Eli Broad's Grand Illusion

IT’S CALLED THE GRAND AVENUEPROJECT, downtown’s $2 billion dream come true for Eli Broad, New York developer Related Companies, four eager members of the Los Angeles County Board of Supervisors, a unanimous Los Angeles City Council, the city’s Community Redevelopment Agency — and everyone else who imagines the photo ops when the much-ballyhooed first phase is done in 2011.

On paper and in architectural renderings, Grand Avenue is a sparkling new “destination” development, including in its $775 million phase-one two skyscrapers and a series of lower buildings that together include a five-star Mandarin Oriental Hotel, several hundred luxury units, 100 below-market apartment units, restaurants, upscale shops — and a 16-acre park owned by Los Angeles taxpayers that officials are handing to a private leaser.

Backers say the project puts the final polish on a booming downtown and is so critical that it’s worth $95 million in taxpayer subsidies and $30 million in public improvements, all ushered through by a “Grand Avenue Committee” controlled by two of the region’s richest men — megadeveloper Nelson Rising and billionaire Broad. The committee, operating with almost no media coverage, has acted as real estate negotiator for the city, county and redevelopment agency. Beneath the luxury project’s glittering surface is the sheer complexity of the deal cut between government and private interests, raising questions about the financial risk to taxpayers — and the legitimacy of allowing public park space to be planned and developed by private entities.

Sharon Gi, assistant project manager for a key partner, the Community Redevelopment Agency — an unelected body separate from City Hall itself — describes the Grand Avenue Project as a joint-powers authority between the county, city and CRA that is nothing less than “the most complicated deal, in most every respect.”

If the deal is complicated, the purpose of the three-square-block project on Bunker Hill was supposed to be clear-cut. After all, the city is pouring in tens of millions of dollars in street improvements, has agreed to forgive the hotel and parking-lot owners about $60 million in future taxes, and has quietly expended thousands of person-hours by CRA and city workers to push the glitzy project through.

This at a time when newspapers are filled with stories of Los Angeles city coffers so empty, and city employees and agencies so overworked, that many neighborhoods — those not located in the booming downtown, for example — have seen city services and promised projects cut back or canceled.

To name just a few: City fathers this month closed the boat-rental service at MacArthur Park’s pond, popular with low-income Latino families who live in the tattered urban district. The reason: no money in city coffers.

And in May, after pouring in $9.5 million in public bonds, city leaders had to provide emergency funds to avert the embarrassing closure of the unfinished Children’s Museum at Hansen Dam Park in working-class Lake View Terrace — long promised as the first major museum in the 1.4 million–population San Fernando Valley. The reason for the current scramble: City Hall expected a private group to drum up the remaining $30 million or so. In Highland Park, Villaraigosa pledged to save the nonprofit Southwest Museum, the city’s oldest, at the foot of Mount Washington. He didn’t. Instead, a rich collection of the city’s historic and Native American treasures were transferred to the Gene Autry museum on the city’s outskirts near Glendale. The reason: The Autry, which now owns the Southwest Museum, had the dough. The city didn’t. Van Nuy’s business district along Van Nuys Boulevard still looks like a filthy, litter-filled south-of-the-border town — four years after City Hall officials dismantled a special task force that was designed to, at long last, fix it up.

Why? Again, no money.

IN A CITY THAT SPENDS $500,000 per year on calligraphers to draw up “whereas” declarations in honor of obscure civic leaders, there’s just no money. Yet the Grand Avenue Project sailed through, described recently by the Daily News as a “world class civic heart for downtown.”

The accolades might be more understandable if the need for it were as clear-cut as its chief proponents, billionaire Eli Broad and Related Companies, have insisted. But in interviews conducted by the L.A. Weekly, and in public statements, the chief backers and beneficiaries of the Grand Avenue Project do not agree on the fundamental purpose for the project — or on the core justifications for its big, controversial public subsidies.

Broad has declared Grand Avenue to be a regional — or even national — destination point and a “win-win for everybody.” During a six-minute speech to the Los Angeles City Council on February 7, the founder of SunAmerica, dubbed “the Broadfather” by his detractors, read off a long list of labor unions and ethnic- and race-based organizations who back his dream.

But, aside from the list of special-interest groups he named, the drone-voiced tycoon never suggested that Grand Avenue is actually supported by everyday Angelenos — the very people paying to make it happen. (A spokeswoman for Broad said he would not discuss the project.)

So why, exactly, are Los Angeles taxpayers on the hook for a mostly private development so extravagant that even Frank Gehry’s street paving on Grand Avenue will be subtly multicolored to create “ambience”? Broad’s justification — that it’s for tourists and the whole region — is in sharp contrast to the justification claimed by Bill Witte, president of Related Companies of California.