The Death of the 1601 N. Vine Project: A Video Tragicomedy about City Hall Corruption and Failure Starring Eric Garcetti

It was called the “Cesspool on Vine,” the “Vinegate Scandal,” a “fraud against the people” and the “poster child for all that’s wrong” with Community Redevelopment Agency — the entertainment office project at 1601 N. Vine St. that wannabe mayor Eric Garcetti wanted so badly for so long to “bring Hollywood back to Hollywood.”

Developer Hal Katersky declared before the City Council 361 days ago that it was “shovel-ready” and construction would being in the fall. By the time fall came, Katersky’s runaway film production studio in Albuquerque was bankrupt and his labor union financiers booted him out of his role the 8-story, $60 million premium office project at Selma and Vine.

By year’s end, the Community Redevelopment Agency that had bought the empty lot from Katersky for $5.45 million in 2006 — a month after he bought it from the Ullman family for the same price — and contracted to sell it back to Katersky for $825,000 was itself no more. The deal was left in limbo along with hundreds of others.

On Feb. 16, Chris Essel, CEO of the defunct agency, told the panel appointed by the governor to clean up LA’s redevelopment mess that 1601 N. Vine project was in serious trouble because “material changes” had occurred and the new developer was unable to meet the conditions of the CRA contract.

Specifically, the requirement for entertainment industry tenants was unattainable so the contract would have to be negated or renegotiated by the new redevelopment panel, the designated local agency headed by developer Nelson Rising.

The $4.6 million gift of taxpayer money promised to Katersky and his Pacifica Ventures was no longer on the table.

With the project all but dead, the land sits idle with the only winner of this dark comedy about City Hall corruption being Mrs. Kwok Yi, owner of Molly’s Burgers who managed to walk away with a $1.1 million payday from the CRA and Katersky to close her modest stand adjacent to the office project site.

So much was wrong with this project from day one that it never should have gone forward, never would have gone forward, were it not the force driving being Garcetti, the Council’s President.

He acknowledges the Ullmans are his friends but they wouldn’t sell the property to the CRA because of an earlier dispute so the site was sold to Katersky to sell in a sleazy buy-back deal to the CRA.

The CRA’s own appraisal of the property in 2006 was 30 percent lower than the $5.45 million selling price which was based on an appraisal supplied by Katersky. CRA officials have never explained why they used the seller’s appraisal and so much more than the property was worth in 2006 — and as much as twice what it is worth today as part of the agency’s legacy.

All this and more was brought to light by community activists through dogged leg work and the California Public Records, presented at numerous public hearings and written about  on blogs, websites and in corporate media.

Time after time — more than a dozen times in all — Garcetti pushed the project forward and finally on March 9, 2011 ran roughshod over opponents to win Council approval with only Paul Krrekorian voting against it.

Garcetti offered his absolute personal assurance that he had personally investigated every allegation about this project and was totally satisfied that despite the mistakes that were made, there was nothing corrupt about it and the project would be built as planned as create hundreds of temporary and permanent jobs and helped spark the continued revival of Hollywood.

He was wrong, dead wrong.

Given that he is now a leading candidate for mayor in city elections next March, it is important that voters watch what transpired at that Council meeting a year ago and decide for themselves whether Garcetti was lying or just plain stupid.

DOCUMENTS: FinalCouncilAction, FullCouincilFile3-9-11 Council MeetingVideo,  CityWatchLA,

The Buck Stops with the Fall Guy — Or Not At All

The LA Community College Board members responsible for the fraud, waste and mismanagement in the handling of $5.7 billion in taxpayer money escaped being held accountable by voters thanks in no small part to the financial help of the same interests they allowed to do shoddy construction work.

But just a day after the election they found a fall guy for their own failure in facilities director Larry Eisenberg.

It’s not that the LA Times expose of the LACCD scandal didn’t show over and over that Eisenberg was a boob but nothing in the series of articles was unknown, or should have been unknown, to the people elected to provide oversight.

What went wrong is their fault but even as they were unanimously voting to sack Eisenberg and promise to end some of the most blatant abuses they tolerated so long, they were still patting themselves on the back for all the wonderful work they have done and criticizing the Times series as unfair.

