October-November 2001

ELECTION UPDATE

TOM LABONGE VICTORIOUS IN COUNCIL DISTRICT 4
CCA-endorsed candidate Tom Labonge was elected to represent the 4th District on the Los Angeles City Council by a wide margin over opponent Beth Garfield in a runoff election held on October 23rd.  Official results showed a 62 to 38 percent advantage for the former Department of Water and Power Community Affairs Manager.   Council Member Labonge will serve on several key Council Committees, including as the Chair of Audits and Government Efficiency, Vice Chair of Public Works and as a member of Education and Neighborhoods.  CCA congratulates Tom on a hard fought campaign and looks forward to working with the newest member of the City Council.

CCA ENDORSES WENDY GREUEL FOR COUNCIL DISTRICT 2 SPECIAL ELECTION 
he CCA Government Relations Committee scheduled candidate interviews for the Council seat held by recently retired Council Member Joel Wachs.  The Committee interviewed DreamWorks Executive Wendy Greuel.  Though expected to attend, Assembly Member Tony Cardenas was unable to participate.   Committee Chair Steve Weston of Weston Benshoof, CCA President Carol E. Schatz and other committee members interviewed Assemblyman Cardenas in a meeting the following week.  All involved were impressed with Assemblyman Cardenas, his achievements and his plans for the District.  Nonetheless, committee members believed Ms. Greuel offers a clearer vision and agenda aligned with much of what CCA and its members champion.  After much deliberation, the Government Relations Committee recommended Wendy Greuel for endorsement.  The Executive Committee approved the recommendation unanimously at its November meeting.    The Council District 2 Special Election will take place on December 11th.

MAJOR POLICY INITIATIVES

BUSINESS AND DEVELOPMENT COALITION PRESS CONFERENCE ON HOUSING
On October 15th, CCA hosted a press conference in conjunction with coalition partners, the Building Industry Association (BIA) and the Valley Industry and Commerce Association (VICA), to unveil a joint "white paper" on affordable and workforce housing.   The position paper, entitled "Build It - We are Already Here" outlines the business and development community's strategies to solve the affordable housing crisis, including building and preserving "workforce" housing, providing real development incentives, and recommending funding sources for the City's Affordable Housing Trust Fund.

CCA wishes to thank all press conference participants including Ray Pearl of the BIA, VICA's Carolyn Cassavan, Allan Kingston of Century Housing, Jack Kyser of the Los Angeles Economic Development Corporation (LAEDC), Housing and Land Use Chair Rita Illig Liebelt of Illig Construction, Greg Vilkin of Forest City Development, and Jeff Lee of Lee Development.   CCA would also like to thank our entire Housing & Land Use Committee and the white paper subcommittee, whose members worked so earnestly to develop these strategies and recommendations.   In particular, CCA thanks Mitch Menzer of O'Melveny & Myers for his great contribution and hard work developing the coalition's housing policy.

At an October 11th meeting, CCA CEO Carol Schatz, Ray Pearl and Jeff Lee presented the white paper to Mayor Hahn's Chief of Staff Tim McOskar.  The white paper was also delivered to the City Council, and to the City's Housing and Planning Departments.  On November 9th, the Los Angeles Area Chamber of Commerce joined the business and development coalition and co-signed the housing white paper.  The Chamber is working with CCA, BIA and VICA to lobby the City Council regarding the business community's recommendations to resolve the affordable housing crisis. For a copy of the housing white paper, please visit CCA's Web site at www.ccala.org or contact Diana Warren, Director for Legislative Affairs at 213-624-1213.           

AFFORDABLE HOUSING FINANCING AND THE $100 MILLION TRUST FUND In July, the City Council adopted a Pacheco motion requesting that the Chief Legislative Analyst, in conjunction with the Housing Crisis Task Force and the Los Angeles Housing Department, present within 90 days a full listing of funding options for the City's Affordable Housing Trust Fund. The final report and funding option recommendations were released on November 2nd.    While CCA is pleased that the report includes several funding options suggested in our white paper on housing, we were disappointed to see that "in-lieu fees from an inclusionary policy" was also included as a funding source for the Trust Fund.   Inclusionary zoning requires developers to set-aside a specific percentage of their development at below market rate for use as affordable housing stock.   Often, inclusionary zoning ordinances do not offset the cost to developers and market-rate tenants who must subsidize the affordable units.   

