Poor Eric Garcetti, he must just be mortified by his inability to ramrod through the gift of $4.6 million of public money to Hal Katersky’s Pacifica Ventures and his union partners in a planned 8-story, $57 million office building in Hollywood.
Twelve times in the last five months, the powerful president of the City Council has put the now notorious project at 1601 N. Vine St. on the Council agenda. Twelve times, he’s blinked and had to pull if off the agenda and reschedule it for a week later or two weeks later or the next month.
What could be more humiliating?
After all, almost nothing gets on the Council agenda that isn’t pre-approved and projects like this are left solely to the discretion of the Council member whose district it is in.
So Garcetti keeps thinking he’s just one more finagle, one more sleight-of-hand away from pulling off a deal to subsidize an office building in a glutted market with rents falling and vacancy rates soaring only to find out he doesn’t have the votes because community activists keep exposing detail after detail showing what a bad deal it is.
On Tuesday, Garcetti sent the project back to his Housing, Community and Economic Committee for the fourth time with a hearing likely next Wednesday.
“There have been concerns raised as to the process behind this project. These concerns must be addressed, fully and openly,” Garcetti aide Yusef Robb, told Dakota Smith at Curbed LA.:
“Fully and openly” — in committee instead of in Council where the endless list of things that are wrong with this deal would be broadcast on Channel 35 and get the visibility they deserve.
Remember this deal goes back to the summer of 2006 when Katersky bought the property from Ullman Investments, off criticized for its projects subsidized by the Community Redevelopment Association, and then flipped it a month later to the CRA for the very same price of $5.45 million.
The CRA immediately opened negotiations with Katersky to sell the property back to him for a mere $825,000 — a gift of $4.6 million — so he could build a 108,000 square foot office building with 60 percent of tenants required to have some tangential connection to the entertainment industry.
It has been a rocky road
Trouble arranging parking for tenants has led to long delays and forced Katersky as the managing partner to add a 5-story underground garage for 200 cars.
Then, there’s the Molly Burger’s problem, a long-time tenant on the property which was offered $120,000 from the CRA to relocate — a cost that has now reached $1.1 million.
But the big problem is managing partner Katersky and his Pacifica Ventures which is described in city documents as “a studio development company with experience in motion picture and television production facilities.”
“Pacifica developed, owns and operates Albuquerque Studios (ABQ), which opened in Spring 2007 … Pacifica purchased the Culver Studios from SONY Pictures in 2004 … Pacifica is engaged in new studio ventures in Philadelphia, Connecticut, Prague, and several other cities..
In other words, Katersky and Pacifica are profiteers in runaway production that is killing jobs in Los Angeles for our most important industry.
Fortunately, they aren’t very good at with Albuquerque Studios in bankruptcy and most of the other deals involved in nasty lawsuits.
So why is $4.6 million in public money going for this project and why is Garcetti so tenacious in trying to get it approved.
Perhaps it has something to do with Pacifica only having a 6 percent stake in the project while “Workers Realty Trust, a Chicago-based union pension fund” has a 94 percent interest and the “the proposed senior lender for the project is union-owned Amalgamated Bank.”.
None of these issues have been dealt with by the CRA or in public by Garcetti who is counting on raising millions from the unions and developers he’s pandered too so much for so long if he’s going to stand a chance to fulfill his ambition to be elected mayor in 2013.
Ambition is a dangerous thing so you have to wonder what has been going on behind the scenes during all this time and prompted Garcetti to think he could slip this through the Council a dozen times in the last five months only to be stymied by one negative revelation after another.
Every aspect of this deal stinks.
It’s a bad deal for the public. It’s an unneeded project that doesn’t merit public subsidies. It’s being done with a developer with a checkered record who has done his best to harm the LA economy by profiting from runaway film and TV production.
It’s time to call it quits and kill it.
Ah, how the mighty can fall thanks to the power of the internet. These pols still don’t get that their game is up.
