CommentsLA WATCHDOG--“The power to rezone is the power to create great wealth and using that power wrongfully is just as bad as stealing public money.”
This comment by Superior Court Judge Pearce Young in the 1969 sentencing of Los Angeles City Councilman Thomas Shepard on his conviction for bribery in connection with rezoning of land in the San Fernando Valley still appears to be the operative as members of the City Council have no problem granting special favors in return for campaign contributions and other monetary favors.
Earlier this year, Mayor Eric Garcetti, the Planning and Land Use Management Committee led by Jose Huizar and Mitch Englander, and the Herb Wesson led City Council approved a 27 story luxury high rise in Koreatown. This political action overturned the unanimous decision of the City Planning Commission to reject this oversized development because it was not compatible with this low rise, densely populated, lower income neighborhood that just happened to be located in Herb Wesson’s Council District.
This zoning change will provide the Beverly Hills developer, Michael Hakim, with a windfall profit estimated to be in the range of $15 to $20 million. In return, Hakim will “contribute” $1,000,000 to the City’s Affordable Housing Trust Fund and $250,000 to a Community Benefits Trust Fund, both of which are controlled by Council President Herb Wesson.
In February of 2013, Wesson orchestrated a $1 a year lease with the Korean American Museum for a 24,540 square foot parking lot on the southwest corner of Vermont and 6th Street. This property had been appraised for more than $8 million. This coincided with several generous contributions to Wesson’s “Yes on Proposition A” slush fund that promoted the permanent half cent increase in our sales tax. This measure was rejected by 55% of the voters in March of 2013.
In June of 2015, Wesson introduced a motion that would authorize the Korean American Museum to expand its development from a three story, 45,000 square foot museum to a seven story, 85,000 square foot building consisting of a two story, 28,375 square foot museum and five stories consisting of over 100 market rate apartments.
While Wesson hailed this as a “creative partnership,” there is an unpleasant aroma surrounding this deal involving a bargain basement long term lease for a very valuable City property to a nonprofit museum that is engaging in a for profit residential development.
In 2011, just down the street at Vermont and Wilshire, Wesson arranged for $17.5 million in loans from the City and the Community Redevelopment Agency to J.H. Snyder Company, a well-heeled, successful developer, to help finance its $200 million apartment and retail complex. In less than three years from the date of the loans, Snyder flipped the two towers, pocketing a profit in the range of $75 to $100 million. This raises the question as to whether these loans were necessary, other to augment Snyder’s return on its equity investment that is estimated to be in excess of 100%.
Snyder’s strong relationship with Wesson and his reputation as a successful developer allowed him to take over the failed development of the CRA controlled property at 1601 North Vine, strategically located between Sunset and Hollywood Boulevards. This deal allows Snyder to buy this 18,208 square foot lot that is permitted for an eight story, 124,000 square foot office building for the bargain basement price of $825,000. This is considerably less than the City’s cost of $6.5 million.
Of course, it does not hurt Snyder was a generous contributor to the Wesson’s “Yes on Proposition A” slush fund as well as many other local campaigns.
The power to rezone properties on a spot basis is poor public policy because residents and their neighborhoods are subject to the whims of the City Council who, despite their protests that they are representing our best interests, are heavily influenced by real estate developers, their lawyers and lobbyists, and their wads of cash. All we need to do is look at the overdevelopment in Hollywood, DTLA, the Westside, and the Valley that is clogging our streets and making our lives miserable.
The lack of trust in the Herb Wesson led City Council will result in voters approving “The Neighborhood Integrity Initiative,” a proposed ballot measure that will limit the powers of the City Council to spot zone for the benefit of the campaign funding real estate developers.
More later on this long overdue ballot measure!
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and a member of the Greater Wilshire Neighborhood Council. Humphreville is the publisher of the Recycler Classifieds -- www.recycler.com. He can be reached at: [email protected])
-cw
CityWatch
Vol 13 Issue 93
Pub: Nov 17, 2015
It Pays to be a Friend of Herb
