February 28, 1998 - From the February, 1998 issue

Inside Planning: McKinley Building to be Demolished, Playa Vista Bonds, and more!

Playa Vista Bonds Fail in LA Council 

The L.A. City Council failed to approve an up-to-$70 million tax exempt bond issue that the Playa Capital Company had hoped would help finance affordable housing development at their Playa Vista project. Negotiations between Playa Capital and Council Member Ruth Galanter's office hinged ostensibly over the mix and number of units. But insiders suggest the developer's lack of a deal with DreamWorks Studios to locate at Playa Vista may have exacerbated the issue. There could be another chance for the bonds in the next fiscal quarter. Meanwhile, both DreamWorks and Playa Capital confirm that negotiations are ongoing between the two parties. 

Increased Federal Housing Tax Credits Proposed 

Vice President Gore announced last month that the Clinton Administration's FY 1999 budget proposal includes a 40% increase in funding for the low-income housing tax credit program (LIHTC). Two bills already introduced in Congress (S 1252 and HR 2990) propose similar increases, which would amount to $1.6 billion over the next five years and add 36,000 affordable units annually, over and above the 75,000 to 90,000 currently supported by the federal program. 

Landgate: High Court Weighs Takings 

L.A. Attorney Ben Reznick and the State Attorney General squared off earlier this month before the State Supreme Court in the landmark Landgate, et al v. California Coastal Commission case. If the court sides with Landgate, it will affirm that Lucas v. S. Carolina Coastal Commission—

in which the court found a taking had occurred but awarded no monetary damages—is to be followed in California. This case hinges on the Coastal Commission's denial of a minor L.A. County-approved lot-line adjustment that property owner Landgate needed to develop a residential use on its land. A subsequent two-year court battle determined that the Coastal Commission had no jurisdiction over the lot line adjustment. So, Landgate sued for compensation for the time its land was idled by the Coastal Commission. Lower courts sided with Landgate, dismissing the Coastal Commission's contention that the two-year judicial process was a part of the normal entitlement process and that time spent in court fighting what was found to be an erroneous decision isn't compensable. The high court is expected to rule in approximately 90 days. Landgate's attorneys say if lower court rulings are overturned, they will seek U.S. Supreme Court Review. 

Clinton Proposes 4% Budget Hike for HUD 

In his FY1999 budget, President Clinton proposed $25 billions of net budget authority for HUD—a 4% increase that falls short of the expected 10% hike. Funding to some HUD programs will still grow 10% over last year's levels. But the overall increase is small enough that it is not likely to raise the ire of the Republican-controlled Congress, insiders say. Bigger conflicts are likely to concern new initiatives like the HOME bank and the Regional Connections Project. 

HUD Pursues Community Empowerment Fund 

HUD's Community Empowerment Program, which merges the Economic Development Initiative and the Sec. 108 Loan Guarantee Fund, could receive $400 million in startup funding in FY 1999. HUD officials say the program would eliminate local governments' risk of losing CDBG grants when borrowers default on Sec. 108 loans. After the program establishes a successful track record, a secondary market insurer could be created. The original working name, "Eddie Mac/ Community Empowerment Fund," was short­ened after it had been determined there are already too many "Macs." 

McKinley Building to be Demo'd 


Demolition work has begun on the historic McKinley Building on Wilshire Boulevard near Western Avenue following the L.A. City Council's approval of an embattled demolition EIR for the structure. The move has prompted outcries from L.A. City Council Member Laura Chick, the L.A. Conservancy and other preservation advocates. Building owner Dr. Robert Lamer, M.D. won the support of the neighborhood and City Council Member Nate Holden in his ongoing calls for demolition, claiming the 1926 courtyard structure suffered irreparable damage from the 1994 Northridge Earthquake and Wilshire Boulevard subway construction. No plans to redevelop the site have been announced.

Ahmanson Ranch Grading to Begin 

Home Savings of America's Ahmanson Land Co. has agreed to buy Bob Hope's 4,369-acre ranch near Simi Valley and his 339-acre Coral Canyon property in Malibu. This clears the way for grading and eventual construction of Ahmanson Ranch's 3,000 homes, commercial complex, and golf resort. Under a 1992 agreement with Ventura County, Ahmanson Land must donate 9,947 acres of undeveloped land as a precondition to beginning groundwork on the project. 

Senate OKs Farmland Bill 

The Senate approved Jim Costa's SB 1182 last month, a supplement to the Williamson Act to protect agricultural land from urban development. Under the measure, certain agricultural landowners would qualify for reduced property tax assessments provided they place their agricultural property into so-called "farmland security zones" for at least twenty years. 

Riordan Offers Community Spending Plan 

Mayor Riordan recently released a $160 million housing and community development spending plan. This figure represents a $7 million drop in CDBG funds. Highlights of the plan include $31 million for housing programs, $10.4 million for housing programs for people with AIDS, $3.5 million, continued funding for the Mayor's "targeted neighborhood initiative,"$ 1.5 million for L.A.'s after-school program, LA's BEST, and $2 million for childcare facilities.

L.A. Gets Empowerment Zone

After much anticipation, Los Angeles has finally been given an empowerment zone, which will encompass parts of East L.A., South Central Los Angeles, and Pacoima. Business owners in the zone may receive $3,000 in federal tax credits for each employee who lives and works within the zone. Los Angeles may receive up to $600 million a year in federal tax credits to encourage development in underprivileged neighborhoods. 

For the Record 

Last month's edition of The Planning Report misstated Santa Monica City Planning Commissioner John Zinner's title. He is the Commission's Chair.


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