Late last week, the Supreme Court unanimously ruled that a decades-old Minnesota property tax law was unlawful when it allowed the government to seize wealth from an elderly Black homeowner. The decision in Tyler vs. Hennepin County serves as a warning about legal defects in other property tax laws that unfairly harm communities of color, including California’s own Proposition 13.
The Minnesota case began when Geraldine Tyler failed to pay the taxes on her longtime Minneapolis home. Over several years, the tax debt accumulated to $2,300, exploding to $15,000 when penalties and fines were added. The county seized her condominium and sold it, keeping the entire proceeds — $40,000 — not just the $15,000 she owed.
The Supreme Court proclaimed that this money grab was unjust and unconstitutional under the 5th Amendment’s takings clause. It rejected Hennepin County’s legal reliance on the 13th century Statute of Gloucester, a law that Justice Neil M. Gorsuch characterized during oral arguments as being “about lands owned by the feudal lord and what happens when a vassal fails to provide enough wheat to his lord.”
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The court’s determination that what happened to Tyler didn’t meet constitutional standards echoes and revives a concern raised in the 1990s about Proposition 13.
California’s tax-assessment limits demand radically different property taxes from owners of similar properties, based only on their time of purchase. Thirty years ago, Stephanie Nordlinger balked at paying nearly five times in property taxes for her Los Angeles home as longer-settled neighbors. An unmoved Supreme Court majority held that the differential treatment had a rational basis, but Justice John Paul Stevens disagreed.
In his dissent, Stevens concluded that Proposition 13 created “a privilege of a medieval character: Two families with equal needs and equal resources are treated differently solely because of their different heritage.”
The Supreme Court’s blessing in Nordlinger vs. Hahn upheld Proposition 13’s legality and established its feudal — and unfair — nature.
Proposition 13 raises race discrimination concerns. Assessment caps benefit long-standing homeowners — who are often white — at the expense of their more diverse neighbors who arrive later. The effects of such property taxes on homeownership’s demography suggest violations of the 1968 federal Fair Housing Act. Recent estimates show that Proposition 13 gives the average homeowner in a white neighborhood of Oakland, for example, a tax break of nearly $10,000 each year — more than triple the break provided to average homeowners in Latino neighborhoods, and about double those in Black and Asian neighborhoods in Oakland.
Ironically, people just like Tyler were the original faces of the battle to enact Proposition 13 in California and similar measures around the country. Activists in the 1970s and 1980s invoked stories of elderly widows losing their homes to convince voters that property taxes should be based on a home’s purchase price and allowed to rise just 2% a year from there, regardless of market value.
But such assessment limits have not lived up to their promise to protect homeowners. Michigan also limits the amount that an owner’s assessment can rise. Yet as real estate values declined in Detroit, those limits did not ensure that assessments fell to match, leaving low-income Black homeowners with inflated, unaffordable taxes. Like Tyler in Minnesota, many residents were forced out of their homes through tax foreclosures.
In California, Proposition 13’s overbroad system protects the propertied at a high cost to more diverse, first-time buyers. People may stay put to hold on to a tax advantage, limiting inventory and driving up home costs. Parents can also pass low tax assessments on to their children, exacerbating the problem.
The California Housing Finance Agency notes that “for the entire 2010s, California’s Black homeownership rate has been lower than it was in the 1960s, when it was completely legal to discriminate against Black homebuyers.”
While Proposition 13’s precise inequitable effects are complicated, more inclusive and less legally tenuous alternatives exist.
There are other tax reforms that could protect low-income and elderly homeowners without hamstringing cities’ tax bases and enriching wealthy owners.
Philadelphia allows low-income senior citizens to freeze their property taxes, and low-income families to spread rapid assessment increases over several years. In Massachusetts and some Connecticut towns, low-income homeowners can defer part of their property tax bill, which is paid off upon the home’s sale. California has its own property tax postponement program, which it should expand, instead of relying on Proposition 13.
The Supreme Court’s rejection of Minnesota’s greediness reminds us that the courts are watching as states tighten the vise of property tax systems on the poor and racially diverse. To be sure, Proposition 13 does not result in unconstitutional “takings.” But the concerns that motivated the court in Tyler vs. Hennepin County also apply here. And given the court’s willingness to reverse long-held constitutional precedent, perhaps the Nordlinger decision itself will be due for reconsideration.
California’s admirable protection of struggling, older homeowners can occur through less discriminatory and irrational means. Tax injustice shows up not only in the foreclosure of an elderly Black woman’s $40,000 Midwest condominium but also in the inability of diverse, immigrant families to purchase a $400,000 condominium in Mid-City.
Shayak Sarkar is a professor of law and an economist at UC Davis. Josh Rosenthal is legal director of the Public Rights Project, a civil rights and economic rights nonprofit.
The Los Angeles City Council approved two major zoning plans for downtown and Hollywood on Wednesday that, if successful, would bring as many as 135,000 new homes to those areas over the next 20 years.
The council, on a 13 to 0 vote, approved the DTLA 2040 plan, which seeks to attract 100,000 new housing units to an area stretching from the Convention Center east to the Arts District and north to Chinatown — more than a fifth of the estimated need citywide. In a second 13 to 0 vote, the council adopted the long-delayed update to the Hollywood Community Plan, which is supposed to create the capacity for 35,000 new units.
The city is required to regularly update each of its city’s 34 community plans, which map out where and how new apartments, office towers and other projects can be built. The council last updated its Hollywood plan roughly a decade ago, only to see that document struck down by a judge.
Council President Paul Krekorian said the downtown and Hollywood plans have been “undoubtedly the two most difficult” in the city.
“This is going to be incredibly important to the city’s economic development, its future and our housing — addressing our housing needs,” he said.
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Both planning documents, shaped in the wake of the COVID-19 pandemic, will offer new safeguards for staving off displacement, city officials said. Both feature new strategies for spurring the construction of affordable housing — apartment buildings where at least a portion of the units have rents below market rate. Those units would need to remain affordable for 99 years.
In Hollywood, developers of properties on some of the city’s busiest boulevards — such as Hollywood, Sunset and Cahuenga — will receive permission to build much larger buildings than otherwise allowed if they include a percentage of affordable units in their projects.
In downtown, the council approved an “inclusionary” housing system, requiring that newly constructed residential projects include at least a percentage of affordable units. In many instances, developers would be allowed to make their projects larger as long as they incorporate a greater number of affordable units, planning officials said.
The inclusionary requirements would not apply in cases where office buildings or manufacturing space are converted into housing.
The council also opened the door to residential development in a portion of skid row bounded by 5th Street on the north, 7th Street on the south, San Pedro Street on the west and Central Avenue on the east. However, in that area, developers would still need to construct projects that are at least 80% affordable — a threshold that’s much higher than in other parts of downtown.