Such is what passes for accountability in government these day.

The LA City Council, overseeing mismanagement of just about everything the city does, occasionally pays lip service to the concept of accountability, but never even seems to be able to find a fall guy to blame.

A case in point is the Cesspool on Vine office project in Hollywood they approved Wednesday despite numerous lingering unanswered questions that the nearly $5 million gift to a private developer with a questionable track record.

The most important question involved the vanishing $4 million appraisal of the 1601 N. Vine St. property the Community Redevelopment Agency paid for five years ago before buying it from developer Hal Katersky for $5.45 million based on his own appraisal.

Council President Eric Garcetti, who blinked 13 times before finally bringing the tainted project to a vote, piously whitewashed every question Hollywood activists have raised about the Cesspool on Vine with little more than his personal assurance that everything wrong about this project was the CRA’s fault.

He assured everyone  there was no collusion between his “friend” Steve Ullman who owned the property and Katersky who bought it and immediately flipped it to the CRA with the promise he could buy it back some day for $825,000 — a $4.7 million discount — if he ever could get financing.

What happened to the $4 million CRA appraisal is anybody’s guess but it was never properly evaluated by staff or presented to the CRA or the Council. In fact, it was only revealed when the activists filed a public records request — something Garcetti implied was his own doing.

So who in the CRA screwed everything up? It’s anybody’s guess.

The CRA’s Calvin Hollis said those employees moved on to other jobs elsewhere and procedures were strengthened just a year ago, four years after the fact.

Pressed by Garcetti, he acknowledged no real investigation was ever conducted but he will do so some day — an answer which satisfied the Council President and all of his colleagues with the exception of Paul Krekorian who voted against the project.

Don’t hold your breath waiting for the CRA to find a fall guy. The deal is done and the stench of the Cesspool on Vine will still linger a long time..

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1601 N. Vine: A Bill of Indictment for Fraud Against the People

On Wednesday, Herb Wesson’s City Council Committee approved the city’s gift of $4.7 million to developer Hal Katersky and his Pacifica Ventures company to build an office building at 1601 N. Vine St. in Hollywood, ignoring specific allegations of fraud against the people involving $1.45 million and whitewashing all the other problems linked to this troubling project.

This project is the poster child for all that’s wrong with the Community Redevelopment Agency and why it should be abolished. And more than that, it provides a window into the depths of City Hall’s corruption and why the city’s leadership has failed and must be replaced.

Attorney Richard MacNaughton and other Hollywood activists have dug deep into the record of the “Vinegate Scandal” and turned up the smoking gun: A CRA appraisal of the property for $4.08 million — $1.7 million lower than the developer’s own appraisal. CRA staff agreed to pay the developer’s asking price of $5.45 million in 2006 without ever telling the Board of Commissioners or the City Council of the lower appraisal.

The Council has put the project on its agenda more than a dozen times and once again it is on the agenda today but is expected to delay action until next week, allowing time for City Attorney Carmen Trutanich to determine whether the Council itself would become complicit in fraud if it knowingly approves the project without a full and thorough independent investigation of the evidence that has been revealed.

Activists have called on District Attorney Steve Cooley and the FBI to conduct a criminal investigation and MacNaughton  drafted after Wesson’s committee approved the deal what amounts to a bill of indictment for submission to the City Council.

With Jan Perry absent and Richard Alarcon ducking out just before the vote, Wesson, Tony Cardenas and Ed Reyes buried the past misdeeds as the fault of former CRA staffers, including the agency’s former head Cecilia Estalano.

They then green-lighted the project based solely on Katersky’s assertion that he is an innocent victim of CRA incompetence and his unequivocal denial of all allegations that have surfaced during the last eight months of controversy.

He insisted he is the still owner and operator of his runaway film production studio in Albuquerque despite bankruptcy proceedings and has no pending lawsuits against him, going so far as to assert there is not a single judgment against him or his firm among 30 lawsuits that have been filed.