Great article, Ron! I hope a lot of people will read it and be as outraged as you are!!
READERS: Pass this article along to your friends and family! This waste of our tax dollars has got to stop!! We can’t afford it!
And Garcetti thinks he’ll be Mayor? NOT!!!! Not if the thousands of community members who are not happy with the way he’s been doing business in city hall. What about LaBonge saying NO to Veterans not allowing a yellow ribbon put around the Hollywood Sign. SHAME!!! OF course city council doesn’t do anything AMERICAN but they waste money on the Hollywood Walk of Fame. Read today’s agenda and count how many people they are honoring about 4 just today and how much is this costing a city that is broke?
There is a lot more to this story that is surfacing. Remember what really brought Nixon down was the cover-up. And this deal has many unopened doors.
To November 10, 2010 2:19 PM:
As much as I respect the idea of honoring Veterans with a yellow ribbon, I don’t hold that against La Bonge.
What is criminal about La Bonge is his support of the CRA and the use of Eminent Domain for private projects. Also Mr. La Bonge’s direct or indirect participation in fraud regarding the Cahuenga Peak purchase which took away Quimby and other tax funds from Urban areas and enriched real estate speculators.
To November 10, 2010 2:19 PM:
As much as I respect the idea of honoring Veterans with a yellow ribbon, I don’t hold that against La Bonge.
What is criminal about La Bonge is his support of the CRA and the use of Eminent Domain for private projects. Also Mr. La Bonge’s direct or indirect participation in fraud regarding the Cahuenga Peak purchase which took away Quimby and other tax funds from Urban areas and enriched real estate speculators.
Great job, Ron.
The devil is in the details, but the devil is also behind the cover-up. That is why the devil does not want us to learn the details.
Shall we call this Vinegate?
Despite all the questions that Jack H has asked, not a single one has been answered. despite Jill Stewart offering to print a Garcetti reply, silence.
Garcetti gives this guy millions of dollars and what does he do with it? He uses our money to take jobs away from Hollywood. 1,500 to 2,000 jobs that we need in Los Angeles and Garcetti is shipping them to CT. Katersky says that he will steal another 1,000 jobs to Chester Town, PA, and Garcetti is busy getting more money for this guy so that more and more entertainment jobs can be out-sourced back East. I won’t blame the Mayor of South Windsor, but Gracetti wants to be L.A.s Mayor? And we thought Tony V was bad. Here’s what Katersky told South Windsor:
“Mr. Katersky informed the commission that there will be 1,500 to 2,000 new jobs created in South Windsor and that local businesses will benefit from their purchases. The use of the UTC power cell is a more environmentally sensitive way to provide power and that CT Studios will become first film studio in the world to use this type of power. CT Studios will also become the hub of a new industry in CT. On average the studio operates five days per week from early morning to about five p.m. The company will get involved in community projects and organizations. Last year the company filmed ‘Terminator 4′ at their state of the art facility in Albuquerque, New Mexico. During construction there will be 500-600 union jobs available. The company will also create connections with local technical schools, colleges and universities. Commissioner Neary commented that the use of the fuel cell technology is very exciting and asked about the proposed location of the entrance and road. Mr. Katersky stated that the entrance across from the exit off of Rte 291 will provide easy access.”
Hey Ron, give up. The system is corrupt. Kid steals a bar of candy and goes to jail for years. B. Karatz steals millions and gets probation thanks to pimps like Riordan and Broad. Yes, they have pimping the city with the blessing and acquiescence of the establishment, and the LA Times is part of this sinister scheme.
