LA WATCHDOG - In February, the Herb Wesson led City Council approved a $1 a year lease with the Korean American Museum for a 24,540 square foot parking lot located at the southwest corner of Vermont Avenue and Sixth Street, just north of the Metro station at the intersection of Wilshire and Vermont in Wesson’s Council District 10.
Under the terms of this 50 year lease, the Korean American Museum will finance and construct a three story, 45,000 square foot facility that is designed to “interpret and preserve the Korean American’s community’s history, culture, and achievements; to examine and discuss issues currently facing the community; and to explore new and innovative ways to communicate the Korean American experience to other American communities.”
However, this undeveloped property, located in the heart of the largest Korean American community in the United States, is an exceptionally valuable piece of property, located a block north of JH Snyder’s new $200 million, LEED certified, twin tower development that has 464 apartments and 40,000 square feet of retail space.
In August 2008, an independent appraisal firm hired by the City pegged the value at $8.7 million. The City’s General Services Department concurred with this appraisal.
However, the Community Redevelopment Agency of Los Angeles (the “CRA”), the prospective purchaser of this “surplus” property, apparently disagreed with this valuation and in May of 2009, retained its owned appraisal firm that determined that the value was in the range of $3 million. This value was confirmed in June 2010 by a third outfit.
Apparently there were some environmental issues involving varying levels of perchloroethylene (PCE) in the soil vapor and high levels of methane. Yet, according to estimates by City staff, methane remediation, which would also provide a barrier against low levels of PCE entering the structure, would cost only $90,000.
Today, according to some knowledgeable members of the real estate community, this strategically located property is worth at least $5 million and may be able to fetch as much as $10 million from an aggressive developer.
Wesson’s original plan that was cooked up in 2007 was for the City to sell this “surplus” property in a private, below the radar screen sale to the CRA and deposit the proceeds in the Special Parking Revenue Fund. These funds would eventually make their way to a Council District 10 slush fund.
This carefully orchestrated scam blew up when Governor Brown dissolved the CRA in 2012. As a result, then Mayor Villaraigosa and the Herb Wesson led City Council determined not to sell the property. Rather, the City Council passed a motion that authorized a long term, $1 a year lease with the Korean American Museum. The construction of this 45,000 square foot facility would create jobs while its subsequent operation would result in additional sales and utility tax revenues. However, there is no mention of any property tax revenue since the Museum is a tax exempt institution.
One of the major benefits to City Council President Herb Wesson is that the appreciative Korean business and real estate community will be more “willing” contributors to his campaign war chest, his political pals, and his pet projects.
Furthermore, this incredibly generous gift by our cash strapped City will help the 62 year old Wesson overcome some of the bitterness associated with the recent redistricting where many in the Korean community felt they were screwed by the Wesson led gang on the City Council. Of course, we will find out more as a result of the ongoing redistricting litigation.
Unfortunately, this dollar a year lease is only one of many shady real estate deals involving the Herb Wesson led City Council.
How many other dollar a year leases has the City and its propriety departments entered into with politically connected cronies and their organizations?
How many tax waivers have been granted to large scale developers such as the $64 billion Westfield Group and AEG/Farmers Field?
And how many zoning variances have been approved that result in huge windfalls, such as the $300 million in goodies for the Millennium Hollywood real estate development that will turn Hollywood and Vine into Gridlock City.
No wonder the citizens and voters of Los Angeles have no trust and confidence in the Herb We$$on led City Council.
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, the Ratepayer Advocate for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate. Humphreville is the publisher of the Recycler Classifieds -- www.recycler.com. He can be reached at: [email protected]. Hear Jack every Tuesday morning at 6:20 on McIntyre in the Morning, KABC Radio 790.)
-cw
CityWatch
Vol 11 Issue 62
Pub: Aug 2, 2013
