April 13, 2006 - From the April, 2006 issue

MTA, Venice Developer Craft Proposal to Replace Obsolete Bus Yard With Mixed-Use Development

As the Los Angeles region grows and becomes ever-more complex, the complexity of land-use conflicts follows suit. Nowhere is this trend more evident than in Venice, where the MTA is trying forge a deal that would allow it to vacate an aging bus yard, but only if it can get the blessing of Venice neighbors and a variance from the Venice specific plan. To illustrate this unfolding saga and its potential win-win-win outcome, TPR spoke with MTA Deputy CEO John CatoeJerry Neuman of Allen Matkins, representing RAD development; and LA City Councilmember Bill Rosendahl.


Bill Rosendahl

In last month's TPR, LAEDC Chief Economist Jack Kyser said that industrial land is becoming scarcer and more expensive in the LA area. What challenges does this scarcity present for Metro and its bus operations, especially when it has to bid against private developers for land in the LA basin?

John Catoe: It's a tremendous challenge for us.

Our current fleet has increased from about 2,100 to 2,600 buses over the last couple of years due to the Consent Decree and the demand for our bus services. Currently, we have 11 bus divisions around the county, and they are maxed out. We have been looking for land to build new facilities, but it's very difficult to find facilities or land that is cost-efficient and appropriate for our uses, especially on the Westside.

The MTA has made clear that it is especially eager to vacate its bus yard in a residential area of Venice. What makes that yard obsolete and available for trade?

John Catoe: First, it's our oldest division. It's more than 100 hundred years old. All of our other divisions house more than 200 buses. This division currently houses 79 buses, all of which are diesel, even though we are making the transition to compressed natural gas.

The other problem we have at that division is that, because of the residential growth around it over the past 100 years, we agreed to restrict our operating hours. Every other division we have operates 24 hours a day, seven days a week, but this facility has voluntary restrictions so that we are not working past 10 p.m. or on weekends.

How hard has it been for the MTA to find a replacement site?

John Catoe: We've been looking for a replacement for the Venice division for more than 25 years.

We had identified approximately 50 sites, but for various reasons—land use restrictions, objections from the community, the locations, funding constraints—we were not able to relocate. However, just over three years ago, we received a proposal from RAD development, whom Mr. Neuman represents, for a land swap: They would take the Venice division, and in exchange, they would build us a division that was larger and would more closely meet our needs at a location just off of Jefferson, between National and Rodeo.

Jerry, how did this swap proposal come about? What does RAD envision for these two properties?

Jerry Neuman: The deal came about when Bob D'Elia, the owner of RAD, recognizing that the MTA had been searching for more than 20 years for a parcel of property for the Division Six station, came across the property on Jefferson. It is a predominantly industrial site surrounded by mostly industrial uses, and it is not very proximate to any residential community.

After an extensive investigation, the MTA determined that it was eligible and would reduce operating cost significantly. They then entered into a memorandum of understanding and exclusive right to negotiate with Mr. D'Elia for the swap of the Venice yard. That was followed up by environmental impact reports studying the entire project and potential development of the Venice yard, all of which has been subject to a variety of hearings and public notices. It's been a very transparent process.

Mr. D'Elia determined that if they could develop the Venice yard with sufficient density, they would be able to both pay for the land they had acquired on the Jefferson site and build a new bus yard on the Jefferson site, because part of the requirement of the swap is that a new facility has to be built for the MTA. So, in essence, the Venice land has to carry both the value of the land and the cost of the MTA building, which is very expensive.

John Catoe: That facility that would fit up to 150 buses. It would get a LEED Silver certification, would better meet our needs, and would be 100-percent CNG. We could operate the facility seven days a week, 24 hours a day. The new facility is fully entitled, and the EIR is certified.

What will RAD need to build on the Venice site for this land-swap deal to be economically viable?

Jerry Neuman: Currently the density of the site, including bonus density, would allow the development of approximately 234 units of artists' loft-type residence units under the current zoning for the site.

RAD proposed changing the zoning of the site to allow a general residential living community, so it wouldn't have to be artists-in-residence units or a live/work development, but rather just a traditional residential site. RAD proposed 201 units with approximately 13,000 square feet of commercial space. It was approximately 1.888:1 FAR, which would provide RAD with sufficient square footage to make the investment work.

Based on that proposal, what impediments have you run into?

Jerry Neuman: While the community wanted the bus yard moved, a vocal segment of about 15 to 20 residents have vehemently opposed the project and said that they wanted to adhere strictly to the specific plan for the North Beach area of Venice, which imposes a height limit of 35 feet.

We were proposing in effect a ten-foot height variance that would provide 130 additional parking spaces to the community, where none exists today, as well as housing without the replacement of any existing housing; we were doing 10 percent very low-income housing and 10 percent workforce housing. We would also create a public walkway between Pacific and Main, and we were providing the opportunity for commercial development along Main St. Then we scaled back the edges so that the edges of the site would conform to the 35-foot limit, at least as they relate to the street.

We have hundreds of letters from people who want the bus yard to go away, and they believe that the trade-off between the bus yard and affordable housing, some parking, and a walk street are well worth the additional height in the center of the project. But that small segment of the community pushed hard against any variances from the specific plan, and, quite frankly, they have the ear of Councilmember Rosendahl. He has said that he actually wants to reduce the density that is currently allowed to only about 90 or 100 units.

