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Bargaining for the Sky : Buying Air Rights Is Down to Earth Way to Get More Use Out of Land

August 29, 1988|NANCY RIVERA BROOKS | Times Staff Writer

A CRA task force is developing a procedure on how to value air rights, either in cash or public benefits. Such things have been decided on a case-by-case basis.

In the category of public benefits, a developer could be required to provide such things as low-income housing, child care, transportation, cultural facilities, open space or historic preservation, Tuite said.

As part of the recent transfer of air rights from the Central Library to two nearby office towers, Maguire Thomas Partners of Santa Monica agreed to provide about $76 million in public benefits in addition to the $51 million paid for the air rights.

They included footing part of the bill for the renovation of the library as well as a major art project that features a cascading water garden and staircase called the Bunker Hill Steps that will link the Bunker Hill area with the 73-story Library Tower, which recently changed its name to First Interstate World Center in honor of its largest future tenant.

Air rights of a different sort were employed in the construction of the Business Arts Plaza in Burbank, which was built two years ago on a 30,000-square-foot triangular piece of land that limited parking options.

A Planning Tool

"The most effective parking structures are these big rectangular jobs that go on and on and on," said James M. Luckman, whose firm, Luckman Partnership, designed the building. To solve the problem, a rectangular parking structure was built using air rights underneath the adjacent block of Riverside Drive. (Generally, air rights are defined as above ground, but in a few cases subterranean areas have been labeled "air rights.)

The transfer of air rights "is a tool that very much is a planning tool and one that isn't used extensively," Tuite said. "The city is interested in jobs, which add to the economic base of the city. . . . However, additional development has an impact on the city" that the CRA attempts to mitigate by requiring the public benefits.

The development community seems to acquiesce to the CRA's requirements as the price of building in downtown.

"It's a cost of doing business," said Ray Watt, chairman of Watt Industries, a well-known home builder that is planning its first downtown development, an office-retail-parking complex on the Thomas Cadillac site. The parcel, however, is west of the Harbor Freeway and is free of the CRA's control.

Freeway air space is leased for terms up to 99 years, but most leases are much shorter, said Richard M. Robison, Caltrans chief of right of way for Los Angeles and Ventura counties.

Those three counties have 121 leases, of which about 31 are long term with buildings on those parcels. Of the roughly $10 million California derives from freeway leases, about $2.6 million comes from Los Angeles and Ventura counties.

Many of the buildings are industrial, although air space is leased to a hotel next to the Hollywood Freeway and a restaurant at the interchange of the Glendale and Ventura freeways, Robison said.

More unusual examples can be found elsewhere, like the hotel-casino complex that straddles a highway in Reno. In Southern California, "right now you don't see buildings over freeways, but you will some day," Robison said.

Some Public Projects

As a site for affordable housing, air rights and air space have been used only sparingly in Southern California. Many doubt that the Southland will see such projects in any number until the cities become much more densely populated and land becomes much more scarce.

So far, they have been public projects such as the 150-unit apartment complex for the elderly that was built in Beverly Hills three years ago over five stories of underground parking and one level of retail space.

The CRA has not yet required specific low-income housing projects as part of a transfer of air rights, but has used other methods to replace housing destroyed downtown by redevelopment.

But since 1984, the agency has required developers in downtown's South Park area to pay into a housing trust fund as part of an exchange of excess air rights. The CRA hopes to pay for 500 units of low-income housing in South Park with the fund, an agency spokeswoman said.

Using air rights to create affordable housing should be considered, but only as part of an array of tools, said John Ochoa, executive director of the Greater Los Angeles Partnership for the Homeless.

"By itself, to raise it as a hope or a panacea not being part of a strategic plan, it becomes too isolated," he said, adding that the proximity of housing, transportation, schools and day care must also be addressed. "It intrigues me as long as it's one of a listing of other options in a public policy perspective."

There are significant roadblocks to locating affordable housing above commercial projects or in the air space above freeways or other structures.

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