Legislation approved in a post-midnight rush has positioned Anschutz Entertainment Group, a major political contributor and owner of Staples Center, to tap millions of dollars in state funds to spruce up the area near the downtown arena and the company’s $2.5-billion L.A. Live development.
The bill’s approval early Wednesday, only a few hours before the Legislature adjourned for the year, angered several lawmakers and advocates of affordable housing, including some who called for Gov. Arnold Schwarzenegger to veto it.
The legislation would allow the Anschutz firm, known as AEG, to apply through a public partnership with the city for a share of the $2.8-billion Proposition 1C bond money to put in street improvements around its development, with the idea that the work would help generate more affordable housing in the area.
The firm is hoping to secure $50 million in public funds, much of it from Proposition 1C, to pay for improvements along the Figueroa Street corridor, said AEG spokesman Michael Roth, who added that none of the money would go to the L.A. Live development site. That site is heavily subsidized.
However, some affordable-housing advocates said the bill’s language was tailored to help AEG, which they said has the clout, plans and ties to the city redevelopment agency to take better advantage of the state funds than other business groups.
“This unfairly gives them entree to have their projects subsidized,” said Paul Zimmerman, executive director of the Southern California Assn. of Non-Profit Housing.
“A major question,” he said, is whether a major corporation that owns part of the Lakers needs taxpayer subsidies to make affordable housing possible.
Firms affiliated with Denver billionaire Philip Anschutz have donated $927,000 to political causes in California since 2005, including $100,000 to Rebuilding California, a committee that campaigned for infrastructure bond measures that were pushed last year by Assembly Speaker Fabian Nuñez (D-Los Angeles) and Senate President Pro Tem Don Perata (D-Oakland).
AEG and affiliates reported donating $225,000 in the last three years to Schwarzenegger’s California Recovery Team and $50,000 to the campaign for a ballot measure, championed by the Democrats who control the Legislature, that would extend term limits for sitting lawmakers.
The donations also included $8,000 to the campaign committees of Sen. Mark Ridley-Thomas, who presented AB 1053 on the Senate floor.
Nuñez and Ridley-Thomas, chairman of the Senate Committee on Business, Professions and Economic Development, denied that the bill was an earmark for a campaign supporter, adding that the idea precedes AEG’s involvement.
Ridley-Thomas told his colleagues that the legislation was needed to help continue the revitalization of the Figueroa Street corridor, which stretches about three miles from Staples Center in downtown to the Los Angeles Memorial Coliseum in Exposition Park.
“This is a matter that has far-reaching implications for economic development for communities, in particular the Figueroa corridor,” Ridley-Thomas told his colleagues before the 22-15 vote to approve the legislation.
The bill was opposed by the bloc of Republican senators, including Dave Cox of Fair Oaks , who said it was changed too late for comfort.
“I just didn’t feel like we had enough time to analyze it,” he said.
Approved by voters last year, the housing bond money may be spent on parks and street improvements to help spark affordable-housing construction.
The legislation approved this week made business improvement districts -- public-private neighborhood entities that were created to revitalize commercial areas -- eligible to apply for the money.
AEG is part of an improvement district in downtown’s South Park area.
Roth, the AEG spokesman, said the firm would apply for the bond money to boost downtown as a whole, not L.A. Live, the massive retail, theater, residential and hotel project across the street from Staples Center.
“We’re applying for downtown infrastructure and all these changes that can help Figueroa,” Roth said. “We’re paying 100% for all the improvements that are happening around L.A. Live. But as committed stakeholders working with other stakeholders, we feel that this is the best way to join others in investing in improving the Figueroa corridor and other areas around downtown.”
Los Angeles Community Redevelopment Agency General Manager Cecilia Estolano said Wednesday that she had met with AEG officials several weeks ago to discuss the bill.
“They have an ambitious proposal for street-scapes and a park and a very broad vision of how the Figueroa corridor can be enhanced,” Estolano said.
Among the street-scape improvements that AEG has been discussing is a park built partially above the 110 Freeway, she said.
Although AEG sponsored the legislation, Nuñez and Ridley-Thomas indicated that the bill was an important economic tool available to any of the 58 business improvement districts in the state.
“What they are being made eligible for is to apply. We are not earmarking anything,” said Steve Maviglio, a spokesman for Nuñez.
He countered the criticism from affordable-housing advocates, saying that AEG and its partners have a strong record of providing affordable housing, and that kind of housing must be provided by any project awarded the state funds.
“Unfortunately, some of these advocates are not used to competition,” Maviglio said.
However, the head of the non-profit advocacy group Housing California said Nuñez’s bill diverts money from under-funded affordable-housing projects to an area booming with expensive loft and condo developments.
“I’m very disappointed. It rankles,” said Julie Spezia, executive director of Housing California. “To have money go to support more high-end development flies in the face of what they said Proposition 1C was all about, providing affordable housing. They subverted it to a project that doesn’t need the money.”
Since the 1999 opening of the city-subsidized Staples Center, the area around it, known as South Park, has gone through a major economic boom, with more than 3,500 residential units being created and about 5,400 more planned for the next three years. Ralphs recently opened a grocery store in the neighborhood, which also will soon get a Cold Stone Creamery, a multiplex movie theater and a concert hall that will host the Eagles when it opens.
AEG has used its political clout in the past to secure huge taxpayer subsidies for its Los Angeles projects.
The Los Angeles City Council has approved a plan to give AEG a rebate of at least $246 million in bed taxes from a 54-story hotel it is building next to Staples Center and to provide the project with a $5-million grant from the city redevelopment agency and a rebate of $4 million in building permit fees.