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.