Wesson’s Housing, Economic and Community Development Committee took him at his word, choosing instead to only question in the end whether the CRA had improved its policies.

You can listen to Katersky’s comments at the end of the hearing when questioned by Cardenas (Katersky-CRA.mp3) and listen to the full hearing here.

MacNaughton’s 13-page letter (MacNaughton2-23.pdf) to committee members, backed by various documents, begins under the heading “Council May Not Turn a Blind Eye To Fraud,” saying:
“Although this committee and the City Council itself are not the forums to conduct criminal investigations, when presented with proof of the elements of criminal conduct, the council may not turn away and say, “I do not want to deal with that.” By approving the deal, the committee has ratified the wrongdoing.”

“The Committee has not taken the time to review the documentation and the committee has undertaken no investigation. Asking the alleged perpetrators or their successors to provide evidence of their guilt seldom produces incriminating evidence. In this case, however, the citizens have forced the CRA to admit that in 2006 it withheld from the CRA Commission and from City Council the existence of the CRA $4 appraisal. The balance of the CRA’s January 2011 and February 2011 reports are at
best worthless and often misleading.”

He then goes on to examine Katersky’s role in flipping the property from Steve Ullman to the CRA, suggesting the developer’s statements to the committee were “evasive and disingenuous” based on documents at the time of the 2006 sale.

He cites bankruptcy records for the Albuquerque Studios and other court records involving Katersky in past and pending lawsuit to question his veracity.

“Rather than voting to give a multi-million deal to a man who could not be forthright even today, the committee had the duty to call for a criminal investigation,” MacNaughton concluded.

“Rather than obtaining answers, the committee ratified the prior and current wrongdoing. The best that can be said for a Committee member is that he had a conscious ignorance of the facts.”

This is not an isolated example of how the CRA and the City Council operate.

It has never been explained why this deal for an office building in a glutted office space market in Hollywood was ever worth one dime of the public’s money or how luring a couple of small entertainment companies from Burbank or Santa Monica will do anything to stimulate the regional economy.

It has never been explained why key documents disappeared, why procedures were violated, why former staffers were never interviewed about what really happened.

All we know is that Council President Eric Garcetti wants this project bad enough to risk his reputation on it and that whatever the Council President wants, he gets from other Council members — or else.

This is not a system of laws that serve the public interest but a system of back room deals that serve private interests.

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Fraud or Mistakes? 1601 N. Vine Office Project Goes Forward — Again

In a 90-minute hearing on the 1601 N. Vine St. office project, a City Council committee on Wednesday exonerated controversial developer Hal Katersky and blamed the Community Redevelopment Agency for the project’s “troubling” history.

With Alarcon walking out before the vote, Wesson, Reyes and Cardenas voted to approve the project and send it to the full City Council next week – the 13th time it has been on the Council agenda.

Disputing accusations his business dealings have been marked by numerous lawsuits, investigations and bankruptcy of a runaway film production studio in Albuquerque, Katersky portrayed himself as an innocent developer with a long history of success.

“We’ve done everything we’ve been asked to and we’ve spent $4 million to push this project forward,” Katersky told the Housing, Community and Economic Development Committee.

Attorney and Hollywood activist Richard MacNaughton (MacNaughton.pdf) laid out the case against Katersky and the CRA’s gift of $4.7 million to the developer.

He called for a full criminal investigation of possible fraud involved in how the property was sold by Ullman Investments to Katersky’s Pacifica Ventures in 2006 and then flipped a month later to the CRA for the same $5.45 million price. The deal called for the CRA to sell it back to Katersky for $825,000.

CD4 candidate Stephen Box questioned the project itself,  saying, “The last thing we need in Hollywood is more office space … the reason new office space has not been built for 30 years is because there is a glut … If this project were viable, it would take off on its own momentum.”

Echoing CRA Commissioner Madeline Janis, he called the project the “poster child for abolishment of the CRA.”

“This is an example of what’s wrong with the CRA, a call to action for a city prosecutor … to investigate the CRA. The people of Los Angeles are unrepresented in a situation like this.”

