A judge has ruled that Los Angeles city officials cannot collect more property taxes from a downtown business district for a new redevelopment program, jeopardizing city plans to revitalize the area by investing in residential and commercial projects.
Superior Court Judge Marvin M. Lager ruled Tuesday that the city's approval of the City Center redevelopment project area violated terms of a 1977 court settlement involving much of the same downtown property.
"It's unfortunate," said Doug Ring, a member of the board that oversees the Los Angeles Community Redevelopment Agency. "There are a lot of things we have been looking to do there and clearly this will not be helpful to that."
"It's a disappointment," said Councilwoman Jan Perry, who represents downtown. "In times like these, when revenue is at an all-time low and the homeless problem is still so incredibly significant, the opportunity to be able to collect tax in the area would have been of great benefit to the people in the community."
Ring said the CRA board will meet as early as today to consider whether the City Center redevelopment plan can be salvaged, either by redrawing the project area boundaries, working out a compromise or filing an appeal.
The city created the 879-acre City Center district in 2002. It called for spending $2.4 billion over 30 years to assist developers in the construction of 12,900 units of housing and 6.7 million square feet of commercial and industrial space, while also providing $150 million to help the homeless. The owners of Staples Center proposed that a pro football stadium be built near the arena, within the district's boundaries, but quickly dropped that plan.
The city ran into trouble with the court by including an area that was part of another redevelopment zone created in 1975, the Central Business District redevelopment district. After a lawsuit by then-Councilman Ernani Bernardi, the city entered into a court judgment in 1977 that limited the agency to receiving no more than $750 million in property tax revenue from the Central Business District to cover redevelopment costs. That cap was reached in 2000.
Los Angeles County sued to challenge the new City Center plan, alleging that the city improperly sought to transfer much of the old project area covered by the cap into the new area as a way of getting around the $750-million limit.
