The city plans to spend $90 million on its share of a two-block Hollywood development that officials hope will jump-start revitalization efforts.
Releasing the details of a development deal that will go before the City Council later this month, city leaders said the Los Angeles Community Redevelopment Agency will put up $60 million to build an underground parking garage and $30 million toward construction of a live-broadcast theater that will be home to the Academy Awards ceremony.
The agreement caps a year of negotiations with Toronto-based TrizecHahn Corp., which is proposing to build a massive retail-entertainment complex next to Mann's Chinese Theatre, one of Los Angeles' biggest tourist draws.
The Hollywood Boulevard site has long attracted redevelopment interest and is seen as key to reviving an area that has been an embarrassment to locals and a disappointment to visitors for decades.
"The project is the linchpin to Hollywood's future vitality," said Councilwoman Jackie Goldberg, who, along with Mayor Richard Riordan, enthusiastically backs it.
Under the agreement, which the CRA board will vote on next week, the city would own the 3,000-space garage and the theater. Construction money would come from municipal bonds, to be repaid with tax revenues from the project.
Citing the role that public parking has played in the success of Old Pasadena and Santa Monica's Third Street Promenade, Goldberg said it is vital that the city improve parking in Hollywood, which attracts more than 9 million visitors a year.
Although the city is contributing handsomely to the development, both Goldberg and Deputy Mayor Rockard Delgadillo emphasized the city's ownership stake.
"It's a model. We're contributing to the project but we're buying assets," Delgadillo said. "We've got something at the end of the day that a city would love to have anyway: a parking structure and a theater. . . . We have a home for the Oscars in Hollywood."
While there have been neighborhood concerns about the project's still-evolving design and its impact on intersections already clogged at rush hour, the development has generally been welcomed.
"This is sort of making Hollywood into what it should be," said Jack Kyser of the nonprofit Economic Development Corp. of Los Angeles.
Of the city's role in the theater, he said: "To some this might seem like an unusual investment. But to me it looks like a very, very savvy deal, because you are reclaiming what no one else can knock off. . . . If this is pulled together right, it can be very, very powerful as a tourist attraction."
With the Hollywood sign as a backdrop and Mann's Chinese, the El Capitan theater and entertainment museums nearby, the development should create a critical mass of attractions, Kyser said.
TrizecHahn has said its retail segment will be an upscale counter to the T-shirt and trinket shops on Hollywood Boulevard.
David Malmuth, TrizecHahn senior vice president and a former Disney executive involved in that firm's redevelopment projects in New York's Times Square area, said discussions are underway with major studios to open commercial outlets in the project.
Also envisioned are restaurants, clothing shops, broadcast studios from which live television shows can be beamed, a cinema multiplex and a club for live music. Possible uses for the academy theater include live theatrical productions, holiday specials and programs on entertainment industry history.
Under the CRA deal, TrizecHahn would operate the academy theater, pay the city $12.5 million in license fees over 20 years and be responsible for operating costs. At least initially, the firm would guarantee the city's debt payments on the theater. If city revenues from the project reached a certain level after seven years, the company could be released from that obligation. All told, TrizecHahn plans to spend $260 million on the development, which the CRA estimates would bring more than $7 million annually in new tax revenues to the city by 2003.