The critical question involving 1601 N. Vine involves separate appraisals by Katersky that put the property’s value as $5.45 million and the CRA’s own appraisal that placed the value as $4.08 million.

Without informing Katersky or the CRA Commission of their own appraisal, CRA staff went forward and paid the higher price and now claims it cannot find documents showing there was an attempt to reconcile the massive gap in appraisals,

An aide to Council President Eric Garcetti who is pushing for approval of the project acknowledged a “lack of transparency … and some problems” but insisted the only question is “whether it is viable.”

For his part, Wesson said how much he hates it when “when I hear the word fraud” and promised to “really vet this  …. The biggest mistake you can ever make in life is to feed a stray cat, you can never get rid of it … We want to get rid of this one way or another.”

Cardenas claimed he wasn’t going to vote to approve the project but accepted CRA staff’s admission that mistakes were made and that Katersky did nothing wrong and was going to submit documentation of what steps are being taken to make sure such problems “never happen again.”

Reyes called for a one-page summary for the full Council showing what public funds have been invested and what is going to be gained from the project.
In abstaining, Alarcon went a step further and called for “conservative and extremely conservative estimates” of the public benefits of the project.

“The most troubling thing is that CRA knew $4 million appraisal yet encouraged developer to pay $1.4 million without informing the developer or the board.  Somebody was interested in benefiting Mr. Ullman $1.4 million more than CRA appraisal.

“This is very troubling, may even be more than troubling.”

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FIRST VIDEO: Hal Katersky to CRA: Give Me The Money

Controversial profiteer in runaway film production Hal Katersky appealed to the Community Redevelopment Agency Board on Thursday to live up to the terms of its deal to give him a $4 million gift (plus the $4 million more it has invested) and go forward with building an office building at 1601 N. Vine. St.
Katersky and lawyer-lobbyist Bill Delvac made their case before the before the board after CRA staff presented their case in support of the project even as they admitted critical documents were missing and that they agreed to the $4 million subsidy based on the developer’s property appraisals which at the time — and now — were nearly 40 percent higher than their own.

CRA Commissioner Madeleine Janis acknowledged that the project is the poster child for abolishing the CRA as Gov. Jerry Brown has proposed and urged the board to pull the development agreement back from the City Council for further review and possible negotiations. The Council has put the issue on its agenda 12 times in the last eight months and had to pull it back because of damaging disclosures about how the deal was done.

This Is Why the CRA Must Be Abolished — The Story of 1601 N. Vine St. As Told By Chris Essel

For her sake, one can only hope that City Attorney Carmen Trutanich’s lawyers advised Chris Essel of her Fifth Amendment rights against self-incrimination before she put her name on this document as CEO of the Community Redevelopment Agency.

Twelve times last year, City Council President Eric Garcetti put on the agenda approval of the gift of $4 million in taxpayer money to Hal Katersky and Pacifica Ventures for an entertainment industry-related office building at 1601 N. Vine St. and 12 times he had to pull it because of questions about fraud, insider deals and fiscal irresponsibility.

The questions raised by residents of Hollywood were so serious that Garcetti finally ordered the CRA to answer each and every allegation of wrongdoing before he would bring it back to the full Council for approval.

Wednesday afternoon, in advance of the CRA Board meeting Thursday morning at 9:30 a.m., Essel released her “Report to CRA/LA Board of Commissioners on Vine Street Office Towers.”

Her defense of the CRA’s gift of $4 million in public money to a developer beset by lawsuits and bankruptcy over projects from Albuquerque to Czechoslovakia — all seeking to profit from from runaway film production — depends on critical documents that have disappeared, missing CRA staff members, new analysis based on flimsy  assumptions, questionable representations of material facts and dubious logic.

Here’s how Essel defined the questions she needed to answer to finally get this dumb deal approved: “(1) appraisal process in connection with CRA/LA’s acquisition of the site in 2006; (2) disposition price in conveying the site to Pacific Ventures (“Developer); (3) due diligence during the initial underwriting of the Developer’s capacity and more recent business operating capabilities, and (4) project benefits to the City; and to address questions raised by Councilmembers … about the current market demand for office space in relation to current vacancy rates, including the
feasibility of the project $4.50 per square foot lease rates.”