CCA and our coalition partners, BIA, VICA, and the Chamber believe that a citywide inclusionary zoning policy will impede the creation of affordable housing by making housing development economically unfeasible.  On the contrary, past experience has demonstrated that incentives, rather than exactions, will produce more affordable housing.   Moreover, the City Council recently commissioned an inclusionary housing feasibility and nexus study that will not be completed for several months (see following item for more details regarding this study).

On November 14th, the Housing Department presented its Affordable Housing recommendations to a joint meeting of the City Council's Housing & Community Development and Budget & Finance Committees.  Carol Schatz, Jeff Lee and Larry Kosmont of Kosmont Partners gave compelling testimony, which explained the coalition's position and recommendations for financing the Affordable Housing Trust Fund. 

The joint committee took no action, however, as Council Members await reports from the City Chief Administrative Officer (CAO) William Fujioka and Chief Legislative Analyst (CLA) Ron Deaton regarding various funding sources for the Trust Fund.  These reports should be completed in the next several weeks.  Council Committee members agreed to wait for a complete financial analysis since many fear that necessary City services could be jeopardized if the Affordable Housing Trust Fund is fully funded in this fragile economic period.  

We would like to thank those individuals who joined CCA as the coalition met with City Council Members and their staff in anticipation of the joint committee hearing.  Participants included CCA CEO Carol Schatz, members Jeff Lee and Mitch Menzer, Ray Pearl of BIA, Larry Kosmont and Melissa Infusino of the Chamber, Joan Hoffman and Scott Schmidt of VICA and CCA Staff.  CCA has scheduled additional meetings with City Council Members, CLA and CAO to reiterate our support for the Affordable Housing Trust Fund and to address our concerns about inclusionary zoning.   We will keep you informed as the Trust Fund discussion continues.

LAHD INCLUSIONARY ZONING AND REPLACEMENT HOUSING STUDY       On October 24th, the Housing Department received approval from the City Council to execute an agreement with a consultant to prepare an inclusionary zoning and replacement housing study for the City.  The study, to be completed in 90 days, will explore the feasibility of implementing inclusionary zoning and replacement housing ordinances citywide, as well as evaluate the existence of a legally required nexus.  In addition, the Housing Department recommended the establishment of a Technical Steering Committee to assist with an analysis of the study's results.  The Steering Committee would include representatives from the Housing Department, the City Administrative Officer, the Chief Legislative Analyst, the City Attorney, the Departments of Planning and Building and Safety, CRA, the Housing Authority, the Housing Crisis Task Force and  "other stakeholders."  CCA will endeavor to participate in this Steering Committee. 

It should be noted that the Housing and Community Development committee elected to delay the preparation of a linkage fee nexus study.  A linkage fee study would assist in determining the feasibility of implementing a linkage fee on commercial development after determining that there is a nexus between commercial development and the demand for affordable housing.  A spokesperson for the Housing Department stated that the linkage fee study would take approximately 9-10 months to complete and would likely be prepared after completion of the inclusionary zoning and replacement housing study. 

DOWNTOWN REBOUND PLANNING GRANTS
Los Angeles continues to see benefits from last year's Downtown Rebound legislation, sponsored by CCA and carried by Assemblyman Gil Cedillo. In addition to the $18 million in adaptive reuse funds secured by Downtown developers, two $75,000 planning grants were recently awarded to the City of Los Angeles.  The kickoff meeting of the Downtown Rebound Planning Grant Advisory Group, held on August 21, was attended by nearly 30 participants who joined the Los Angeles Housing Department to briefly discuss the grants, and assign working groups for some initial tasks.  Participants include representatives from the Mayor's office, City Council, various City departments, private developers and organizations (including CCA), non-profit developers/service providers, and the Downtown Neighborhood Council.  A working group was created for each of eight studies: Brownfields; Coordinate Government Activities; Telecom; Transportation; Amenities; Residential Market Survey; Analysis of Building and Fire Codes; and Parking. 