Wednesday’s vote delivered a major victory to the Garment Worker Center, which had been fighting for new regulations to ensure sewing factories and other apparel-related businesses are not pushed out by new development. That group, which belonged to a coalition that included Unite Here Local 11, the politically powerful hotel workers’ union, won new restrictions on residential development and new hotels in parts of the Fashion District.
Business groups warned that those changes would render up to 12,000 residential units in the DTLA 2040 plan economically unfeasible, at least for the foreseeable future. That, in turn, will make it more difficult for downtown to reach its target of 100,000 new units, said Anthony Rodriguez, executive director of the Fashion District Business Improvement District.
“I’m just not sure how they’re going to go about finding developers that are interested in building new housing” in much of the Fashion District, he said.
The Garment Worker Center celebrated the council’s vote, calling DTLA 2040 a “reasonable compromise” that does not prioritize jobs over housing. “We clearly need both,” said Marissa Nuncio, the group’s director.
The council voted unanimously to study the plan’s impact on housing production in the Fashion District in the coming weeks. Councilmember Kevin de León hailed the new measures to protect manufacturing jobs, saying garment workers and hotel employees have been “holding on by a shoestring, not knowing if they’re going to be evicted from their homes.”
De León said downtown is doing more to address the housing crisis than any other part of the city, in part by establishing an inclusionary zoning system.
“We’re not just talking the talk about building inclusive communities, we’re actually walking the walk,” he said. “Because if we truly want to be a progressive city, we can’t just theorize or tweet about it. We actually have to do something about it that’s real and tangible.”
Councilmember Marqueece Harris-Dawson, who heads the council’s planning committee, also praised the plan’s focus on developing new apartments with restricted rent.
“Somebody somewhere down the line is going to move into an affordable unit downtown that would not have appeared if we had not done this work,” he said. “The market would not have produced that.”
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Two of the council’s newest members — Eunisses Hernandez and Hugo Soto-Martinez — also put their stamp on the community plans. Hernandez reversed an effort by her predecessor, Councilmember Gil Cedillo, to get rid of height limits in a section of Chinatown. The council approved her request to retain a five-story height limit on stretches of Hill Street, Broadway and other nearby corridors.
Soto-Martinez, for his part, increased the affordable housing requirements included in a new incentive program targeting some of Hollywood’s busiest commercial districts.
Under the plan, housing developers in those areas would have the right to build 30,000 square feet of building for every 10,000 square feet of lot. If they meet the city’s new affordable housing requirements, they would receive permission to build 67,500 square feet of building for every 10,000 square feet of lot.
Those developers would need to set aside between 11% and 25% of their apartments for lower income households, depending on the affordability levels they select.
“This is just the beginning,” Soto-Martinez said. “There’s going to be so much work that’s going to happen in the coming years to make this city equitable, just and good for working people.”
On Google Earth it looks like a stunning opportunity: six acres of vacant land surrounded by single-family homes in a West Valley neighborhood.
After being abandoned to shoulder-high weeds for nearly a decade, the former elementary school site in Woodland Hills is now a target for development.
But it’s not being scoped out for million-dollar homes like those around it. Instead, a group of prominent civic leaders has identified the parcel as a prime location for shelter or housing for homeless people.
It’s on a list commissioned by the Committee for Greater L.A. to prod City Hall to use surplus government land for homeless housing.
“If you talked to people in the city … they will argue that it is a myth, that all the land that is available is really not appropriate for this use,” said Miguel Santana, chairman of the committee, which is made up of leaders in philanthropy, business and government.
In releasing a database of 126 proposed sites online, the committee sought to keep up pressure on Mayor Karen Bass to follow through on her campaign pledge to build 1,000 beds on public land in her first year in office.
The study‘s authors said they identified more than enough usable parcels to support 1,000 beds of shelter and permanent housing, and proposed a timeline to produce the housing within six months.
Bass has acknowledged the committee’s work but said she has her own list of properties and her own timeline. And the timeline is longer.
In an open letter, Bass, whose third executive order required the city administrative officer to compile an inventory of city-owned land suitable for housing, said her staff is poring over a list of more than 3,300 parcels and has had preliminary discussions with City Council members to gauge their reaction to specific sites.
She said they have identified sites to accommodate 500 interim housing beds and have submitted them to the state to be part of Gov. Gavin Newsom’s emergency small-homes program. If approved, she said, they could be built by July 2024.
But Bass said she wants to rethink the city’s approach to permanent housing on its lands to develop a “bigger and bolder” program. She set a goal of January 2025 to come up with standards for identifying suitable land, community engagement strategies, provisions for infrastructure investments, new financing methods and innovative approaches to construction.
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“My focus over the remainder of my first term in office will be to make the disposition and development of City owned land faster, cheaper, and more streamlined, and to innovate in the financing and delivery of affordable housing without reliance on traditional subsidy methods,” Bass wrote.
While working primarily from the city’s own list, Bass said, she will use the committee’s study to advance her goal of incorporating surplus land owned by regional and state agencies.
The study, conducted by the nonprofit Center for Pacific Urbanism, analyzed variables including slope, zoning and proximity to utilities to winnow down 65,000 parcels owned by city, county, state, federal and other agencies such as Metro and the Los Angeles Unified School District.
Dario Rodman-Alvarez, an architect whose firm Pacific Urbanism founded the nonprofit, said he and his staff then reviewed each of the nearly 2,900 survivors to verify that it would be suitable for a model development consisting of 36 units interspersed with community gardens.
From those, they hand-picked 121 to give officials “enough options to make decisions but not be overwhelmed by the sheer number of options.”
A Times spot check of sites on that list, however, showed how frequently political impediments can confound even the best analysis.
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The former Oso Elementary property in the West Valley, for example, has long been a point of community contention. Residents of the area, called Carlton Terrace, said that they want something done with the eyesore — most suggested a park — but that homeless housing would be unacceptable.
“It’s never going to happen,” said Darryl Lutz, a 20-year resident across from one corner of the vacant land. “The homeowners here are heavily involved in local government.”
Joyce Norman, an emergency room physician, said she would not oppose a shelter except that she doubted it would come with adequate services, especially transportation. The nearest shopping is downhill a half-mile away.
“If I were a homeless person, I would want to live near a street with stores,” she said.
Not to mention, the Los Angeles Unified School District may have its own plans for the property. It was included in a 2020 proposal to evaluate 10 properties for development as housing for district employees.
A district spokesperson would not give an update on that proposal, instead providing a statement that the district “is currently evaluating our underutilized properties to help develop a plan that most effectively addresses the needs of our district and the communities that we serve.”
