Hollywood's Catered Stimulus

Viewed as a “bridge,” the money spent in Hollywood begins to make more sense, since it is aimed mostly at maintaining public services, not at creating jobs or growth.

The area from Franklin Avenue south to Beverly Boulevard and from Western Avenue west to Robertson Boulevard, which includes the Hollywood area and most of the city of West Hollywood, has grabbed $18 million in ARRA grants, along with $5.2 million in loans and a $78,232 contract.

Illustration by Grant Gilliland

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• American Recovery and Reinvestment Act
• Tony Garcia
• Recovery.gov
• Politics
• Labor Market

Of that total, $4.4 million goes to a very rich and upscale recipient, Cedars-Sinai Medical Center: one grant for research on stem cells from the intervertebral disc and another to look into tumor targeting with protein-DNA drug carriers. Despite the weighty sound of the research, and the possible value of it years down the road, the research saves or creates only seven jobs.

The city of West Hollywood is getting $1.5 million for highway infrastructure and energy efficiency. The energy-efficiency piece, which accounts for only $161,000 of the total, would create a mere two jobs.

That’s why in all, page 593 of the Thomas Guide is promised 20.57 jobs. Other purported engines of job growth include $708,591 in rental-assistance payments to Hollywood Limited Partnership, which is listed as creating just three jobs.

How do rental-assistance payments create three jobs? L.A. Weekly was unable to find any company operating under the name “Hollywood Grove Limited Partnership,” and there is no Hollywood Grove apartment building operating on the stretch of Lemon Grove Avenue listed at recovery.gov.

Another three-job creator, according to the Office of Recovery Implementation, which operates under Vice President Joseph Biden, is a $25,000 grant that is said to be going to Techentin Projects at Hollywood Boulevard and Wilcox Avenue, in the heart of unemployment-ravaged Hollywood proper.

“I wish!” says architect Warren Techentin, when asked about the grant. “Techentin Projects doesn’t exist anymore.”

The grant is legitimate, but it is actually going to Los Angeles Forum for Architecture and Urban Design, a nonprofit for which Techentin used to serve as president. (The confusion arose from paperwork errors by the National Endowment for the Arts, which awarded the grant.)

Esmeralda Ward, L.A. Forum’s vice president of finance, explains that the funds will be used for administrative support and to bring in a consultant to do some recording of its institutional memory. Asked how $25,000 will create three new jobs, she explains that in fact, it won’t: “They’re all part-time jobs; we’re not creating any full-time positions.” The Office of Recovery Implementation, however, lists these as three full-time jobs.

But Hollywood’s two biggest stimulus-money recipients, the very rich Legacy Partners Hollywood & Vine and the nonprofit Swansea Park Senior Apartments, are not creating any jobs with their federal stimulus funds.

Legacy Partners is the developer of the massive W Hotel project at Hollywood and Vine. The W project, which has been attacked for a deal in which the city allowed it to include very large billboard spaces, is nearing completion and does seem like a shovel-ready project. Yet according to the White House, the $10 million investment will create zero jobs.

Legacy Partners did not respond to interview requests regarding its take of federal stimulus funds in the amount of $10.2 million.

Zoe Ellas, who applied for Swansea Park’s $8.8 million grant, explains that this is a “cash-in-lieu” fund designed to replace tax-credit funds that would have been coming to the owners of the 120-tenant, low-income, senior housing complex on Kingsley Drive — that is, before the recession severely hurt that form of investing in such housing.

The nonprofit management of the Swansea Park complex had been selling tax credits to investors, as well as lining up financing for several years, but the lengthy recession scared away many investors.

“In an ordinary year,” Ellas says, “a tax-credit investor will say, ‘We’ll give you this much cash in exchange for 10 years of tax credits.’ ” But, she says, in the last year and a half, the typical offer from an investor has “gone from 96 cents on the dollar to 70 cents on the dollar if you’re lucky. So it translates directly into less money.” The stimulus funds, she says, are being used to cover that gap.

Again, there is confusion from the feds as to the nature of this spending. Ellas says the stimulus money is a loan, but the Office of Recovery Implementation lists it as a grant.

As these examples indicate, the quality of the information available on stimulus funds flowing to L.A. projects and jobs creation is unreliable. But while the claims from Washington about the “unprecedented” transparency afforded by recovery.gov are exaggerated (similar systems have been in place to track earmarks, for example, for several years), on the other hand, the stimulus payments are being subjected to a relatively high level of public scrutiny by local officials in Southern California and other areas.

“This was a monumental logistical task,” says Scott Wiles, special assistant to L.A. County Deputy CEO Ellen Sandt. “They got the recovery.gov site up, and got the federal reporting site up, which allows you to categorically search the material. It was a lot of work for us to get ready for it. All the departments receiving stimulus funds have had dedicated staffs. It has also been a challenge to handle the changing measures. Initially we were reporting how many jobs you created and how many you retained — then they collapsed those data matrixes into each other.”