January 30, 1991 - From the January, 1991 issue

Woo on Hollywood Redevelopment: Simon/CRA Deal Pivotal

With the recently-announced agreement between the CRA, Councilman Michael Woo and Melvin Simon and Associates for CRA assistance to the Hollywood Promenade project, Hollywood redevelopment is reaching a critical stage. 

Although this major mixed-use development proposed to wrap around the Chinese Theater has been billed as the catalyst for Hollywood, the proposal to provide CRA assistance to the project has drawn opposition, particularly from affordable housing advocates.

Given the Simon controversy and the present uncertainties of the real estate market, The Planning Report spoke with Councilman Michael Woo about the future of Hollywood redevelopment.


"We have an open door for talking to other developers, but the availability of CRA investment funds is very limited."

Where will Hollywood Redevelopment be going in 1991 and what do you see as the major accomplishments of 1990?

I think 1991 is going to be a turnaround year for redevelopment in Hollywood. In the spring, we will see the reopening of the El Capitan Theater operated by the Disney Company which will be an extensive renovation of an historic site. We will also see the start of operation for a Farmers’ Market off Hollywood Boulevard which will be a magnet for local residents on weekends.

In a few weeks I expect to see the approval by the CRA Board and the City Council of an agreement with Melvin Simon and Associates of the Hollywood Promenade project. Also, by 1992 we’ll see the opening of the Hollywood Galaxy project. 

During 1990 the main accomplishments have been the completion of the Hollywood Transportation Plan and the Hollywood Boulevard Urban Design Plan, which will make a real difference in the flow of traffic and in creating a higher standard for development on Hollywood Boulevard.

What has been your reaction to the Hollywood Transportation Plan?

I think the transportation plan offers a lot of good ideas for the future. The plan specifically addresses the problem of through traffic clogging the streets of Hollywood—approximately 70% of the cars on Hollywood streets are merely driving through to another part of the city. The ideas of one-way street pairs, broadened capacity of Santa Monica Boulevard, and the neighborhood protection component hold promise for the future. 

Could you describe the agreement reached on the Simon project and assess the prospects for its approval?

Here’s the agreement: the CRA would provide $4 million a year for 12 years. This money will come entirely from Hollywood sources—a combination of parking meter money and tax increment funds generated within Hollywood. 

In return for this investment, the CRA would receive a 25% interest in the developer’s share of the project. The City would not only earn back the $48 million investment but could potentially earn profits. The down side would be if there is a prolonged downturn in the economy, but in the absence of a cataclysm, the prospects for a return on the City’s investment are good. 

By late January we expect the “exclusive right to negotiate” agreement to go before the CRA Board; it will then go before the City Council. I expect very close scrutiny from the Council’s Community Redevelopment and Housing Committee, as well as from the full Council. 

During the negotiation process, which went on for many months, I gave specific instructions to the CRA staff to come back with an agreement I could defend publicly before the Council and the CRA Board. I feel the proposed agreement reaches that goal.

Will this agreement serve as a model for future projects in Hollywood, or is this a one-time arrangement made necessary by the importance of the Simon project?

The Simon project is historically important for Hollywood because it would be the first major project on an historic site. 

We expect the Hollywood Promenade project to serve as a catalyst in Hollywood and we are hopeful that an upturn in the economy a few years from now will make it easier for other projects to arrange private financing. 

I know that other developers are interested in arranging CRA investment in their projects, but we are limited in the amount of subsidy available. We have an open door for talking to other developers, but the availability of CRA investment funds is very limited. 

The existing tax increment generated in Hollywood is being tied up by the County as the result of a lawsuit which the CRA won but is currently on appeal. But if we can do this much without direct tax increment, think of what we can do when the County is willing to release those funds.

So if the Bass team across the street from the Hollywood Promenade approached you and the CRA, what would you tell them?

We would consider their request, look at their numbers, and ask a lot of questions. We will deal with all requests on a project by project basis. I wouldn’t rule out a CRA investment, but there won’t be very much money available, especially in the early years.

How would you describe the CRA’s management of the Hollywood project to date?

In the early years of the Hollywood project I was one of the people criticizing the CRA’s conduct, especially with regard to its community relations effort—I didn’t think the CRA did a good job listening and responding to people in the community. 

