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Santa Monica OKs Financing for 3rd St. Mall Revitalization

August 21, 1986|JAY GOLDMAN | Times Staff Writer

The Santa Monica City Council has approved a $13-million financing plan to pay for revitalization of the Third Street Mall, ensuring that work will begin next summer to rebuild parts of the mall and increase parking to attract customers and investors to the economically depressed area.

"The revitalization of the mall will give the city a real downtown . . . ," Councilman Dennis Zane said.

The Third Street Mall, three blocks of shops and offices in downtown Santa Monica, was opened in 1965. It prospered through the 1960s but declined in the 1970s. When Santa Monica Place, a large, indoor shopping center, was built in 1980, mall business further deteriorated.

Public comments from speakers among the almost 100 people attending Tuesdays' council meeting centered on responsibility for payment and the amount needed.

The plan is to be financed with a $13-million bond issue, with the city paying an additional $3 million to retire existing debt on the mall.

To pay for the bond issue, property owners will be assessed a fee, based on the size of their buildings, for 30 years. Business tenants, who will also face an increase in business license taxes to help pay for maintenance, are concerned that property owners will pass on the assessments to them in the form of rent increases at a time when they fear their business will decrease because of construction on the mall.

Zane sought to defer assessment payments, which are scheduled to start in 18 months, for an additional year. Construction should be completed by September, 1989.

But an attorney for the city said that it would be illegal to change the plan without issuing a 30-day notice. This would push the city past a Sept. 1 deadline beyond which it could not take advantage of current, favorable federal tax laws regulating the sale of bonds.

Zane and the council approved the assessment plan but directed city staff to return with a report on options for deferring assessment payments for tenants whose businesses would be disrupted by mall construction.

Sylvia Gentile, a mall tenant who helped form the Third Street Mall Tenants Alliance to fight the financing plan, was unhappy with the council's action.

"They don't have any idea about the negative effect there will be on the tenants," she said. She added that without the deferment many tenants would move out of the mall.

Ernesto Flores, manager of the city's economic development division, said that because of lower than anticipated interest rates for the city's bonds, assessments will drop to a range of 96 cents to 30 cents per square foot of building space from the previously estimated $1.07 to 33 cents per square foot.

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