The scope of work for the planning grants is complete.  The Committee is now accepting bids for the various studies and contracts will be awarded shortly.  CCA will keep you updated on the progress of these very important studies. 

DOWNTOWN POLICY ISSUES

DOWNTOWN LOS ANGELES NEIGHBORHOOD COUNCIL (DLANC)
The Downtown Neighborhood Council Governance Committee met many times over the past few months to finalize the council's bylaws, which were sent forward to the general membership for ratification on October 16th.  The final bylaws establish a 27-member Board of Directors with 11 members representing residents, eight members representing business interests, three members representing arts, cultural, and education interests, three members representing social service providers, and two members representing non-resident workforce.

At the November 5th DLANC meeting, CEO Carol Schatz gave in-depth presentation on the role of CCA and its history advocating on behalf of Downtown.  The presentation was well received by the audience and served to introduce many new residents to CCA and its ongoing efforts to revitalize the Central City. 

DLANC formation meetings are nearing completion as our neighborhood council begins to prepare its paperwork for submission to the City's Department of Neighborhood Empowerment (DONE) for certification.  Following DLANC certification, a series of local district elections will be held to fill the council's Board of Directors.  CCA will keep you posted on the eight district elections to fill the "business-interest" seats.  We encourage all business and property owners to get involved in the Downtown Neighborhood Council and participate in the upcoming elections.

DOWNTOWN DEVELOPMENT PLAN
CCA is putting the finishing touches on our Downtown Development Plan.  After dozens of meetings with CCA members and other stakeholders, CCA is pleased to include contributions from a variety of individuals and institutions that share our desire to revitalize Downtown.   In particular, CCA would like to thank Eli Broad for his recent input.  The final plan will include principles and guidelines for making Downtown more resident-, visitor-and development-friendly, and will show the areas for residential as well as commercial investment and development.

ADAPTIVE REUSE ORDINANCE
The Adaptive Reuse Ordinance was originally adopted in April 1999 to relax the building and permitting process for renovating pre-1974 buildings in the greater Downtown area.   At a recent City Council Planning and Land Use Committee Meeting (PLUM), CCA was successful in adding the Central City West Specific Plan area to the original ordinance.    The Planning Department's Code Studies Section is completing their analysis regarding the addition of Central City West, as well as Chinatown and portions of the Eastside, in a report due to the Council in several weeks.  Also, in late October, the City Council approved a portion of the ordinance that allows old hotels in the plan area to be converted to housing.   CCA will keep you informed about all adaptive reuse news.    

L.A. SPORTS AND ENTERTAINMENT DISTRICT (STAPLES PHASE II)
On September 5th, the Los Angeles City Council gave final approval for the $1 billion Sports and Entertainment District.  Specifically, the City Council voted 11-0 to allow construction on the mixed-use project, which will consist of a 1,200-room Convention Center hotel, a second hotel with 600 rooms, retail, entertainment, restaurant and new convention space, a 7,000-seat live theater, 500 residential units and a parking structure.

It should be noted that the City Council put off a decision until later this year on whether to help finance the Convention Center hotel with public funds.  The L.A. Arena Land Company has stated that the city will need to subsidize the hotel to make it feasible.   Nonetheless, Council Members passed a resolution asking the developer to work in good faith to get the hotel running as soon as possible.  

In a related note, CCA is pleased that its plan to extend the Sports and Entertainment Streetscape program north to 7th Street is moving forward as planned.  On November 14th, CCA's Figueroa Corridor Committee hosted a "focus-group" presentation by the Planning Department, Landscape Architect Pat Smith and Bureau of Street Services General Manager William White to unveil and discuss the streetscape plan.  There has also been considerable discussion at City Hall that funding "may be available" to complete the plan.  Special thanks to Council Member Jan Perry and her staff for their hard work. 

NEW CRA BOUNDARIES
The Community Redevelopment Agency (CRA) recently released information regarding the election of a Project Area Committee (PAC) for the proposed City Center Redevelopment Project.  A PAC is formed to advise the CRA on goals, priorities, formulation of the annual work program and budget.  Terms of office are for one and two years.  PAC members attend monthly meetings and actively participate in all deliberations. The City Center Redevelopment PAC will have 15 members: four residential; six business and commercial; three manufacturing and industrial business owners; and two community organizations.  CRA is hoping to obtain Council approval for the new Project Area by April 2002.  

