SACRAMENTO — State officials Friday earmarked $30 million in voter-approved housing bonds for a group with ties to Staples Center owner Philip Anschutz, for sprucing up the street next to his multibillion-dollar entertainment projects in downtown Los Angeles.
Legislation governing access to the bond money, and tailored to Anschutz's purpose, passed just hours before lawmakers adjourned last year. The funds come from a pot of $2.8 billion that voters gave the state permission to borrow for affordable housing in California.
Nearly 100 affordable-housing projects in needy neighborhoods were among the applications that were not recommended in the first round of funding Friday by state housing agency staff, whose choices are routinely ratified by a grant panel.
Backers of the Anschutz-related group, the South Park Business and Community Improvement District, said the bond money would help the ongoing revitalization of the Figueroa Street corridor, which has pockets of blight.
"It will be tremendous for the area," said Cliff Hoffman, chairman of the board of the South Park business group.
Advocates for affordable housing objected to funding for the Staples area. Voters intended the bonds to provide affordable housing to help low-income residents, they said, not to improve the marketability of the billionaire Anschutz's pricey downtown attractions.
One project put on a waiting list for possible funding would help support a housing project in the Boyle Heights area.
"It's extremely disappointing that underserved areas don't seem to be able to compete, while really well-financed entities are able to get these public subsidies," said Maria Cabildo, president of the East Los Angeles Community Corp. "These dollars should go where the need is, and that area doesn't seem to have the same need."
Anschutz, who owns a share of the Lakers, was ranked 41st on the most recent Forbes list of wealthiest Americans, with a net worth of $7.6 billion. L.A. Live, a $2.5-billion, 4-million-square-foot development under construction at Figueroa Street and Olympic Boulevard, is owned by Anschutz Entertainment Group, also known as AEG.
The project, which is subsidized by the city, includes the new Nokia Theatre and is slated to also feature a 54-story luxury hotel and condo tower, broadcast facilities, a 15-screen movie theater and nearly a dozen restaurants and clubs.
AEG spokesman Michael Roth sought to distance his firm from the $30 million.
"The money isn't coming to us," Roth said. "We will wait to see how the [business district] spends it."
AEG and L.A. Live are the biggest source of funding for the South Park business district, the organization that applied for the grant with the Los Angeles Redevelopment Agency. The secretary-treasurer for South Park's board of directors is Lisa Herzlich, managing director of AEG's L.A. Live project.
Business improvement districts were not eligible for the housing money until the state Senate voted after midnight on its final day in session last year to approve a that allows such groups to compete. The bill, sponsored by AEG, was signed into law by Gov. Arnold Schwarzenegger.
Firms and executives affiliated with Anschutz have donated $2.7 million to political causes in California in the last five years, including $583,000 to Schwarzenegger's campaign accounts.
South Park's grant application proposed spending the $30 million on "streetscape" improvements along a three-mile stretch of Figueroa Street that includes the AEG properties. The improvements are sidewalks, lights, curbs and other features. Two million dollars would be spent improving the Los Angeles Convention Center plaza near Staples Center.
The application said that at least 500 residential units are planned for the area and the improvements are needed for them.
For the first round of funding, the state Department of Housing and Community Development sought applications for $240 million of the bond money aimed at improving streets, sewers, parks and other infrastructure to support affordable housing projects.
Of 124 applications received, 38 were http:// for funding. Several are for projects in Southern California. They included two street improvement plans for MacArthur Park, one on Grand Avenue, another for Blossom Plaza in Los Angeles' Chinatown and a Transit Village proposed in El Monte.
The state grants panel is to vote on the recommendations Thursday. Lynn Jacobs, director of the state housing agency and a Schwarzenegger appointee, must sign off on the panel's vote before the grants are awarded.
"These projects will not only create housing but will also support local economies through construction-related activities and the jobs they create," Jacobs said Friday.
State officials said they rated each project according to viability and community need in an effort to keep politics out of the process.