Her answers start with going back to the sweeping justification for the Hollywood Redevelopment plan many years ago which included “”a shortage of available industrial space for entertainment related uses, a decline in residential investment, shifting commercial uses and a shortage of first-class office space” (her emphasis added.

Flash forward to 2006 when CRA staff were worried about the 4,600 new housing units being built in Hollywood and the need for a “better jobs/housing balance.”

As luck would have it, Ullman investments wanted to sell its parking lot Vine and Selma along with the adjacent Molly’s Burgers but it didn’t want to do business again with the CRA, presumably because a previous deal led to a highly critical audit.

But luck was with the CRA because former Paramount Studios executive Earl Lestz — the very same studio where Essel herself worked on development deals for most of her adult life — “was interested in promoting the development of office space for entertainment firms in Hollywood.”

This fit right into Garcetti’s vision to “bring Hollywood back to Hollywood” from Burbank, Glendale and Santa Monica where they had fled because of LA’s toxic business environment, a goal that has no meaningful impact on the regional economy since it doesn’t create new jobs, only moves them around.

Impressed by Pacifica Ventures track record,  Lestz jumped right in and negotiated a deal for Ullman to sell the property for $5.45 million. A month later, Pacifica flipped the property to the CRA for the same amount and got an exclusive agreement to develop it.

It was Essel reports at the “height of a very fast-paced, dynamic and rising real estate market” but it’s hard to know what the CRA officials were thinking because “none of the staff directly involved in the initial acquisition are currently employed at the CRA/LA.”

Even worse, “some of the documentation is missing from the CRA/LA files.”

Essel does know that the CRA hired Pacific Real Estate to appraise the property and got an estimate of $4.07 million.

Katersky, and presumably Ullman wanted more, so Pacifica Ventures hired CB Richard Ellis to do a second appraisal and three days after the first appraisal got value put at $5.45 million.

Katersky’s luck was holding, Essel reports, because written CRA procedures allowed staff to pay 20 percent more than the appraised value, or $4.88 million, and even more if the Board of Commissioners approved it, which it did.

So Ullman was paid more than 35 percent more than the CRA’s appraised value, the $5.45 million price.

Before the deal was signed, the CRA’s former Senior Real Estate Officer sought a peer review of the differing appraisals.

“However, staff has not been able to locate a Review Report and cannot conclude as to whether or not a formal or informal review took place,” Essel reports..

“The CB Richard Ellis appraisal appears to be the appraisal referred to in the Board Memo dated September 7, 2006 in which the Board was asked to approve the acquisition of the property. The Board Memo would have been more informative if it had included an explanation about the outcome of the analysis of the difference in appraised value between the Pacific Real Estate and CB Richard Ellis appraisals.

“The written Board Memo simply says ‘The Agency will acquire the Vine Street Property for its fair market value (my emphasis added), supported by a certified independent appraiser using universal standards of professional appraisal standards (“USAP”)” (presumably referring to the CB Richard Ellis appraisal).”

Essel reports CRA staff has spent the “last several months” trying to sort out this mess and hired an “appraisal professional” who has determined that the original estimate of $4.05 million “was more accurate of the value at the time.”

She goes on to try to explain why the CRA wants to sell the property back to Katersky for $825.000 — $4.7 million less than they paid him for it — because the CRA has a “long-established policy” for “reuse value” that justifies the resale price.

Katersky and Pacifica Ventures seemed like a top developer in 2006 but the picture isn’t so clear today.

“In recent months, concerns have been raised about the Developer’s challenges with its other projects and properties,” Essel reports.

“The Developer reports that the lawsuits, have all been settled. It  should also be noted that Albuquerque Studios, which was developed and owned by a Pacifica
Ventures partnership, has been in bankruptcy court and in the process of reorganization for approximately one year.
She adds: “The developer does not have a commitment of construction financing at this time. This is not unusual given the state of the lending industry.”