Garcetti gives this guy millions of dollars and what does he do with it? He uses our money to take jobs away from Hollywood. 1,500 to 2,000 jobs that we need in Los Angeles and Garcetti is shipping them to CT. Katersky says that he will steal another 1,000 jobs to Chester Town, PA, and Garcetti is busy getting more money for this guy so that more and more entertainment jobs can be out-sourced back East. I won’t blame the Mayor of South Windsor, but Gracetti wants to be L.A.s Mayor? And we thought Tony V was bad. Here’s what Katersky told South Windsor:
“Mr. Katersky informed the commission that there will be 1,500 to 2,000 new jobs created in South Windsor and that local businesses will benefit from their purchases. The use of the UTC power cell is a more environmentally sensitive way to provide power and that CT Studios will become first film studio in the world to use this type of power. CT Studios will also become the hub of a new industry in CT. On average the studio operates five days per week from early morning to about five p.m. The company will get involved in community projects and organizations. Last year the company filmed ‘Terminator 4′ at their state of the art facility in Albuquerque, New Mexico. During construction there will be 500-600 union jobs available. The company will also create connections with local technical schools, colleges and universities. Commissioner Neary commented that the use of the fuel cell technology is very exciting and asked about the proposed location of the entrance and road. Mr. Katersky stated that the entrance across from the exit off of Rte 291 will provide easy access.”
Hey Ron, don’t listen to “November 10, 2010 8:47 PM”, you are on a roll. This is historic. When have you ever seen a pet project delayed 12 times and then sent back to committee. Normally everything is rubber stamped with a unanamious vote.
Ron is doing the right thing by shining light on corruption. Like cockroaches, politicians try to find a hiding spot when the light goes on.
And for those of you complaining, focus your efforts and cleaning out the incumbents in the even numbered council seats and tell their replacements that you are watching.
WOW! – I call this amazing. – It really has been delayed 12 times? – That’s something to write home about … Thank you, Mr. Kaye, for not letting the ball drop! – We are after all, NOT Times Square. – Though I do believe that the time has run out for our “presumed Mayor” to be.
It is good to know that even Corruption has it’s price, but it makes me wonder how much more can they possible want?
I agree with my good ol’ buddy Ronald R. who used to say: Politics is supposed to be the second oldest profession. I have come to realize that it bears a very close resemblance to the first.
And we all know what that one is, don’t we? – From the looks of it, though, it appears that this “Pimps” luck has run out.
Conny Brown
Garcetti’s former staffer, Allison Becker, is now at the CRA and working on a plan to wreck havoc in the Atwater Village/Los Angeles River area of LA. She is pushing a tax-hungry CRA plan to convert much of area of the Los Angeles River into a “blighted” community – so the taxes can be drained away to enrich the billionaire developer crooks like Katersky.
Garcetti and Reyes plan to use eminent domain to seize more land and industrial buildings in that area and take the tax increment of an already shamefully underserved City area to pass on to their developer buddies.
Northeast Los Angeles, like the Valley, Hollywood, and San Pedro before it: It is time to light the fires of succession from the City of Los Angeles. Our City is run by billionaire crooks and greedy public employee unions who are thieving and stealing away the public treasury to the detriment of our quality of life and the education of our children. We need to fight Garcetti and Reyes with public condemnation and a plan to breakaway from this horrible City Hall.
If the development of the LA River is such a great idea, then there is absolutely no justification for taking the tax increment of the low-income areas of Glassell Park and Cypress Park to enrich the campaign contributors of Garcetti and Reyes. The community needs to be informed and get organized to screw the City Council back.
Garcetti’s former staffer, Allison Becker, is now at the CRA and working on a plan to wreck havoc in the Atwater Village/Los Angeles River area of LA. She is pushing a tax-hungry CRA plan to convert much of area of the Los Angeles River into a “blighted” community – so the taxes can be drained away to enrich the billionaire developer crooks like Katersky.
Garcetti and Reyes plan to use eminent domain to seize more land and industrial buildings in that area and take the tax increment of an already shamefully underserved City area to pass on to their developer buddies.
Northeast Los Angeles, like the Valley, Hollywood, and San Pedro before it: It is time to light the fires of succession from the City of Los Angeles. Our City is run by billionaire crooks and greedy public employee unions who are thieving and stealing away the public treasury to the detriment of our quality of life and the education of our children. We need to fight Garcetti and Reyes with public condemnation and a plan to breakaway from this horrible City Hall.
