By Michael Goldstein
By Dennis Romero
By Sarah Fenske
By Matthew Mullins
By Patrick Range McDonald
By LA Weekly
By Dennis Romero
By Simone Wilson
So sorry, Santa Monica. Apologies, Beverly Hills. The jewel you have coveted and negotiated for — billionaire Eli Broad's proposed museum, which will house his contemporary art collection — may not alight upon your city after all.
Politicians in those two cities have swooned over the prospect of hosting Broad's stellar 2,000-piece collection, its Baldessaris and Beuys. But for weeks, Broad has been in secret talks to instead locate his museum in downtown Los Angeles, on land slated for the still-unbuilt, luxurious and publicly subsidized Grand Avenue hotel and condo project, a development overseen by a little-known committee that Broad founded and has long chaired.
If the so-called Grand Avenue Committee, which Broad helped to run, and its oversight body, the Grand Avenue Authority, decide that they like Broad's plan, the museum would be located across from MOCA on public land, where high-end shops and eateries were to be built to lure condo buyers and hotel patrons into the Civic Center area.
Soon after news of Broad's intentions broke last week, questions arose about the appearance of a conflict of interest. Among the questions: How is it that Broad, who spearheaded the now-stalled $3.2 billion Grand Avenue project, which was to feature Frank Gehry architecture and a Mandarin Oriental Hotel, quietly morphed from being chairman of the Grand Avenue Committee to sitting on the other side of the table?
For weeks, Broad has been in quiet talks with members of the Grand Avenue Authority, which he formed, asking these close colleagues to put his Broad Museum on part of the public land.
The backroom talks began just weeks after he quietly resigned his Grand Avenue Committee co-chairmanship on November 30.
"There's no question that the dealer is suddenly sitting down to play the hand," notes Jaime Court, president of the anticorruption group Consumer Watchdog.
Broad Foundations spokeswoman Karen Denne says that Broad "stepped down from the Grand Avenue Committee so he would not have a conflict of interest."
But Tracy Westin, vice chairman and CEO of the Center for Governmental Studies, says that Broad's denial of a conflict omits the fact that, "When you're [a committee] negotiating with someone who used to chair your committee and is privy to lots of information, it puts [the former chairman] at an advantage."
"I'd really like to just blast the guy for doing this kind of stuff and acting in his self-interest ... 'cause that's really what it is," says bemused neighborhood-council activist Doug Epperhart of San Pedro. "On the other hand, you've got to admire the guy for being immune to the slings and arrows that all the rest of us are hit by."
Asked if Broad's dramatic switch — from negotiating on behalf of the public to create a private project on public land, to negotiating on his own behalf to control a piece of that land — is inappropriate, Epperhart says, "Of course there's a conflict, [but] it's so Los Angeles. There's 4 million people, but there's only four that get to make decisions."
Adds Court: "He has the status of Zeus sitting on Olympus. Nobody complains when he goes down and takes advantage of the peasant girls."
But neighborhood-council activist Jack Humphreville notes, "We ought to be thankful for situations like this. [Broad's] done a lot for the city, especially downtown. ... When [conflicts] are not disclosed is when there is a problem."
The Weekly has previously reported that the Grand Avenue project — none of which has been built — could not have been conceived without extensive, and controversial, public subsidies.
Before the economic crash, the developer, Related Companies, was awarded more than $100 million in city, county and state subsidies and tax breaks — all during Broad's chairmanship.
City Councilwoman Jan Perry and Los Angeles County Supervisor Gloria Molina, the two elected officials who sit on the five-member Grand Avenue Authority, have voted to support almost every aspect of the pricey endeavor. Perry and Molina repeatedly supported subsidies, even as City Hall and the county ran into budget woes and Related Companies failed to begin construction.
While they sat on the authority, Broad chaired the Grand Avenue Committee from 2003 to 2007, becoming co-chairman in 2007. According to Martha Welborne, the committee's top-level staff member, Broad resigned from his committee position on November 30. Less than two months later, at a sparsely attended January 25 meeting downtown, Grand Avenue Authority officials revealed the surprise news that Broad is now on the other side of the table. (See accompanying story, "Public Unwelcome at Grand Avenue.")
Consumer advocate Court feels that the conflict is offset somewhat by the billionaire's purpose — an art museum rather than, say, a condo tower. "It's not like housing that he owned that he would profit from," says Court. "On the other hand, should that entitle him to have his pet project gain special concessions because of the knowledge he has?"
Westin, of the Center for Governmental Studies, says Broad's previous role should not prevent a museum deal if his proposal is to the public's advantage. But the unusual situation "puts a higher premium on the need for transparency," he says.
The city's Community Redevelopment Agency board, the Los Angeles City Council and the Los Angeles County Board of Supervisors will all be required to publicly vote on the deal. Even so, the Grand Avenue Authority, which will supervise the negotiations leading up to those votes, has a poor track record for transparency.
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