So there’s no financing and there’s no market with a 17 percent vacancy rate for Class A office space in Hollywood where this project just adds 108,000 square feet to the 2.2 million square feet that now exists and is renting for $3 a square foot while this new office apace will go for $4.50 a square foot.

You can take Chris Essel’s word for that.

If the CRA Board approves this yet again on Thursday, the actual cost to taxpayers if this goes through will be $7.86 million upon completion — not counting whatever portion of the CRA’s $50 million operating budget was involved.

But don’t worry, Katersky and company and retained another one of its experts who reports “that the interest level is strong … however no company will risk their planning time and costs until the Project is fully entitled.”

And the benefits to Los Angeles and its people are incredible, unbelievable, actually, if you trust the CRA staff.

“The immediate economic benefits of the project will be the 347 construction jobs and 483 permanent jobs,” Essel asserts.

“The nonprofit organization, Construction Industry Research Board has  developed models and formulas for calculating the multiplier impact of construction jobs.

“It is estimated that the $56.7 million development will create have a multiplier of 19.659 jobs across all industries which translates to approximately 1,100 new indirect employment opportunities. In addition, minimally, the 415 annual average of these jobs will generate an additional $2,150,800 ($415x10x52) each year in sales for local businesses through these new employees’  expenditures on lunch and other goods and services.

“Other economic impact factors calculated through the year 2037 includes $20.3 million in additional property tax revenue (includes the $13 million discussed above that will flow to CRA/LA) , $24.6 million in gross (business revenue receipts of which the City will receive 1 %, and $1.2 million in utility user tax revenue “

Essel has made her case. What do you believe?

Collateral Damage: Hollywood Farmers’ Market Threatened by City Hall’s Policies, Failures

EDITOR’S NOTE: The 19-year-old Hollywood Farmers’ Market will go on as usual Sunday morning though its future is in serious jeopardy because of City Hall’s policies that prompted officials to deny it a permit to operate any longer. Community protests won it a month’s reprieve  A Save the Hollywood Farmers’ Market Coalition has formed and will stage a rally at 9 a.m. Tuesday on the City Hall Lawn and then express the concerns of citizens from across LA to the City Council at 9 a.m. Save Farmers Market.pdf South Central Farmers.doc Action Alert and Sample Protest Letter.

This is story about a controversy that contains many of the elements of what’s wrong in Los Angeles, a story of a dirty deal to benefit a sleazy developer and not the public, a story of two valuable institutions on a collision course, a story about the indifference and ineffectiveness of public officials.

It is a story that epitomizes both the corruption and the failure of City Hall.

It is the story in a single particular — one that is occurring all over the city — because of policies of the mayor and City Council and their gross financial mismanagement that has prompted them to close parks and libraries and slash other basic services while raising rates, fees and fines sharply.hollywood-farmers-market-1.jpg

One of their policies — the one that threatens community events everywhere — is the new law that makes farmers’ markets that
block off city streets pay all city costs for street services, cops and everything else and to obtain permission from nearby residents and businesses to even get a permit.

This is part of the mayor’s “full cost recovery” policy that is making taxpayers pay twice if they get city services and even charges city departments like parks and libraries for everything they get from water and power to office and personnel costs.

Exemptions are made, of course, whenever and wherever our elected officials decide to put the public’s money.

One such case, the El Sereno Farmers’ Market, is set on Tuesday to get such an exemption when the Council approves providing $15,000 in public money to keep it going.

The Hollywood Farmers’  Market is not so lucky. The future of many other similar markets and community events of all sorts are also in doubt.

One of the oldest, largest and best farmers’ markets in LA, the one at Selma and Ivar in Hollywood has been operating every Sunday morning for 19 years with 150 farmers, artisans, cooks and bakers..

It is a major community event, drawing crowds of 10,000 people most Sundays.

From the recent massive increase imposed on the thousands of people who grow food in the city’s nine community farms, you might think City Hall is at war against fresh and wholesome food.

But last week, the Council made it the official policy of the city that “food deserts” like the one in parts of South LA, will not be tolerated. New fast food restaurantswill not be allowed any longer in South LA within half a mile of each other and Fresh & Easy won approval to open a new market despite vocal community opposition to granting a series of variances from zoning laws.