This new redevelopment area will help shape the future of Downtown and CCA strongly encourages its members to register to vote in this important election.   Voter registration will take place through election night on December 4th.  Please call Director of Legislative Affairs Diana Warren at (213) 624-1213 for election information.   

PREDATORY LENDING
The City of Los Angeles has initiated proceedings leading up to a potential Predatory Lending Ordinance.  A City ordinance would provide an additional layer of regulations to an already heavily regulated climate.  Predatory Lending is a practice by unscrupulous companies and individuals who prey on first-time homebuyers and mortgage refinancing customers.  Due to difficulty in obtaining financing with a legitimate banking institution because of a poor credit rating, customers are lured into financing a loan at a higher percentage rate with a predatory lender.  After several months of extremely high payments, a customer is forced to sell or is forced into foreclosure on the property.  This practice often occurs in minority neighborhoods, with the elderly or those living on a fixed income.  CCA is working very hard to assist its members that are legitimate lenders, but that may be affected by this potential ordinance, including Washington Mutual, Wells Fargo and Bank of America. 

Recently, banking coalition members met with Council Member Mark Ridley-Thomas to discuss the issue in greater detail.  Members informed the Council Member about their very proactive education programs that  help communities protect themselves from predatory lenders. The City has agreed to not proceed at this time as it awaits legal proceedings involving the City of Oakland. 

DOWNTOWN CONSTRUCTION MANAGEMENT COMMITTEE (DCMC)
The Downtown Construction Management Committee (DCMC) is designed to help regulate and streamline street-cut, construction and film permits.  The DCMC will act as a clearinghouse and coordinator of permits to prevent cutting and re-cutting of the same streets.  The boundaries of the one-year pilot plan are the Santa Monica, Harbor and Santa Ana Freeways and the LA River.  In addition to mitigating traffic and placing all street cutting on a master schedule, the DCMC will cut the length of permitting from over 30 days to just seven.  Council Member Pacheco added a friendly amendment that will allow Downtown BIDs to have non-voting status on the oversight committee.  At CCA's request, the full Council agreed unanimously to add the BIDs.                                             

The first meeting of the DCMC was held on November 1st where City staff presented a version of the bylaws.  Several entities including CCA members Pacific Bell, EIDC, and the Downtown Center Business Improvement District  (DCBID) voiced their concerns over lane closures and last minute permitting for filming.  CCA will continue to monitor all DCMC activities.

BELMONT UPDATE
The LAUSD has received several proposals for environmental mitigation and completion of the Belmont Leaning Complex.  Interest in completing the school has increased due to several factors. The district, through Supt. Romer, has stated that if environmental mitigation can occur, a cost study should be completed to determine financial feasibility.  Second, Governor Davis signed AB 1301 (Goldberg), which would require an environmental study be completed and submitted to the Department of Toxic Studies Control (DTSC).   Proposed uses for the property vary from completing the school to converting the property to a commercial campus.  Another proposal calls for completion of the school while adding community services such as day care, medical and recreational uses.   Real estate and engineering experts will spend the next several weeks reviewing the proposals and will report back to the district with a recommendation by early December. 

BUSINESS TAX ADVISORY COMMITTEE  (BTAC)
The City Council passed an ordinance that will grant a tax exemption to new businesses for two years, to take effect January 1, 2002.  Specifically, the ordinance will extend the current business tax exemption from one tax period to two tax years, and will provide additional business tax relief for start-up businesses with gross receipts of less than $500,000.  The second year exemption will expire on December 31, 2007.    To cover this cost, the City will utilize $4 million of the unallocated balance of the Tax Reform Fund to reimburse the General Fund for revenue loss resulting from the extension of the start-up Business Tax exemption.