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To sidestep possible roadblocks caused by differing governmental agendas, the committee study identified 46 sites, all owned by the city, as highest priority.
But those were not free of roadblocks either.
One — 2.1 acres of vacant land in Sylmar surrounded by a neighborhood of single-family homes, condos and apartments — is already slated for affordable housing, but the first developer chosen by the city backed out, and the Los Angeles Housing Department is again preparing a request for proposals.
“We have been working urgently to ensure this property is used for housing and are exploring options for the best site use with the least amount of downtime possible,” Councilwoman Monica Rodriguez said.
That’s the bureaucratic maze that Bass must cut through.
Her program will not only identify sites but also hand them to developers ready to go, said Jenna Hornstock, Bass’ housing deputy.
“So rather than put out these sites and say, ‘Now go out and entitle them and compete for money,’ it’s, ‘Here’s the site. We either have entitlement or a path to entitlement and here is a financing plan that we will commit to,’ ” Hornstock said.
The idea of using surplus government land to speed up and lower the cost of homeless housing goes back to 2016 when committee Chairman Santana, who was then the city administrative officer, included it in an ambitious plan to address homelessness.
Santana’s office examined more than 500 city-owned properties that found 129 sites potentially large enough and in suitable zones for homeless housing. All but 10 were city-owned parking lots.
Few of them worked out.
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When then-City Controller Ron Galperin reviewed the topic in a 2022 report critical of the city’s “fragmented” management of surplus land, he found that 11 of the city’s bridge home shelters and 16 projects in development under the city’s $1.2-billion HHH housing bond were on city-owned land.
Bass, in her letter, said 14 more are in design or negotiation, but concurred that it was not enough.
Galperin highlighted 26 city-owned properties that he considered suitable for shelter projects, either bridge housing, safe parking, safe sleeping villages or tiny home villages. But like the earlier study, it was heavily weighted with parking lots.
Public parking lots, which also make up slightly more than half of the committee’s priority list, are often problematic because they serve local businesses and generate revenue for the city.
One parking lot on the list is in the business core of Leimert Park. Converting it to housing would only exacerbate a lack of adequate parking in the “Mecca of Black culture in Los Angeles,” a spokesman for Councilwoman Heather Hutt said in an email reply to The Times.
“Councilwoman Hutt cannot support homeless housing on these parking lots because the community will never support it,” the statement said. “The residents have demonstrated a strong commitment to preserving the authenticity and character of Leimert Park, and the parking lots serve that authenticity and character.”
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At the other extreme, a city parking lot on 87th Street a block east of Broadway has no current value to the depressed business district where several vacant lots and abandoned buildings are owned by an investor who has held them since the 1990s and rebuffed all suitors.
Councilmember Marqueece Harris-Dawson, who said he rejected all the other sites the mayor suggested, would like to put housing on that lot, and another one west of Broadway, but only if the city would seize the adjacent privately owned properties to provide space for more units.
After years of unsuccessful overtures to the property owners, Harris-Dawson said he is ready to reconsider the city’s long-standing reluctance to use eminent domain.
“You could make a village there,” he said.
With a district dotted with privately owned vacant lots, Harris-Dawson said he thinks there are far more appropriate options than the few government parcels.
The Pacific Urbanism study acknowledged the potential of privately held land and included five examples, including the parking lot at Hebrew Union College and the expanse of parking around Dodger Stadium.
Some organizations, such as churches, may be open to using their land for purposes that align with their mission, it said, but made no mention of eminent domain.
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“For every public lot that’s vacant, I can take you to two privately held lots that are as good or better for housing,” Harris-Dawson said. “We literally have people living in the streets. Maybe after 35 years we intervene and help you find a different investment to make.”
By publishing its study, the Committee for Greater L.A. intends to force public officials to be more transparent, said committee member Sarah Dusseault, a former commissioner of the Los Angeles Homeless Services Authority.
“If you want to keep this surface parking lot as a surface parking lot because it earns $20,000 a year, God bless,” Dusseault said.
“But you should be transparent about that as a policy choice instead of the policy choices being in the dark.”
The pandemic-driven shift to remote and hybrid work has decreased demand for office space and will steadily lower its value. That has huge implications not just for building owners but also for cities that rely on property tax revenue and the economic vibrancy that office workers generate.
A recent Boston Consulting Group survey found that many office buildings are at risk of becoming “zombies,” with low usage, high vacancy and quickly diminishing financial viability. The problem is particularly acute in Los Angeles and San Francisco, where weekday office building use has fallen to around 40%. As a result, in both cities, public transit revenue has plummeted by 80% or more, and office property values and tax revenues may drop by as much as half, according to our analysis of public data.
Rising interest rates are compounding the financial pressure for building owners, whose rental income stands to drop 35% to 45% as corporate leases expire in both San Francisco and Los Angeles. Higher borrowing costs coupled with lower valuations could leave some owners owing more than their buildings are worth, leading in turn to a wave of defaults that suddenly make lenders the owners and managers of these buildings. In February, a fund managed by Brookfield Properties defaulted on $784 million in loans on two well-known office skyscrapers in downtown L.A., which was seen by some as a turning point for the U.S. office market.
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We define zombie buildings as those that are at least half-empty. Many buildings are already at that mark, and 60% of office leases nationwide are set to expire over the next three years.
A vicious circle is emerging: Lower office building use leads to less spending at surrounding businesses and, as leases turn over, less rent revenue. This leaves less money available for building improvements, which further decreases property values and resources for maintenance and upgrades. As vacancies persist, businesses that cater to office workers close or relocate, creating more vacancies and often causing public-safety problems that cities struggle to address with diminished tax revenues.
Dealing with these new workplace and financial realities will require property owners, city leaders and lenders to take action to break the cycle and reimagine downtowns.
Cities need to take several steps over the next few years to revitalize downtown areas and reinvent or enhance them as destinations for living, working and playing:
Establish a baseline: Cities should assess office buildings for their likelihood of low occupancy and default and estimate the resulting budget shortfalls from lower tax revenue.
Encourage use: Cities should evaluate land-use rules to ensure that they don’t impede downtown revitalization; invest in public spaces and keep them safe, with a special focus on transit; and encourage government workers to return to office buildings to boost the vitality of downtown corridors.
Support new uses: Zoning and development regulations should be revised to allow for more downtown housing, hotels and retail and office space. Incentives such as tax breaks and subsidies can boost conversions to residential use, affordable housing and energy-efficient retrofits.
Replace lost revenue: City leaders can delay property reappraisals; make better use of public spaces for art, music and theater programming to draw people downtown to spend time and money; and find new sources of revenue such as tourism and arts and culture districts.