You might think the same healthy choice sensibility shown by Jan Perry and Bernard Parks in getting those ordinance passed would be shown by Council President Eric Garcetti, whose political correctness could never be questioned.

But Garcetti isn’t into good food and community vitality as much as providing tax breaks to Hollywood enterprises, subsidies to Hollywood developers and pleasing his patrons among the union leaders and big shots who he hopes will generously fund his campaign for mayor in two years.  .

He has has three years to find a solution to the dilemma of the Hollywood Farmers Market but last month it was denied a city permit to operate any longer.

Community protests won it a reprieve through the holidays but it’s run at Selma and Ivar is over come Jan.1, 2011 unless a solution is found and City Hall backs down. At best, it will be moved and reduced in size by half. At worst, it will be gone entirely.

The obstacle facing the Hollywood Farmers’ Market isn’t the requirement of double taxation imposed on it for the cost of what should be basic community services but the necessity to get of its neighboring residents and business — one business in particular.

In closing off part of Selma and Ivar, the Farmers’ Market limits access to the LA Film School’s parking.

The school says it is flourishing and is now operating seven days a week so it needs full access to all its parking, which means Ivar can no longer be closed off for the market. LAFILMSCHOOL.doc

The result is city officials refused to grant a street closure permit for this Sunday’s market, relenting only when the protests grew loud enough to force them to grant a  reprieve for the holiday season.

The city has offered alternatives near and far but none provide the space or amenities that have from nearly two decades at Selma and Ivar. Nor is sharply reducing the market’s size at its current location acceptable to the non-profit Sustainable Economic Enterprises of Los Angeles which operates the Hollywood and several other farmers’ markets whose future could be in doubt because of the loss of revenue…

this portion of Ivar could result in a loss of fifty-percent
of the certified farmers and a reduction of approximately
one third of the total vendors. It cannot be reconfigured
within the existing neighborhood without multiple ramifications
– including the possibility of losing the Farmers’
Market in its entirety,” the group says at its website..

up a farmers’ market is not simply an issue of moving
a few tents and tables, but is logistically complex,
with many public safety issues involved. Current proposals
for shifting the market provide inadequate space for
the displaced farmers and vendors, raise issues of public
safety or both.”

What elevates this beyond just another of a thousand examples of the city’s inability or unwillingness to intervene in conflicts and provide solutions that satisfy competing needs and values is what is going on just a short block from the Farmer’s Market.

At 1601 N. Vine, at the corner of Selma, is the property that Councilman Eric Garcetti is desperately trying to give away developer Hal Katersky and his Pacifica Ventures, a company that specializes in profiteering on runaway film and TV production.

Give away is an understatement. Garcetti, a man who would be mayor, wants to give Katersky and his partner a $4.6 million gift of public money from the Community Redevelopment Agency to put up a $57 million building that nobody wants or needs.

Twelve times in six months, Garcetti has tried to push the deal through the Council and 12 times he has had to pull it, admitting recently that the serious questions raised by the community must be answered before it will be approved.

Despite bankruptcies and lawsuits, Katersky’s firm has profited from setting up film production studios from Alquerque to Prague where governments are more than happy to steal Hollywood jobs.

Yet, when he bought the 1601. N. Vine property four years ago for $5.45 million and flipped it a month later to the CRA for the same price, the redevelopment agency immediately entered into an an agreement to sell it back to him for $825,000 to build an office building for businesses related to the Hollywood entertainment industry in some way.

If the Council President had put as much effort into solving the market’s problem and cared as much about healthy food and a community activity enjoyed by 10,000 people a week as he does about serving corporate interests, this controversy would have been averted and the problem solved long ago and people would not be coming down to City Hall on Tuesday to protest.

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Garcetti Waffles on the CRA-Hal Katersky 1601 N. Vine St. Project — Finally

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.
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Garcetti Waffles on the CRA-Hal Katersky 1601 N. Vine St. Project — Finally

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.
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Blinking Garcetti Needs to Give Up and Kill the 1601 N. Vine St. Subsidized Office Project

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.