LIVING WAGE ACTION
CCA recently testified before the City Council on behalf of Kenny Yee and the Wing Hing Noodle Company.  Wing Hing, located in Jan Perry's Council District, was the recipient of Industrial Development Bonds for improvements to its facility and to purchase new equipment.  These bonds would allow Wing Hing to hire up to 140 new employees, which is a substantial benefit to the community.  Although the City Attorney opined that Industrial Development Bonds are not subject to the Living Wage provisions, the City Council's Community and Economic Development Committee ignored the opinion and arbitrarily chose to attach living wage provisions to the development bonds.  The full Council then approved the bond issue. At that time, Wing Hing had no choice but to comply with the Council action. 

Unfortunately, the bank that issued the letter of credit to Wing Hing determined that living wage requirements would jeopardize the company's overall cash flow capacity, making Wing Hing unable to adequately service its bond debt.   Thus, the City Council's actions threatened the overall survival of the company. 

At Council Member Perry's request, CCA successfully testified in favor of her motion to eliminate living wage requirements from Wing Hing's bond provisions.  Council Member Perry and CCA argued that the living wage provisions were never part of the original bond negotiation and should be removed.  CCA congratulates Council Member Perry for recognizing the significance of the City doing what it can to be truly "business friendly".

TRANSPORTATION

CALTRANS BUILDING
The construction of a new Caltrans District 7 headquarters is rapidly progressing with a slew of activity occurring in the coming months.  A panel of judges, representing both the public and private sectors, deliberated the merits of three different technical submissions for construction.  Interviews of the three project contenders took place on November 6th and 7th.  Thom Mayne of Morphosis, a cutting-edge firm in Santa Monica, was selected to design the new headquarters.   Other examples of Mayne's work are Diamond Ranch High School in Pomona and the soon-to-be-constructed Federal Courthouse in San Francisco.  Mayne's designs incorporate a futuristic look while allowing the facility to be very functional and efficient.

On other fronts, the Environmental Impact Report (EIR) is on schedule with completion and certification by November 9th.  Following certification of the EIR, there is a 30-day public comment period.  Once the EIR passes muster, a contract can be awarded for the project.  Though State budget cuts persist, many involved with the project feel confident that the new facility will be completed for the estimated $170 million. 

On the local front, the City of Los Angeles has entered into negotiations with the property owners of the six parcels located on 1st, Main and Los Angeles Streets.  These six parcels are crucial to the land swap between the City of Los Angeles and the State.  Designs for the new Caltrans facility incorporate 1st street frontage.  If a deal is not struck between the City and property owners, the City may begin condemnation proceedings.  Again, those involved with the negotiations feel confident that a deal can be struck and that the project will remain on schedule.  A meeting with the various property owners, City and Caltrans will be held on December 11.  CCA will notify the members of time and location. 

CCA passed a resolution in support of the new Caltrans facility and continues to support the project.  In addition to a resolution in support, CCA is proud to have members Chris Martin of AC Martin Partners as master architect of the new facility, and Ira Yellin and Dan Rosenfeld of Urban Partners who are contributing their expertise as contractors on the project.   We will keep the membership posted of any new developments. 

WAYFINDING
The City Council Public Works Committee approved a plan to assist Angelinos, tourists and residents in finding their way Downtown.  Wayfinding is a system of coordinated signage to identify different districts in the Downtown area.  This program has been very successful in many revitalized cities across the country.  The Confederation of Downtown Associations of Los Angeles is working with the Department of Transportation to design and site these signs.  The next phase of analysis will entail a street speed study.   This study will be used to determine the size of a sign and its type font, depending on the average speed of each particular street.   The study will be the final phase of the plan before the signs are manufactured.  

LIGHT RAIL UPDATE

Expo Line
In June, the MTA Board voted to accept the draft EIS/EIR of the Mid-City Transit Corridor that would allow for a light rail to run from Downtown Los Angeles along Exposition Boulevard to West Los Angeles.  CCA testified on behalf of Figueroa Corridor Committee Chair A. Bingham Cherrie and the University of Southern California for a below-grade/tunnel option for the Exposition Line.  The MTA Board agreed to further study this option in its approval of the EIS/EIR.  In January, the MTA will conduct community outreach meetings to discuss station locations.  By March, MTA expects to hire a design engineer for the many technical tasks involved with tunneling.

Blue Line (Long Beach)
Due to an increase in ridership, the MTA is completing a platform-lengthening project at all stations north of 7th and Flower Street.  This project will allow three-car trains that accommodate more passengers to be used on the line.  Blue Line ridership has jumped to 64,000 passengers per day.

