Los Angeles redevelopment commissioners agreed Thursday to spend up to $52 million to build parking and other improvements around billionaire Eli Broad's planned downtown art museum, an action characterized by some as an attempt to keep future tax dollars out of state hands.
The deal was put together so quickly that the final agreement was still being drafted as the commission, which oversees the Community Redevelopment Agency, prepared to cast votes.
Initially, commissioners were asked to vote without reviewing it. But they backtracked after one commissioner, Madeline Janis, said it was unwise to move so quickly without first seeing an agreement in writing.
Three other commissioners responded by voting instead to authorize their chief executive to negotiate a deal by Tuesday, when it comes up for final vote before the City Council. Janis still voted no and even two commissioners who favored the deal complained of "hastiness" and a lack of transparency.
The move comes as cities across California have been rushing to tie up funds after Gov. Jerry Brown proposed eliminating redevelopment agencies as he seeks to close a $25.4-billion hole in the state budget. Brown, who wants to send that money to school districts and counties instead, would take $1.7 billion from those agencies this year.
Brown's proposal faces a battle in the Legislature and has prompted dozens of city redevelopment agencies in the last few days to rush to create new debt agreements or lock in debt they already have.
Under the plan, the Broad Collection, which is developing the museum, would meet the agency's goal of building a parking garage, new sidewalks and a pedestrian plaza on Grand Avenue just south of Walt Disney Concert Hall. The improvements would also be available for other nearby redevelopment projects. The agency would then gain ownership of the public areas by reimbursing Broad for the construction costs by tapping future tax revenue.
A previous agreement, approved in July, would have required the redevelopment agency to make an upfront payment of $8 million to the Broad Collection. Another $22 million would have been paid in future years using property tax revenue.
The deal now heading to the council requires the agency to pay even more, mostly for a larger, better designed garage and the plaza. It would provide the Broad Collection $22 million by the time the garage is completed and up to $30 million more in the future, said Community Redevelopment Agency spokesman Jim Dantona.
"Essentially, the museum is taking the risk that we will exist and that there will be money" to pay back that $30 million, he said.
The move follows a decision Friday by the redevelopment board to shield another $930 million from the state, including the money earmarked Thursday for the museum garage. That vote has not been confirmed by the council.
Officials offered various explanations for why the agency needed to move so quickly on the new agreement.
David Riccitiello, the agency's regional administrator for the downtown area, said the agency needed to move quickly because Broad planned to break ground on his museum within 60 to 90 days and hopes to open in 2013. The new plan, Riccitiello said, would increase the number of spaces within the proposed garage and provide pedestrians more direct access to a nearby planned subway station.
Riccitiello said there was no link between the new museum agreement and the state budget crisis. But Dantona, the agency's spokesman, said the board also needed to move quickly because of the "cloud" over its future in Sacramento.
"In light of the state budget discussions, we wanted to make sure that we dealt with these amendments" to the city's agreement with the museum, he wrote in an e-mail.
All the public improvements around the museum are expected to cost roughly $46 million, while the remainder would cover the city's interest payments, redevelopment officials said.
Lincoln Heights resident Mike Kolker, who serves on a redevelopment agency committee that deals with Eastside neighborhoods, said it was wrong to use taxpayer money to improve the area around the planned museum at a time when public services are being cut. He said he favored Brown's plan to eliminate redevelopment statewide and argued that the city is trying to do an end-run.
"They want to get as much funding allocated before the governor clamps down," he said.