If the development of the LA River is such a great idea, then there is absolutely no justification for taking the tax increment of the low-income areas of Glassell Park and Cypress Park to enrich the campaign contributors of Garcetti and Reyes. The community needs to be informed and get organized to screw the City Council back.
Crazy corruption in the city of Los Angeles and sadly main stream media refuses to do stories on it. Thanks to blogs like this and the LA Weekly for outing them. They are greedy, corrupt politicans who care nothing about the people and only want $$$$ for themselves. The way to get back is by showing them at every meeting and event they are not WElcomed. Too many times community members whine and complain but then when the corrupt council member attends a meeting or event you clap. I DON’T AND WON’T. You need to start sending a message by ACTIONS. Let them know they are NOT WELCOMED anymore.
Speaking of 2013, wouldnt it be great if Wendy Greuel did an audit on this?
In order for an audit to be untainted, it would have to be done by an independent (from the City) government agency under the direction of an outside law enforcement agency.
Why? Because the Controller, CRA, City Council, and City Attorney (who also represents the aforementioned) have sat on their hands since June despite complaints filed and articles written naming specific problems and potential crimes.
Yes, if the Controller set up an audit that was truly independent and reviewed Controller Tuttle and Chick’s audit of the CRA dating back to 2000 and then law enforcement was called in and this deal killed, it would put Greuel on a high pedestal for the Mayor’s race.
But her past action has been too weak and too late. And her relationship with special interests such as the IBEW clearly demonstrates that her real loyalty is not to the voters/taxpayers of Los Angeles.
I have a faint hope that Ms. Greuel proves me wrong, but if any punishment is dolled out, it should be at the top. Instead, it will be the lower level employee “fall guy.” But it would be nice to see the “fall guy” sing a little, now wouldn’t it? Or better yet, spill all the beans and point directly to the elected officials and City managers who had knowledge of cover-up and crimes.
No wonder Eric Garcetti said, it’s ok for developers to give donations and get City Contract.
Ron can you go down a list of tax subsidaries Eric gave starting with the W-Luxury Hotel of 6 Million dollars.
AS a VET, served in Gulf I take exception Pussyfoot Garcettin has not serve in Middle EAST. Protected he is… but doen’t gurantee he’ll become Mayor.
A real man serves his country and assigned to location where hazardous pay is assigned. He wants to be known for his Service without actually SERVING other than down in Sunny San Diego.
Its all comming back to President Garcetti. Fraud, Waste and Abuse. The coward he is.
More of the Internet and the blogs and the mailing lists of community activists need to be used to get the word out about what a fraud Garcetti really is. Yeah, his Navy service is a couple of weekends in the reserves…. probably behind a desk.
This particular project might have been more suitable to be built during different times AND with a different developer.
Granted that there is some need for office space in Los Angeles, but why didn’t the gurus see that at the time when they decided to have the Broadway Building, the Equitable Building and the Sunset / Vine Tower being converted into Condos? – Those were fine functioning office buildings.
Now a group of people want to bring back the jobs they stole from here back to Los Angeles? – That’s insane!
And all that with the money I put into the system? REALLY!?!
I rather take my chunk back, no questions asked.
November 11, 2010 11:22 AM: You’re dead wrong about Garcetti’s service as Navy reserve officer and most Veterans would disagree with you. His service as a Navy Reserve Officer is honorable.
However, his service as a Councilperson is not espcially in light of his continued push on this project which further taints Los Angeles as a very corrupt city – the next Chicago. To heck with ethics,
Mr. Kaye is right, Garcetti wants to ramrod this thing through no matter how bad the deal and principals are.
And more importantly there seems to be a cover up of illegal activities of the CRA and possibly members of the City Council and their staff.
Sadly, the lower tier employees will take the fall, but those executives (private and public sector) and elected officials will get away.
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