money used for affordable housing and possibly to buy an open lot for a future park, particularly in the South Park area, which is being rapidly developed.

Russell Brown, the downtown council’s president, said his concern is that the city may use the money for maintenance instead of true public upgrades.

“I think this could be an amazing opportunity,” Brown said. “But it needs to be thought out. If it gives downtown options they don’t presently have, that could be great -- if the money is well managed.”

Brown and Carol Schatz, president of the Central City Assn., said money would be well spent on public transportation that would tie together emerging downtown neighborhoods.

Schatz, in particular, said she favors using some money on a downtown streetcar system that has been under study by the Community Redevelopment Agency.

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steve.hymon@latimes.com