The reality is that at the density that the council office is talking about, there will never be enough value in that small of a development to afford property and build a new facility.

Councilmember Rosendahl, why are you uncomfortable with the project that RAD has proposed and asserts it needs in order to cover costs?

Bill Rosendahl: That type of density is unacceptable.

Our infrastructure can't handle it; our neighborhoods can't handle it. I felt comfortable when we were talking about something closer to a 1.5:1 zone change—somewhat complementary to the neighborhood. That density would meet the profit motive for the developer, the need for housing near the beach, and a certain amount of ambience that fits with the Venice specific plan, and character and scale of community.

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Also, this is a different day than it was four years ago when MTA and this developer struck a deal. No one knew that the Expo Line would be going right by RAD's existing property, or that there would be a need for housing next to the Expo Line.

I don't buy the claims that they need to have this much to make a deal. I can only tell you from a distance that this is more like the developer saying to MTA, "Get me more money so that I can at least go forward with this potential project, or I am going to pull out of the deal because this other property now has more value."

Jerry Neuman: While it is true that the Jefferson property has risen in value, the rise in construction costs have more than outstripped any additional income the developer could have realized by getting greater density, and the benefits of greater density only go to offset the developer costs in the MTA buildout.

Finally, the only benefit the developer could get from the increase in the value of Jefferson would be in the termination of the deal with the MTA and the development of the Jefferson site.

RAD's current proposal includes some affordable units. Are those proposed units not enough for you or not attractive enough?

Bill Rosendahl: Affordable housing is always a plus for me. You can certainly get my interest if you're talking about middle-class and affordable housing for working people in my district. The bigger question for us at that moment was with that piece of land on Main Street.

To put that kind of density and that kind of a height there would blow the whole Venice experience away. I wasn't going to go that far, and it didn't need to go that far, for the developer to make a profit.

Given that this entails, essentially, a choice between a bus yard and a mixed-use development, what does this contest say about the nature of specific plans that govern only one neighborhood, or even just a part of a neighborhood?

Jerry Neuman: Everybody recognizes that specific plans, by their nature, are not always flexible and can be shortsighted. They do not always grow or change with the community, react to new opportunities, or adapt so that communities can grow or be enhanced. This one is no different—except that this plan has some language that actually provides for the opportunity to replace the bus yard with mixed use. When they wrote the specific plan, they actually thought of this possibility.

However, those elements of the specific plan are being ignored in favor of the idea that the plan that applies to the neighborhood overall should encumber the bus yard as well.

When the community considers this project, is there any sense that this swap meets a regional need, or is it just a local land use issue?

Jerry Neuman: I think everybody recognizes that, from a regional perspective, the MTA is under a mandate to increase bus ridership and increase availability of public transit. I think the council office recognizes that.

This move would add buses to the exact area where people need buses, and would eliminate traffic to the yard in Venice. Everyone recognizes that benefit. However, the development of the site after the MTA leaves has been regarded as a local issue, and I think that is a short-sighted viewpoint on the part of both the community and the Council office.

It's important to recognize that sometimes there are competing land uses, and within those land uses we have to find the win. I think it is an opportunity to find that win, and I think that we have gotten very close. But certain local interests took over, and often that is to the detriment of the overall community.

What will MTA do if this neighborhood opposition blocks the deal? Might this be the only opportunity for the neighbors in Venice to say goodbye to that bus yard?

Bill Rosendahl: It's an opportunity, but I don't think people need to pushed and squeezed into a density and height that make no sense for the neighborhood.

People who live where they live have rights too, and the Venice specific plan is clear. I don't believe in all these exceptions, which will destroy the quality of the neighborhood. I've asked my constituents, "Could you live with the bus yard if, in fact, the bus yard didn't move at this moment?" They have said, "Well, it's the devil we know versus the one that we don't."

I personally don't want a bus yard in Venice; I would like to see it move. It's been there, I'm told, 100 years, and it is in a dense area whose houses probably weren't there 100 years ago, or even 50 years ago. We're looking for other spots for MTA, and I know they're also looking for other spots. Maybe there is somewhere else that this bus yard can go.

John Catoe: We thought we had a solution that would get us out of that community and provide us with a facility where we could operate and maintain our vehicles 24 hours a day, seven days a week. Now this deal seems to be in jeopardy. But I still have to operate the services, so at some point we're going to have to expand the hours in Venice and bring in more buses.

Furthermore, based upon a new order under our Consent Decree, we have to expand service even more, and we're going to have to implement second and, eventually, third shifts at the Venice facility.

Does that mean buses will be driving up and down neighborhood streets at all hours?

John Catoe: Not only driving down the street at all hours, but also maintaining those buses at all hours. The best time for us to maintain our buses is the graveyard shift, from 10 at night to 6:30 in the morning. We've restricted our activities out of consideration to the residents, but now we are getting boxed in.

I don't want a threatening tone to come across at all; I don't intend for that to be the case. Obviously, this agency realizes that it needs to be a good neighbor, and that's what we're trying to be. However, our first obligation is to operate our services, and I think it is going to be a real shame for us and a loss for the residents of Venice, the bus riders, and tax payers if this project does not go forward.

Editor's note: Due to scheduling constraints, the interviews for this article were conducted separately.

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