More recently, the CRA has shown a significant improvement. It has worked closely w ith the neighborhood groups, especially with many of the neighborhood watch organizations. So I think we’ve seen a real turnaround.

How did you react to the suggestion made in last month’s issue of The Planning Report by Larry Kaplan (President of the Hollywood Chamber of Commerce) that the CRA should stop being an impediment to the redevelopment of Hollywood and start focusing on the completion of real estate projects?

Advertisement

I don’t want to see the Agency be an impediment but I don’t believe it is an impediment right now. 

Part of the problem is that we don’t have a lot of money spent to promote redevelopment activities. If we can persuade the County Board of Supervisors to release the Hollywood tax increment funds, that would make a critical difference, and I hope that the election of a new Supervisor will help. 

Even if the CRA had a larger amount of money to spend in Hollywood, that would not necessarily mean the CRA should provide gifts of public funds to private developers. It’s very honorable to make money—I don’t mean to disparage private businesses thriving in Hollywood—but at the same time they should not necessarily be lining up for a gift of public funds. 

The City and the CRA must be very careful in how we use our limited resources. While I encourage the idea of entrepreneurs stimulating interest in Hollywood, I also have a public responsibility, which is broader than that of the Hollywood Chamber of Commerce or individual business owners, to protect against waste of public dollars.

You mentioned that 1990 brought the draft Hollywood Boulevard Urban Design Plan. What has been your reaction to the plan and how has this process shaped what Hollywood will look like?

The Urban Design Plan will assure a higher standard of urban design along Hollywood Boulevard. I have been heartened by the response from the Urban Design Committee: chaired by Barton Myers which has done an outstanding job. 

I agreed with about 95% of the Committee’s recommendations and also supported the overall recommendations of the Hollywood Community Advisory Council. 

I especially appreciated the attention given to pedestrian needs and pedestrian amenities, height limits to support the creation of an urban village, and I hope the CRA will in the coming years be able to support small-scale improvements such as street furniture, street lighting and signage that were identified in the plan.

What are your expectations and fears about Metrorail in Hollywood?

In the long term Metrorail will have a great positive effect on Hollywood redevelopment. Smart developers know that it can add a lot to a project’s value. 

In the short term, we’re having some problems in getting the Rail Construction Corporation to learn the lessons which seem obvious from Metrorail construction downtown. I have gone to the wall to write into the contracts for the Hollywood segment some protection for merchants and pedestrians in the construction area. 

Unless they are written into the contracts, the contractors will object to these common-sense ideas, complaining that they will add to the cost of the project. 

We are talking about requiring construction crews to sweep the sidewalks, and requiring better signage to indicate that stores remain open for business. The RCC has not been very responsive, but we are continuing to push them on this.

With the opening for the Planning Director’s position, what do you, as a member of the PLUM Committee, expect to contribute to the selection process and what kind of person are you looking for? 

The City of Los Angeles needs a combination of a strong administrator and a visionary. This is not an easy combination to achieve, and we may need to consider a package of a Planning Director with a Deputy Director who combines administrative and planning skills. It is essential that the Mayor and the Council reach a consensus of our expectations of this new management team. 

Without such a consensus the new Planning Director is likely to fall into the same trap that Ken Topping discovered—that is, the trap of unlimited demands on the Department’s resources without an increase in resources. 

While the job could be attractive to many individuals, I think that any applicant would be crazy to take the job unless there is a stronger commitment from the Mayor and Council to provide the resources necessary for the new Director to live up to their expecta­tions.

As we begin 1991, what expectations do you see coming from your constituents?

My district (and the city gener­ally) is coming to a crossroads. On the one hand, there is a growing level of dissatisfaction with develop­ment and traffic. On the other hand, there is a desire for more direct action by the government to deal with these problems. The dissatisfaction could lead to a negative response from the public—many aspects of our community take a negative, NIMBY attitude to problems. 

I only hope that there may be enough of a constituency to support a responsible approach—one that may enable city government to get beyond the morass in which we find ourselves to develop a more positive consensus for the future of Los Angeles.

<

Advertisement

© 2022 The Planning Report | David Abel, Publisher, ABL, Inc.