Seizing the moment, City Council President Eric Garcetti admitted Wednesday for the first time that there’s problems with the controversial Hal Katersky CRA-subsidized office project at 1601 N. Vine St. in Hollywood.
Garcetti brought the issue to the Council floor 12 times in less than six months and each time blinked and continued it. Last week, he sent it back to the Housing and Economic Development Committee which sent it back to the Council without any recommedation.
In Public Comment before the full Council, Wayne Spindler spelled out many of the issues that have been raised by community activists and bloggers, prompting Garcetti to respond.
“If we can’t get some answers out of what happened with CRA . . . we certainly ren’t going to move things forward until we understand what happened there,”Garcetti said, putting the project on life support.
What he should do is call Community Redevelopment Agency officials before the Council, release all documents regarding the project and demand hard answers about every aspect of this dirty deal.
Katersky, CEO of Santa Monica-based Pacifica Ventures that specializes in profiteering from runaway film and TV production, has a long record of his projects becoming tied up in bankruptcy, lawsuits and controversy.
He bought the property, home to a parking lot and Molly’s hamburger stand, in 2006 from another controversial beneficiary of CRA subsidies, Ullman Investments, and then flipped it a month later to the CRA for the same price, $5.45 million, and immediately got CRA agreement to begin negotiations to buy it back for $825,000 .– a gift of $4.6 million in public money to a questionable developer for an unneeded office building.
Councilmember Gracetti says that the CRA should provide information. That is strange since Garcetti has all the information. His office babysat this project every inch of the way and what information is available indicates that he knew about the appraisals.
Is Gracetti about to blame everything on Alison Becker as a rogue employee who was doing things without his knowledge?
Everyone at CD #13 and CRA should be mirandized ASAP.
VineGate is only one example where hubris allowed these fancy pants boys to get caught with their panties around their ankles.
What about the fraud with CIM Group at the CRA Hollywood-Western project? The ENA was obtained by making a fraudulent misrepresentation about taking the north western properties by use of the Education Code. That was in LaBonge’s District, CD4, and his planning deputy Renee Weitzer was fully informed about the fraud and she and Tom did nothing. When they feel through CIM destroyed the properties so that they would be blighted and be under the CRA. For this destruction of viable businesses, CRA paid CIm Group $13.5 Million. Then there are the horrible question concerning councilmember Wesson and his dealings with CIM Group — about $41 Million.
VineGate maybe to the City Council as Ramparts was to the LAPD. We need the FBI now — before any more documents are destroyed.
The City Council needs to kick this back to the CRA and have them start over again in vetting Katerdsky’s qualifications and the deal, including Albuquerque Studios, Culver Studios, the trail of litigation, the viability of the project, the rents, and the sources of financing. Why waste the time if you are working with incomplete and dated information.
Where is the City Controller in all of this?
I think you meant to say that the HCED Committee sent it back to Council without a recommendation. The committee discussed the issue for over an hour!
Jack asked the Committee to send it back to the CRA, but the Committee ignored him and without a quorum sent it to the Council with no recommendation. I believe Wesson alluded to the Council’s being able to elicit the facts from CRA and Katersky.
After public comment by Mr. Wayne Spindler, Gracetti spoke in the council chamber saying that the project was going nowhere until he got answers. All Eric has to do is ask himself. It’s his deal.
Just look at how many times this has been agendized and the many articles exposing corruption issues have been written by reputable sources citing links and fact checking.
Reading and observing all of this, why wasn’t this project completely killed and an legal investigation launched by the City itself?
Because this didn’t happen, the public has no confidence in the City to regulate itself. What other projects have gone through that have simliar problems? What about the two separate HUD loans given to CIM?
This is just like the Chicago or even LA’s own LAPD Rampart scandal. At least in Chicago, and outside investigation was launched. Without an outside investigation, any hope for LA will sink into a dark hole.
Dear Sally,
You could look at the CRA Hollywood-Western Project and CIM Groups, where they obtained the ENA (Exclusive Negotiating Agreement) by making fraudulent representations to the City Council that the “North Western Properties” could be condemned under the Education Code. This was false and CRA knew it to be false when it advised the City Council. All City Councilmembers relied on the false misrepresentation, except Councimember LaBonge who had been informed at length about the fraud.
Then take a look at Wesson’s district and CIM Group and the Midtown Development — $41 M in city money — if not more.
Poke a stick into a CRA development and fraud oozes out.
Then maybe an independent investigation of the CRA is warranted that would go back 5 to 10 years to show a pattern of fraud and criminal activity.
Mr. Humphreville (November 17, 2010 2:03 PM) hits on something not discussed much, the financials. If you look at all the reports since 2006, the financials haven’t changed. This assumptions for this project are based on 2006 and completely ignore the October 2008 Great Recession that the entire Country is in.
Los Angeles is at ground Zero of the Great Recession and will take longer than the rest of the Country to comeback. That means high vacancy rates in commercial buildings. This new project will only add to the supply, further depressing the local market.
Don’t hold your breath with Garcetti doing the right thing. Keep an eye on this one and make sure that your video camera batteries are charged when this gets on the agenda for City Council.
One of two things will happen: Either it will be on the consent agenda and no public speakers will be allowed to speak.
Or it will be on the agenda and everything will be justified (the CRA will say, we can’t find the documents and everyone involved is no longer working for the CRA). That is exactly what they already said in Committee.
If it does get on the City Council Agenda, Garcetti will perform his usual theatrical performance about jobs and the economy. Who cares about any criminal activity that took place.
Now that Garcetti has flip-flopped three times on the rate payers advocate for DWP, just watch him flip on this one (1601 N Vine Street).
Both offer interesting legal insight however. In the case of DWP are Council-members collaborating outside of the public meeting with Councilman Smith conveniently being absent on a critical DWP ratepayer advocate vote for a 7-7 split vote? Is this the result of collusion and undue influence?
If Garcetti pushes 1601 N Vine, how will it go especially with Jan Perry recusing herself in a Committee meeting and the rest of the Council knowing that a possible crime has occurred in the hiding of an appraisal? These Council-members cannot claim ignorance.