HOLLYWOOD-On Tuesday, October 8, at 10 AM, a hearing before a Zoning Administrator will be conducted in Room 1020 in Los Angeles City Hall regarding the February 21, 2012 razing of Hollywood’s Old Spaghetti Factory Building at Sunset Blvd. and Gordon Street.
This hearing is occurring due to an appeal of the illegal “midnight demolition” of this historic structure by the CIM Group. CIM is also the entity that recently demolished historic buildings on the former Pickford Studios lot in West Hollywood. We hope that you can attend the hearing and voice your objections to the demolition of historic Hollywood by CIM and others.
Despite being sued in court over its midnight demolition, CIM is proceeding with the Sunset/Gordon project, which has a lengthy history of City Hall ineptitude and corruption. In 2007, developer Gerding Edland entered into an agreement with the former CRA and then-Councilman Eric Garcetti to construct a 23-story skyscraper at the site of the Old Spaghetti Factory building.
The project sought extraordinary taxpayer subsidies, on the theory that government assistance was necessary to bridge the “funding gap” between the estimated cost of a redevelopment project and a “fair” developer profit. Based upon this principle, the CRA determined that Sunset/Gordon could only be built if the taxpayers of Los Angeles contributed $17.24 million in public funds, in order to assure that the developer would make his profit goal of $28.39 million.
As part of the project’s “public benefit,” the façade of the Old Spaghetti Factory building was required to be retained and restored to its original beautiful appearance as the former Peerless Auto Showroom building.
The Sunset/Gordon project subsequently received the most entitlements in the history of the City of Los Angeles. Hollywood/Highland had 4; Sunset/Gordon received 17, allowing a skyscraper with twice the allowed residential density with half the required parking, a 260-foot tall building where the zoning allowed only a height of 45 feet.
When community members sued the City over this project in 2008, the CRA and Councilman Garcetti voted to advance the developer $3.668 million in public funds to pay Gerding Edland’s litigation expenses, money that was supposed to pay for a public park. Gerding Edland subsequently defaulted on that advance and used the public’s money to buy property in Venice for another development.
Gerding Edland also defaulted on all of its other subsidized condo tower projects; Evo, Elleven, and Luma all went bankrupt. When the CRA’s finance officer was asked why the CRA wasn’t trying to recover these funds, the officer responded that “The Government is in the business of giving out money, not getting it back.”
When the CRA originally approved the Sunset/Gordon project in 2007, developer Gerding Edland stated that the office skyscraper would cost $200 million. CIM Group purchased the site in 2011, and now acknowledges that the cost of the project is $102 million, or a savings to CIM of $98 million. CIM has also increased its built-in profit margin for the project over what Gerding Edland was taking. Yet the CRA is still giving CIM $6 million in public funds to include 40,000 sq. ft. of office space in this development, at a time when a glut of such space is available.
Also, if CIM cannot rent out the space, they do not have to repay the $6 million taxpayer loan.
As for the former Old Spaghetti Factory building, after saving millions of dollars by not having to shore up the structure and dig around it during construction, CIM now says that it will “recreate” the building façade and incorporate it into the skyscraper. The City Planning Dept. is counting this “recreation” expense as CIM’s required “art” contribution to the people of Los Angeles, and is refunding CIM back its $628,000 required art fee.
All of this is, of course, in addition to the news that County Assessor John Noguez was allegedly bribed by the original developer in exchange for a reduction of the assessed value of the Sunset/Gordon property. As reported by the LA Times, Noguez reduced that assessment from $20 million to $7 million after receiving the developer’s campaign contributions. CIM Group purchased the site in 2011 for $21 million.
The people of LA have been ripped off enough on this massive waste of taxpayer funds, and you have a chance to speak out about it on October 8. Please attend.
(Ziggy Kruse is an activist and reporter for www.HNN-TV.com. She is also a former Board Member of the Hollywood Studio District Neighborhood Council. Ziggy can be reached at firstname.lastname@example.org. Ms. Kruse views are her own and do not reflect opinions of either the staff or management of CityWatch. This article was published first at HNN-TV.com).
Vol 11 Issue 80
Pub: Oct 4, 2013