Property owners, for their part, need to evaluate their commercial real estate portfolios and decide how to revive or relinquish zombie buildings based on their characteristics, neighborhoods, markets, finances, and city taxes and incentives. Commercial office properties will fall into one of five categories: continued high occupancy and profitability; viable as office space with a moderate decline in income; appropriate for conversion to housing, hotel or other uses; suitable for redevelopment with public support; or unsuitable for reuse or subsidized redevelopment and therefore subject to default.
Making these decisions will be difficult but necessary. The pandemic created a permanent change in workplace behavior, so even a national economic rebound or a pause in interest rate hikes will not solve the problem for many buildings. Our analysis suggests that a third or more of current U.S. office space won’t be needed.
Lenders, meanwhile, should work closely with property owners and city governments to try to prevent a wave of building defaults that could force them to become the owners and managers of zombie buildings, setting off a spiral of declining property values. They will need to manage risk, restructure loans near or in default and develop markets where they can sell those loans. At the same time, they’ll have to evaluate and finance reuse and redevelopment projects as downtown districts take on new functions.
The U.S. office market faces dramatic upheaval over the next three years, forcing the nation to deal with moribund office buildings in very stressed urban neighborhoods. Given the stakes, cities, owners and lenders must begin to rethink how we use commercial buildings after the pandemic and what we want downtown.
Santiago Ferrer is Boston Consulting Group’s North America lead for cities, real estate and infrastructure development.
The recent merger of the PGA Tour and Saudi-backed LIV Golf ended a long battle between the two, typically framed as a struggle between pure, upright American values and brute economic, political and even murderous force. Many associated LIV backers with 9/11 and the killing of journalist Jamal Khashoggi.
The overwhelming financial might of the billionaires backing LIV ultimately resulted in an offer the PGA Tour leadership apparently couldn’t refuse. But while many are sickened by the effort to “sportswash” Saudi bank accounts, this foreign incursion is hardly the beginning of the sport’s outrages.
For the record:
6:56 p.m. June 13, 2023An earlier headline incorrectly identified the organization merging with LIV. It is the PGA Tour, not the PGA.
Golf courses have historically been places of exclusion. Segregated golf courses flourished in the South through the 1950s, and some private clubs continued to exclude women, people of color and religious minorities until much more recently.
Golf courses are also an environmental blight across the country. They treat their grounds with tons of harmful pesticides and fertilizers to maintain lawns manicured by massive, pollution-spewing mowers. Vast quantities of water help carry the chemicals into aquifers and wetlands.
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Communities starved for green space and affordable housing look on as these carefully tended acres are sequestered for use only by those who can afford it. Both public and private golf courses impose significant costs on the places where they operate, costs that are almost never absorbed entirely by the players.
Golf courses rarely pay their fair share in taxes either. Many enjoy special tax exemptions that allow them to pay a small fraction of the proportionate burden borne by neighboring properties, particularly in California.
The Los Angeles Country Club, which will host the U.S. Open starting Thursday, is an egregious example. It is a beneficiary of state constitutional provisions that limit golf course property taxes on top of the breaks conferred by California’s notorious Proposition 13. Its roughly 300 acres in the midst of some of the area’s most expensive real estate is assessed for tax purposes at around $18 million. That’s the case even though the area’s median home price is $2 million.
If the club were instead occupied by hundreds of homes, they would easily be worth 30 times the assessed value. Even if they never set foot on the course, Southern California residents are effectively underwriting its continued operations.
That’s only the beginning of the disproportionate public investment in the sport. Los Angeles County operates no fewer than 20 public golf courses, the nation’s largest such system. California’s public golf courses occupy enough land to build 375,000 homes at moderate density, according to the Legislative Analyst’s Office. In 2022, an Assembly committee killed a bill that would have made it slightly easier to develop housing on some of that vast acreage.
Millions of Americans who enjoy watching and playing the sport have the right to do so. But the truth is that all Americans are paying the price for the continued operation of golf courses across the country. Many of them probably would not freely choose to underwrite the degradation of the environment, dedicate millions of acres of valuable land to a very narrow and exclusive use, or subsidize that use with huge tax breaks. Do those Americans get a choice?
The LIV-PGA Tour merger suggests golf is big business. So why are we subsidizing it? Let golf courses absorb the true costs they impose on communities. If municipalities want to continue to make public courses available at an affordable price to people of lower incomes, they should at least tax the private courses at equitable rates to help make that possible.
Communities generally do not subsidize polo, for example, which might explain its near extinction in the United States. Perhaps golf has more widespread support, interest and staying power than polo. The LIV-PGA Tour mega-merger suggests that, at least for the time being, it does — and that there’s still big money in Big Golf. If that’s the case, it’s high time American taxpayers stop subsidizing it.
Ray Brescia is a professor of law at Albany Law School. This is adapted from an article in the Ohio State Law Journal, “Course Correction: Abolition, Grand Strategy, and the Case Against Golf.”
In a city whose name is shorthand for exclusivity and wealth, the future of a planned ultra-opulent hotel will soon be decided by the most democratic of means: an election.
Beverly Hills voters will decide Tuesday whether to rescind the City Council’s approval of a hotel project helmed by French multibillionaire Bernard Arnault and LVMH Moet Hennessy Louis Vuitton, his luxury conglomerate.
To some, the battle over the Beverly Hills Cheval Blanc hotel is a David and Goliath story, pitting a small group of residents concerned about overdevelopment and a union advocating for affordable housing against the world’s richest person.
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Others see it as a tale of an outside group — in this case Unite Here Local 11 — mucking around in the city’s business and potentially depriving Beverly Hills of hundreds of millions of dollars in tax revenue over the next three decades. The politically powerful union, which represents hospitality workers across the region, collected the local signatures necessary to force the issue to a vote.
Regardless, all parties seem to agree that the result will have lasting implications for a 5.7-square-mile city where roughly 31,000 residents bed down at night and many more people staff homes, offices, stores, restaurants and hotels during the day.
Beverly Hills already has 16 hotels, seven of which are considered luxury, according to the city. But the Cheval Blanc would aim to be the brightest star in a galaxy of sparkle, promising an exceptionally high-end experience for its wealthy clientele.
It would be the first North American property for LVMH’s relatively new chain, which currently has five hotels, including a ski-in and ski-out chalet in the French Alps and a St. Barts hotel where the entire property is lightly scented with a custom Guerlain fragrance.
“I think it’s fair to say that this is the only city in the world that could have made this deal,” Henry Finkelstein, the outside lawyer who represented Beverly Hills in the development negotiations, said during a November City Council meeting. “If you look at virtually any other place, including in the metro Los Angeles area in particular, they would be paying subsidies. And here we are exacting premiums.”
