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LA May Hand Out $185 Million to Fancy Frank Gehry Complex

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The long-gestating Grand Avenue Project may finally be completed, but only with a lot of taxpayer money

If there are any aspiring screenwriters in need of a setting for a TV drama, one that's chock full of twists and turns, hundreds of millions of dollars, and nefarious characters, the more than decade-long saga of the perennially stalled Grand Avenue Project in Downtown Los Angeles ought to fit the bill. That as-yet-unwritten TV series might even be several seasons in before the Grand Avenue Project actually comes to completion. The quest to transform Grand Avenue, anchored by Walt Disney Concert Hall, into a pedestrian-friendly corridor has been a long journey, and one that may finally culminate in some generous government handouts as the city council gets ready to hand over $185 million in tax revenue to the developers.

Here's a not-so-quick recap:

In 2004, Related Companies, a luxury development firm from New York, teamed up with the city to revitalize the area around Walt Disney Concert Hall. A few years later, they announced the Grand Avenue Project, a series of new public/private developments that would transform Grand Avenue—known for office buildings, Disney Hall, and MOCA, which all left it dead at night—into a walkable, livable neighborhood. Related planned on breaking ground as early as 2007 on three major projects in the area: Grand Park, The Emerson luxury apartments, and an enormous mixed-use complex designed by Frank Gehry. Then the recession came and sent the whole damn thing into a spiral. Funding became scarce, but Grand Park squeaked in, opening in 2012, and The Emerson followed in 2014. The Gehry project has been more troubled.

Related's plan was to build an ambitious hotel/residential/retail complex on Parcel Q, the land now occupied by a temporary garage (built in 1969) across Grand from the Walt Disney Concert Hall. How hard could it be to build a mixed-use complex on the site of a garage that was then entering its forth temporary decade of existence? Turns out, its been next to impossible.

All looked well back in early 2008. This now-quaint Curbed article was already signaling the demise of LA's erector set garage; Frank Gehry, LA's architectural golden boy, was on board; and hundreds of millions in funding was coming in from Dubai and Korea. Pretty soon after 2008, Downtown LA would be bustling with more than a million square feet of fresh new development. Yep, nothing short of an earth-shattering economic failure could derail this $2-billion proje... Uh oh.

Things got quiet on the development front shortly after the 2008 recession. Nearly five years later, Related announced they were going to scale back the project, lose the Gehry design, and try to build just one residential tower. To get city approval, they had some decidedly non-Gehry renderings drawn up just to get the damn thing up and running again, but the joint powers Grand Avenue Authority, which oversees the project, called those designs "uninspired," and it looked like they were going to finally give a thumbs down to the whole thing.

Luckily for Related, the developers got a stay of execution, and Gehry came back on board with designs for a $750-million mixed-use complex with a luxury hotel and condos filling two high-rise towers. Aside from some alleged cocaine drama from a major hotelier (no time to get into that now), the project seems to be back in the good graces of public officials.

Phew. Now that we're all caught up, what's up with that giant taxpayer handout? Not surprisingly, Related still lacks the money to complete the project, but, according to the LA Times, the city of LA is readying to step in with some major tax breaks to help out. Under a proposal from the City Council, Related would get to keep almost half of the $396.9 million in taxes it would generate for the city from the Grand Avenue Project. Over the 25 years of the deal, more than $185 million in tax revenue that would normally have gone into the city's general fund will now be used to close the developer's longstanding funding gap.

The cause of that funding gap? Pretty much the same decadence that torpedoed the project during the recession. It's the involvement of Frank Gehry, according to John Wickham, analyst for the city. Wickham tells the LA Times the "Gehry factor" has added significant cost to the project, although it's unclear where the current budget stands in contrast to the one for the original Gehry plan.

Councilmember Curren Price heads the committee that proposed the tax break—he wants development in Downtown LA to stay surging, and says that "subsidies do that." Councilmember Jose Huizar, who sits on the Grand Avenue Authority, is on board too. Sure, Huizar had to overcome some concerns about the hotel being run by Equinox, a "luxury fitness company" that's never actually run a hotel before, but he's in now.

The priority on helping to fund luxury housing and yet another hotel in Downtown may come off as a bit tone deaf, however, and not everyone in City Hall is enamored with the private/public partnership model for redeveloping Grand Avenue. County Supervisor Hilda Solis has expressed concern over the funding; she says in a statement that she hopes projects along Grand Avenue "remain accessible to all residents of Los Angeles County, regardless of their socio-economic level." Related itself says it plans on attracting a "diverse audience" and "approachable price points," but has been vague on details. (Studios at The Emerson started at $2,295 when the building opened in 2014.)

The City Council will vote on the tax breaks next week. Related has said it plans to begin construction next year, but they're still 750 million grains of salt short.