Blue Line (Pasadena)
The Pasadena-Los Angeles Blue Line Construction Authority has made great progress in completing this very important link in the light rail system.  Construction remains on schedule for completion by June of 2003.  In recent weeks, anti-train-at-grade supporters were able to convince the California Public Utilities Commission (PUC) to review all street/rail intersections along the route for safety concerns.  Several resident groups in Pasadena, Highland Park and South Pasadena imply that these intersections are unsafe and should be constructed below or above grade.  Construction authority officials contend that all safety measures were taken into consideration and that this last-minute effort could jeopardize the entire project.  Additional design or construction would simply bankrupt the Authority. 

In early November, an administrative law judge ruled in favor of the construction authority, which may continue construction while the PUC considers the project.  A ruling is expected in March of 2002.

Red Line (North Hollywood)
This light rail route has proven to be extremely successful with 164,000 riders per day making the journey from North Hollywood to Downtown.   Enhancements include additional parking at the North Hollywood terminus and a mixed-use project in the NoHo District adjacent to the station.

Red Line (East Los Angeles)
Final design and engineering specifications are being completed.  The project will depart Union Station through Boyle Heights to terminate at Atlantic and Beverly in East LA with completion expected in 2008.

2001 STATE LEGISLATION RESULTS
October 15th marked the last day for Governor Davis to sign or veto bills before the winter recess.  Here is the status of several bills that were pending on the Governor's desk.

AB 63 (Cedillo) Franchise Tax Board Information Sharing
In a big win for CCA, the Governor signed AB 63 (Cedillo), which will assist a jurisdiction in ensuring proper payment of taxes.  In many cases, a business may be registered with the state but not with the city.  AB 63 would allow cities to use information generated from the Franchise Tax Board to inquire or send a notice to businesses for non-payment of city taxes.   CCA thanks Mayor Hahn, the Valley Industry and Commerce Association (VICA) and the Chamber who jointed CCA in lobbying the Governor extensively on this bill.      

SB 975 (Alarcon) Prevailing Wage
The Governor also signed SB 975, which would require any public works financed through the use of industrial development bonds under the California Industrial Development Financing Act to comply with laws relating to payment of prevailing wages. Existing law generally defines "public works" to include construction, alteration, demolition, or repair work done under contract and paid for in whole or in part out of public funds.   This bill redefines "public works" as "paid for in whole or in part with public funds" meaning certain payments, transfers, credits, reductions, waivers, and performances of work. CCA opposed SB 975 because we are concerned about potential increased costs to public works projects financed with public funds as defined by this bill.   

SB 211 (Torlakson) Redevelopment
Also signed by Governor Davis, this bill prohibits the adoption of a local ordinance declaring that there is no further need for a Redevelopment Agency if the agency has excess surplus funds or has not completed certain obligations.  It authorizes a redevelopment agency that adopted a redevelopment plan on or before December 31, 1993, to amend that plan to extend its effectiveness to pay indebtedness and receive tax increment revenues for not more than 10 years.  Supporters argued that the uniform statewide deadlines set by the Legislature in 1993 do not fit downtown districts, low-income neighborhoods, and industrial areas that have persistent and pervasive physical and economic blight.  This bill gives redevelopment officials the time and money they need to finish the job.

AB 545  (Steinberg) State Office Siting
Governor Davis vetoed AB 545, a bill that would have required the State, in selecting locations to lease, construct, or purchase buildings for the conduct of state business, to give priority to sites within mixed-use or commercial districts.   Supporters argued that siting state facilities in central business districts would provide a tremendous boost for California's downtowns.  While Governor Davis agreed with the bill's objectives, he vetoed the legislation because "some of the specified characteristics may be inconsistent with one another and may result in frivolous litigation..." Fortunately, the Governor signed an executive order that requires the State to give priority to central cities when building, purchasing, or leasing property. 

STATE LEGISLATIVE SUMMARY CHART

For October/December (as of November 10TH, 2001)

October 15th marked the last day for Governor Davis to sign or veto bills before the winter recess.  Here is the status of several bills that were pending on the Governor's desk.

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