The Beverly Hills Cheval Blanc, which was approved by the City Council and the City Planning Commission last year after a lengthy public process, would also reshape the edge of one of the most famous retail strips in the world.
When most people think of Rodeo Drive, they tend to focus on a specific portion of the roughly two-mile street: a three-block business district that doubles as an international symbol of luxury retail, where the streets are lined with palm trees and vast sums of capital.
The hotel — replete with a members-only club, restaurants, retail and a spa — would rise at the northernmost of those three blocks, abutting Little Santa Monica Boulevard.
After raising numerous objections during the planning process, Unite Here Local 11 began gathering signatures to challenge the project shortly after the development agreement and zoning amendment were approved in November.
Triggering a referendum election in Beverly Hills requires the signatures of 10% of registered voters, meaning that just 2,193 signatures were necessary at the time.
Representatives of the union argue that cities like Beverly Hills often change development rules to make it easier to build commercial luxury projects, but don’t always do this for housing. They also vociferously object to the fact that the development agreement does not specifically earmark any money for affordable housing.
Unite Here Local 11 carries tremendous political heft nine miles east, at Los Angeles City Hall, where it has pushed legislation and where one of its own, former organizer Hugo Soto-Martínez, now sits on the City Council. The union local also has been instrumental in recent policies in West Hollywood, but its influence is relatively nascent at Beverly Hills City Hall.
The city’s development agreement with LVMH dictates that the company contribute $26 million to the city’s general fund, in addition to $2 million for art and cultural programs. The city would also receive an additional 5% surcharge over its regular 14% transient occupancy tax.
The proposed hotel complex, designed by star architect Peter Marino, would replace a number of buildings, including the Richard Meier-designed site formerly occupied by the Paley Center for Media on North Beverly Drive around the corner from Rodeo. The hotel would vary from four stories to a partial ninth-story penthouse, taller than current zoning rules allow, according to the final environmental impact report.
According to the city’s analysis, the hotel is expected to funnel about $725 million into city coffers over the next 30 years, with the bulk of that coming from the combined 19% bed tax.
It’s money that Councilmember Lili Bosse, who served as mayor when the project came before the council last year, and other proponents see as key to securing the long-term future of Beverly Hills as a place synonymous with the good life.
“I think what people need to understand is the quality of life of Beverly Hills, in terms of our three-minute response time of our Police Department … the best public schools, the best quality of life, being a safe city, a beautiful city — that revenue mostly comes from the business community,” Bosse said.
But Councilmember John Mirisch, an iconoclastic former film executive and fourth-generation Beverly Hills resident who cast the lone “no” vote against the project, hardly sees the Cheval Blanc as a good deal for the city.
“We’re effectively doubling the value of their land,” Mirisch said, referring to the zoning amendment approved by the council, which will allow the developer to more than double the square footage that it would otherwise be able to build on the site. “And the city negotiated, from my perspective, a measly $28 million.”
Mirisch said he voted against the project because of his critiques of the deal, along with concerns that the hotel was too large for the area.
Since then, Mirisch said, he has been appalled by the amount of money LVMH has spent on the special election campaign.
The LVMH-funded pro-hotel campaign had spent nearly $2.8 million by early May, according to campaign statements filed with the city clerk.
Among the opponents, Local 11’s political action committee spent nearly $86,000 during the same period, and Residents Against Overdevelopment — a grassroots group led by former City Council candidate Darian Bojeaux — spent a little more than $16,000.
LVMH will reimburse Beverly Hills for the cost of the special election, estimated to be about $870,000, according to the city.
Boosters see the relationship between Cheval Blanc and the street that will house it as symbiotic, with hotel guests drawn by the location doubling as an ideal client base for the neighboring luxury stores. Money will beget money, with a small fraction of every transaction going directly into city coffers.
Proponents also say that the sumptuous spectacle of Cheval Blanc would anchor the northern end of the retail corridor, guarding against the tired fate that’s befallen several other once-hot shopping districts. (LVMH’s investments on Rodeo go far beyond just the Cheval Blanc site: The conglomerate has 15 stores on the street or broader Business Triangle and owns several of those properties, according to a spokesperson.)
But Bojeaux, a semiretired attorney, said she fears that the size of the hotel could dramatically change her “village” for the worse.
Still, the 36-year Beverly Hills resident said she had all but given up on organizing against the Cheval Blanc when Unite Here began collecting signatures for the referendum, saying, “We probably wouldn’t have been able to do it on our own.”
“Whatever their interests were, it was really wonderful for a lot of us, because they organized the referendum petition,” Bojeaux said, characterizing the referendum election as “like something out of my dreams.”
Housing — particularly the ability to find affordable housing near workplaces — is the No. 1 issue for the union and its members, said Unite Here Local 11 Co-President Kurt Petersen.
“Beverly Hills is like the worst of the worst because there’s no affordable housing nearby,” Petersen said, adding that Local 11 has more than a thousand members who work in Beverly Hills, but very few are able to live in the city.
There are 157 deed-restricted affordable units in the city, but all but seven of those units are part of a dedicated senior housing facility, according to Deputy City Manager Keith Sterling, who said an additional 50 units are in the pipeline.
Beverly Hills voters will be asked two ballot questions: whether they approve of the zoning amendment that would allow the hotel to be constructed, and whether they approve of the development agreement.
Should either measure fail to pass, the project would be unable to move forward.
Anish Melwani, chairman and chief executive of LVMH’s North American subsidiary, said that if the voters reverse the project’s approvals, the company has no plans to bring it back before the council after already going through a rigorous, years-long process.
“We have no interest in building a hotel in a community that doesn’t want us to be there. Vox populi, vox dei, right?” Melwani said, invoking a Latin phrase that means the voice of the people is the voice of God, and saying the company would revert the properties to retail.
It’s almost time for Dodger baseball. You’re rolling west along Sunset Boulevard, visions of Mookie Betts and Clayton Kershaw and Julio Urías happily dancing through your mind.
You’re one block from turning onto Vin Scully Avenue and into Dodger Stadium when you notice a black billboard, looming ominously above an auto repair shop called Fernando’s Tires. The billboard features this name, in bright white letters: Frank McCourt.
That guy?
Yes, that guy, the one who traded two Boston parking lots and what one of his attorneys said was “not a penny” of his own cash for ownership of the Dodgers. Yes, the one who dragged the storied team into bankruptcy amid Major League Baseball allegations he had “looted” $189 million from team revenues for personal use. And, yes, the one who laughed all the way to the bank, selling the Dodgers for a billion-dollar profit in 2012.
