EDITOR’S NOTE: The City Council’s first action Tuesday was to put off for at least a week the two items approving the CRA deal with Pacifica Ventures.
With the complicity of our elected, appointed and hired officials, the jackals are feasting on the carcass of Los Angeles as if there were no tomorrow.
At the rate they are going, there will be no tomorrow.
This is a city littered with foreclosed houses and empty storefronts that is slashing core services like libraries and parks and yet they are finding hundreds of million of dollars for pet projects and giveaways in a desperate effort to buy jobs.
Last week, they declared a “tax holiday” for new businesses and soon they will offer tax breaks to old business with DWP rate cuts thrown in for good measure even as they take every last dollar out of the pockets of residents struggling to make ends meet.
Why would any business locate here or expand if the customers don’t have any money to spend?
They — the DWP and Community Redevelopment Agency — paid more than $11 million last month for five industrial properties near downtown for their fantasy of a “clean tech corridor.” But there are no firms that have shown any interest in locating there so they are offering $11,000 in prize money for innovative ideas of what could be done with it..
Today, the Council will roll over for developer Hal Katersky’s Pacifica Ventures and approve the CRA selling him a property at 1601 N. Vine St. in Hollywood for $825,000 — the same property Katersky he flipped to the CRA in 2006 for $5.45 million a month after he bought it.
Don’t expect your Council members to do the background research or ask the tough questions that community activists like Bob Blue are asking about this deal and making their research available to the Council before they vote on this sweetheart deal.
This is a deal that stinks like so many others that are going on now.
Katersky bought the Vine Street property from Ullman Investments for the same price the CRA paid him a month later, presumably because Ullman was the target of a 2000 audit by the City Controller for a highly questionable deal involving CRA acquisition of a parking lot in Hollywood for an inflated price.
As for Katersky, a subsidiary of Santa Monica-based Pacifica Ventures, Pacifica Mesa, filed documents in bankruptcy court in Albuquerque just two weeks ago showing it has $105 million in debt on a studio project that flopped in recent years, a filing that came just days before the property was to be sold at auction in a foreclosure sale.
The state-of-the-art studio was built with union pension fund money and strong backing from New Mexico Gov. Bill Richardson who offered huge tax breaks for any movies made there.
Bankruptcy notwithstanding, Katersky and partner Dana Arnold have found a friendly environment in LA for heavy subsidies to build a $57-million, eight-story, glass office building on Vine between Hollywood and Sunset.
Under the CRA deal, the tenants for the building are supposed to be entertainment companies and is needed, the CRA says, because “we’re trying to revitalize Hollywood.”
Katersky’s own view is more sanguine: “Every project we do has government involvement or it doesn’t take place…We are opportunistic developers.”
Think about this:
Every dollar the CRA gives away comes from property taxes that could be used to keep libraries open and provide other services, could even be used to revitalize the city’s vast expanse of deteriorating neighborhoods, not just downtown and Hollywood.
Every dollar the DWP gives away could be used to replace rotting water mains or upgrading the aging power grid or even keep rates low so residents had money to spend in local stores.
It’s no accident that LA is broke and broken. It’s not an act of God or the fault of the recession.
The waste, the mismanagement has been going on a long time because of misguided policies that neglect the interests of the public. What’s shocking is that even as the bills are coming due, the city’s leadership is throwing away even more money, hastening the day of reckoning.