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Eli's Egoland? 

A billionaire twisted arms to use public land for luxury shops. Now Eli Broad wants to put his art there

Friday, Feb 5 2010
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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.

click to enlarge Rich tease: Eli Broad dangled his art in front of Santa Monica and Beverly Hills, but privately pushed for downtown.
  • Rich tease: Eli Broad dangled his art in front of Santa Monica and Beverly Hills, but privately pushed for downtown.

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.

The authority, made up of city, county and state officials, frequently cancels its meetings, creates cryptic agendas that shed little light on the real business at hand, and often goes behind closed doors for executive sessions. All but unknown to the Los Angeles public, the arcane authority typically gives only 48 hours' notice that it is meeting.

The only Grand Avenue Authority board member willing to speak publicly about Broad's new role in the Grand Avenue development was Los Angeles County Chief Executive Officer William T. Fujioka, the fiscal adviser to the Board of Supervisors. Fujioka says he is comfortable with Broad's role, as long as Fujioka fulfills his job: to fiscally examine any deal to assure that "it's a good project for the county."

A spokesman for Grand Avenue Authority member Gloria Molina would not comment. That spokesman referred questions to Grand Avenue Committee staffer Martha Welborne — an indication of the intertwined insider nature of the project and its overseers. Welborne was president of the American Institute of Architects/Los Angeles in 2008. In that position, she chose Broad to receive the group's "Building Team of the Year" award.

Another politician on the Grand Avenue Authority, Councilwoman Perry, did not respond to the Weekly's requests for comment. Perry owns a condo a very short walk from the planned hotel and shops — and, now, from the proposed new site of the Broad art museum.

Supervisor Mike Antonovich, who along with City Councilman Bill Rosendahl has been the only elected official to vote against the Grand Avenue development, reacted with strong words to Broad's plan to use part of the land for his museum.

Antonovich notes in an e-mail, "It would be irresponsible for the Grand Avenue Authority to give away more taxpayer funds to use as an 'incentive' for a museum that Beverly Hills and Santa Monica are courting."

Broad is widely credited with saving MOCA from financial demise in December 2008, when few of the city's elite would contribute to the troubled institution.

"He's been not just the architect of the remaking of downtown, but the rainmaker," notes Court.

The idea of displaying Broad's own collection across the street from MOCA has earned rave reviews in many quarters.

"When you add the Broad Museum, in combination with MOCA and the Music Center and the Grand Avenue project, I'm sure it will be an amazing cultural center," says Russell Brown, a downtown resident who is president of the Downtown Neighborhood Council.

And, as Court notes: "There's no law against being rich and powerful and having your art displayed on the front lawn of the project you developed — I think."

Reach the writer at tibbyrothman@verizon.net

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