He did not, however, sell the parking lots that surround the stadium. In 2018, he pitched a gondola that would transport fans from Union Station to Dodger Stadium.
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Five years later, the proposal is still alive, now shepherded by an environmental organization delighted at the prospect of the gondola taking cars off the streets and keeping pollutants out of the air. That Sunset Boulevard billboard and others like it are brought to you by opponents of the gondola, taking aim at the project in part by relentlessly associating it with McCourt.
The Dodgers are guaranteed to play 81 games at Dodger Stadium every year, with playoff games traditionally added in October and concert dates sprinkled throughout the year. That leaves skeptics within the community to wonder why McCourt would promote a gondola ride to a stadium parking lot that would be empty three out of every four days during the year.
Unless, of course, the lot would not be empty.
McCourt’s company, now known as McCourt Global, highlights this slogan: “Building for tomorrow.” McCourt did not sell the Dodger Stadium parking lots because he anticipated building something there, some day.
What might that be? And is the gondola intended to carry us to that day?
The pursuit of those answers took me to Dodger Stadium, to City Hall and to a meeting of MLB owners. First, however, I stopped at a weathered red brick building in the Arts District, an old furniture and fabric warehouse reimagined as a laboratory for energy innovation.
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Three colorful banners greeted visitors, one with the hue of a bright blue sky. “Welcome,” that banner read, “to the Cleantech Future of Power and Water.”
The interior comes alive with vibrancy and urgency, and with work on dozens of concepts. Any one of them, building managers say, could emerge as “the next big idea to fight climate change.”
The Dodger Stadium gondola represents such an idea, according to its proponents. Climate Resolve, a nonprofit based in that building, agreed to take the reins from McCourt in leading the project.
“From my perspective,” said Climate Resolve founder and executive director Jonathan Parfrey, “to have a gondola transporting people from Union Station to Dodger Stadium, and to have that exciting, beautiful conveyance identified as a climate action?
“It changes the way people approach public transit. So it was very attractive to us.”
With baseball’s new hurry-up rules, you could miss half the game if you get stuck in Dodger Stadium’s oft-snarled traffic and get to your seat an hour after the first pitch.
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The gondola alternative: get to Union Station, hop aboard a spacious cabin that could arrive every 23 seconds, soar high above the city, and arrive at Dodger Stadium in seven minutes.
The climate benefit is easy to envision: fewer fans in cars powered by gasoline; more fans in gondolas powered by electricity.
A promotional video for the proposed Dodger Stadium gondola project released by Los Angeles Aerial Rapid Transit.
The climate downside is easy to envision too: massive development at Dodger Stadium, with neighborhood disruption for years of construction, and with cars converging upon the stadium every day, not just on game days.
“I’m involved in this project,” Parfrey said, “and I brought my organization into this project, predicated on there not being development on that land.”
Not now, or not ever?
“Not for the foreseeable future,” he said.
Parfrey said he had been given “assurances” that the gondola was not a first step toward Dodger Stadium development. I asked who had given him those assurances, or who I could ask to get those same assurances.
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“Ask Frank,” he said.
Near Lot G at Dodger Stadium, along the long slog from the outer reaches of the parking lots to a stadium entrance behind left field, a colorful model of a gondola cabin awaits you. You can step inside the 24-seat cabin, then imagine a ride that would allow you to skip traffic to the ballpark and instead, as the signage reads: “GET THERE BY AIR.”
You can even find a helpful decal, showing you where to stand to take a picture with the gondola cabin in the foreground and the stadium in the background.
The display of a model cabin takes a page from the playbook for pitching a new stadium or arena. Models and renderings can excite fans, but they also can obscure a critical question about any big project: Looks cool, but who is going to pay for this?
The cost of building the gondola was estimated at $300 million in 2020 and is expected to rise by the time a financing plan is finalized, said David Grannis of Point C Partners, a transportation and land use consultancy working with Climate Resolve.
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The McCourt entity that originated the gondola concept, LA Aerial Rapid Transit, has agreed to fund the approval process, including environmental studies and permit applications, project spokesman Nathan Click said. It is up to Climate Resolve to figure out how to pay for construction, as well as for annual operating costs Grannis estimated at between $5 million and $10 million.
The gondola won’t make money, at least not under the current plan of free rides for fans with a Dodgers ticket and neighborhood residents with a Metro pass.
Parfrey said taxpayers would not be asked to subsidize the gondola.
The hundreds of millions would come from private financing, Grannis said, and largely from sponsorships and the purchase of naming rights.
In 2012, the airline Emirates agreed to pay about $60 million for a 10-year sponsorship of a London gondola — then called the Emirates Air Line — that carried riders above the River Thames and cost $96 million. The current one-way adult fare on the London gondola is $7.50.
“In this case,” Grannis said, “you have a venue that happens to be the best attended in Major League Baseball, and therefore the iconic nature of this cabin flying to Dodger Stadium and taking you there is going to attract a lot of sponsors, a lot of people who want naming rights or sponsorship.
“That’s the big revenue.”
Jeff Marks, the founder and chief executive of Innovative Partnerships Group, brokers naming rights and sponsorship deals between companies and teams, leagues and venues. He said it “could be doable” to cover the cost of building and operating the gondola through corporate sponsorships, but he said even the most generous sponsor might not be willing to strike a nine-figure deal without exposure beyond simply slapping the company’s name on the side of the gondola.
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Marks, speaking generally because he is not involved in the project, said a title sponsor might also want a benefit such as the company name on the field. A hypothetical example: Verizon Field at Dodger Stadium. The Dodgers have hired firms to solicit corporate offers for naming rights to the field and patches on the team jerseys.
Or, Marks said, a primary sponsor might prefer naming rights to whatever development might rise atop the parking lots: Take the Verizon Gondola to the Verizon Village at Dodger Stadium!
Rick Caruso, the developer behind the Grove and Americana shopping and entertainment centers, pursued the Dodgers when McCourt put them up for sale. Caruso commissioned studies on how to improve the notorious congestion for cars getting into and out of the Dodger Stadium parking lots.
Without control of the lots, however, Caruso believed he might not have been able to implement any changes. McCourt insisted he would not sell the lots, and Caruso withdrew from the bidding.
Guggenheim Baseball Management, the winning bidder, took a different approach. Guggenheim, led by Mark Walter and Stan Kasten, bought the Dodgers and their stadium from McCourt. In a separate transaction, a Guggenheim entity formed a joint venture with a McCourt entity to control the parking lots.
In land use documents filed by the joint venture in 2012 and intended to “facilitate the orderly development” of the Dodger Stadium parking lots, the potential property uses cited include homes, offices, restaurants, shops, entertainment venues, medical and academic buildings, a separate sports facility and a hotel and exhibit hall.
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“It is an ill-conceived concept that the highest and best use of Chavez Ravine is 260 acres for parking,” an attorney for McCourt, Tony Natsis, said at the time. “I consider that to be an ill-conceived notion for the owner of the parking lots and the owner of the stadium.”
Walter, the Dodgers’ chairman and controlling owner, said McCourt cannot develop anything on the property without Guggenheim’s consent. What might Walter be thinking in terms of development now?
“I haven’t been thinking about it at all,” Walter said.
Kasten, the Dodgers’ president and chief executive, said the Dodgers support the gondola project but are “really not involved” in it. Walter had a simple explanation for why the Dodgers would back a project that would chew up a chunk of the parking lots in the stadium.
“Hopefully, it will make it easier for people to get there,” he said.
Of the 18,889 parking spaces at the stadium, the gondola station at Dodger Stadium would result in the loss of 194 spaces, according to the environmental impact report for the project.
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To the Dodgers, that would not be a big deal. But this might be: The report projects 10,000 people would ride the gondola to each game by 2042, which could translate to a loss of about 20% of parking revenue.
Kasten called those figures “hypotheticals that I don’t have an answer for,” and project opponents dismissed the ridership projections as unrealistically high, citing a UCLA study.
But a person familiar with the Dodgers’ business model, speaking on condition of anonymity so as not to jeopardize his professional relationships, said the team likely would not agree to give up millions in annual parking fees without some way to recoup that money.
“It does not make sense for the Dodgers to do it if they’re going to lose parking revenue,” the person said. “It does make sense if the gondola is serving a larger development.”
The California Endowment, a nonprofit with offices that would sit beneath the shadow of a 195-foot gondola tower, is leading and largely funding a coalition opposing the project. In court papers, the Endowment cited the Dodger Stadium development proposal McCourt unveiled when he owned the team and alleged the gondola would be “a loss leader for the future development of parking lots at Dodger Stadium.”
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What would Kasten say to Angelenos who would like to know whether the gondola comes first and development comes next?
“That’s a question you’ll have to address to someone else,” Kasten said.
To the people proposing the gondola?
“Yes,” Kasten said. “That’s where I would direct my questions.”
I had. And what had I been told? Ask Frank.
On April 9, 2021, for the first time in 32 years, the Dodgers raised a World Series championship banner. The Dodgers bestowed the honor of hoisting the treasured flag upon five people, including three of their own: Dodgers co-owners Magic Johnson and Billie Jean King, each decorated champions in their own right, and Hall of Fame broadcaster Jaime Jarrín.
The other two: Eric Garcetti, then the mayor of Los Angeles, and Gil Cedillo, then the city councilman representing the district that includes Dodger Stadium.
The Dodgers forged a strong working relationship with Cedillo. The team and nine of its senior executives combined to make $13,800 in campaign contributions to him from 2013 to ‘22, according to city records.
Cedillo lost his bid for re-election last year, defeated by community activist Eunisses Hernandez. Kasten and Hernandez each expressed a desire to work together for the benefit of the fans and the community.
Garcetti, who has backed the gondola from the time McCourt first pitched it five years ago, said the Dodgers never have hinted to him that mass development would be in the works at Dodger Stadium.
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“I think there is a vision of trying to make it less of a once- or twice-a-year kind of a place for a family, when you go to a game,” Garcetti said before he left office last December, “and more of an asset: the best view in L.A., a place for more special events, a place where baseball history can be celebrated.
“I think their core business is baseball, and they want to protect that.”
The environmental impact report does not contemplate development at Dodger Stadium. The report states “no housing units are proposed” as part of the project and “additional approvals requiring further environmental review would be necessary” for any development at the stadium or elsewhere along the gondola route.
For Hernandez, that language is not enough. The councilwoman said she has “a lot of concerns” about the gondola.
“I am not convinced that this is an effective solution to reducing vehicle congestion,” she said, “and I share the neighborhood’s concerns about displacement and disruption.”
Hernandez said she is not necessarily opposed to development at Dodger Stadium, provided affordable housing is a priority. She is opposed to considering the gondola on its own, without any consideration of whether development might follow and what it might involve.
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“I don’t think it’s appropriate to undertake such large-scale projects without a full and clear understanding of long-term plans,” Hernandez said. “This shouldn’t be piecemealed out, and I want to see additional development plans made clear.
“That is the honest approach, and that’s what will allow the community, the city, and all involved entities to make a clear-eyed decision.”
Steve Soboroff, who was the mayoral point man on the construction of Staples Center and later president of the Playa Vista development near LAX, worked briefly with McCourt in the final year of his Dodgers ownership.
Soboroff is not involved in the gondola project. He said the most effective way to build community support for the project would be to offer transparency about the long-term plan, even if the gondola would come first and any development would come later.
“That would be the path that I would choose,” Soboroff said.
It was time for me to do what Parfrey had suggested: Ask Frank.
The Dodgers have prospered without McCourt, and McCourt has prospered without the Dodgers.
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He bought the storied French soccer club Olympique de Marseille. He donated $200 million to what is now called the McCourt School of Public Policy at Georgetown University. He launched Project Liberty, an initiative to reform the Internet in the interest of serving “people, not platforms.”
As McCourt told Leaders Magazine: “Our technology today is great if you want to support autocracy, but it is not so great if you want to support individual rights and the freedoms and liberties assorted with democracy.”
McCourt still owns the Los Angeles Marathon, which starts at Dodger Stadium. During the past two months, as Urbanize LA reported, McCourt entities revealed plans to construct 502 apartments in three buildings on two sites along Stadium Way and another one block south, overlooking the 110 Freeway. The apartment buildings are planned regardless of whether the gondola is approved, said Brin Frazier, a spokeswoman for McCourt.
The applicant for the apartment projects is listed in city records as Jordan Lang, president of two McCourt entities: McCourt Partners Real Estate and Aerial Rapid Transit Technologies.
Lang’s company biography makes no mention of any experience in other transportation projects but touts his leadership in completing “millions of square feet of office, hotel, residential and mixed-use projects.”
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The prospect of developing such a large site on the outskirts of downtown is so rare that the city’s movers and shakers have floated concepts for decades. Caruso and I talked about some of them 18 years ago, long before McCourt put the team up for sale or Caruso ran unsuccessfully for mayor.
Peter O’Malley, the revered former Dodgers owner, proposed building an NFL stadium in the Dodger Stadium parking lot in 1995. McCourt revived the idea in 2005.
The other four MLB teams in California all have pursued mixed-use developments surrounding their ballparks. The Angels’ most recent proposal — since killed by the city of Anaheim amid a corruption scandal — would have included more than 5,000 homes on a site roughly half the size of the Dodger Stadium property.
“We need more housing,” Garcetti said. “We need it to be centrally located. We need it to be affordable. I think, if you meet those criteria, you can start a conversation with the city.”
Or, perhaps, development at Dodger Stadium could mean a selection of food halls, restaurants and bars, enticing enough to lure fans to arrive long before the game and stick around after it ends. That in itself could ease the neighborhood traffic bottlenecks on game days, gondola or no gondola.
Parfrey, who said his nonprofit agreed to take the lead on the gondola project based on what he said was a promise of no development on the land, said his organization would not support a ballpark neighborhood arising on the property but would support a plan to put a restaurant here and there within the parking lot.
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“We would go early and go to the restaurants,” Parfrey said.
Parfrey, remember, was the guy who told me to “ask Frank” about the “assurances” that the arrival of the gondola would not trigger development. I mentioned that to Frazier, McCourt’s spokeswoman, and asked if I could speak to him about that.
“Frank,” she said, “is not available.”
Watch L.A. Times Today at 7 p.m. on Spectrum News 1 on Channel 1 or live stream on the Spectrum News App. Palos Verdes Peninsula and Orange County viewers can watch on Cox Systems on channel 99.
Facing a persistent housing crisis, Los Angeles is doubling down on converting unused commercial buildings into residential properties. Last month, as part of the DTLA 2040 Community Plan, the City Council approved a long-awaited update to the Downtown Adaptive Reuse Ordinance adopted in 1999, which enabled the production of more than 12,000 units of new housing. The update would make more commercial buildings eligible for incentives such as streamlined permits and flexible regulations.
This might seem like the perfect time for office-to-apartment conversions: The persistence of remote work has led to record office vacancy rates in L.A. But the dramatic increase in interest rates over the last year made refinancing loans for office buildings very difficult, prompting defaults and distressed sales. “Maturity defaults” — loans that have come due and cannot be refinanced — have surged. Nearly 90% of office loans maturing this year are likely to face difficulty in refinancing.
In downtown L.A., skyscrapers are selling for half of what they did a decade ago. Given that high commercial real estate prices have typically hurt the financial feasibility of adaptive reuse projects, a steep decline in office building prices could be helpful in theory. But high interest rates also make conversions more costly to finance. Measure ULA — the so-called “mansion tax” that took effect this April — is another disincentive for both selling and converting office properties, applying a 4%-5.5% tax to transactions for commercial properties and multifamily housing properties as well.
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From a local government perspective, there is significant risk in leaving the fate of these properties to chance. Steep declines in sale prices mean steep declines in local tax revenue. To mitigate this risk, L.A. should consider fiscal policy to tip the scale more convincingly toward adaptive reuse. One approach worth entertaining is a temporary property tax abatement program for office-to-residential conversions.
A multiyear tax abatement for eligible projects would decrease the initial costs of adaptive reuse projects. A simple example of a 10-year abatement program might reduce an eligible property’s tax bill by 100% for the first year after approval, then by 90% in the second year, 80% in the third year and so on until the property returns to the full taxable value of the converted housing development. In addition to encouraging new purchases, an effective abatement program could also spur current owners to convert their buildings and avoid the financial disincentive of Measure ULA on property transfers.
In New York City, a tax abatement program helped produce nearly 13,000 housing units in Lower Manhattan between 1990 and 2020, representing more than 40% of the total housing growth in the area over this period. A similar program may be scaled up in Washington, D.C.
Tax abatements to encourage housing production have been decried by opponents as unnecessary giveaways to developers. But these criticisms do not account for the cost of doing nothing.
Consider an unconverted office building that had a current tax valuation of $50 million but would become a distressed sale at half that value in 2024. Suppose that sale results in a 50% decline in property tax revenue over the next 10 years. Now suppose that, instead, the building is converted into 200 units of housing while benefiting from a tax abatement program that means forgoing 50% of tax revenue over the same 10 years. This conversion to housing could be expected, conservatively, to preserve the full 2023 valuation of the property. After a decade, the forgone tax amount is equal to the decline in tax revenue under a distressed sale — but Los Angeles ends up with 200 more units of housing instead of an underutilized office building.
Beyond helping to meet Los Angeles’ ambitious housing production goals, adaptive reuse conversions can provide a more stable source of property tax revenue because the housing sector is much more insulated from factors such as remote work and other economic shocks affecting the office sector. And they can also help to maintain office prices through a reduction in supply. Both of these forces could place city and county finances at less future risk.
In Greater Los Angeles, 20% of office building loans are coming due by 2025 and will need to be refinanced. Creating a tax abatement program or comparable incentive in time to avoid huge declines in property tax revenue would be a big lift for policymakers to pull off. But other massive fiscal programs such as California’s Project Homekey — which provided $600 million in the first year of the COVID pandemic to convert housing for individuals experiencing homelessness — have been quickly formulated and expanded in times of crisis.
The clock is ticking to address L.A.’s potential “doom loop” for office real estate. Decisive action could increase housing production and lead to robust property tax revenue that could benefit Angelenos for decades to come.
Jason Ward is an economist, associate director of the Rand Center on Housing and Homelessness in Los Angeles and a professor at the Pardee Rand Graduate School.
The Los Feliz home Walt Disney dreamed up for his wife and two daughters can be yours to rent — for $40,000 a month, that is.
The 6,388-square-foot home, which was built in 1932, has nods to some of the castles featured in a few of Disney’s fairy tales. During the period Disney lived in the home, Walt Disney Studios released some of his most popular films, including “Pinocchio,” “Fantasia,” “Dumbo,” “Bambi” and “Snow White and the Seven Dwarfs,” according to the Walt Disney Family Museum.
The founding father of one of the world’s largest media companies would watch his own productions in the home theater, which is still intact.
“This property was chosen by Walt Disney as the place to raise his family and also coincided with a transition of Disney Studios from fledgling enterprise toward entertainment giant,” listing agent Chase Campen of Compass said in a news release. “It sits on an acre of land with incredible outdoor space and city views. Its historical pedigree only adds to the magical mystique.”
Disney was born in 1901 in Chicago and moved to California in the 1920s. He set up Walt Disney Co. with his brother, Roy, in the back of a small office at Holly-Vermont Realty in Los Angeles. Disney lived in the Los Feliz house in the later part of his life, until 1950. Disney died in 1966 of lung cancer.
The home, which features French Provincial, French Country Tudor and Neo-Gothic architectural styles, contains four bedrooms, three full bathrooms, two half-bathrooms, an in-ground swimming pool, a home theater and a gated driveway that can fit 10.
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Kazakhstan-born film director Timur Bekmambetov bought the property in 2011 and still owns it.
Brad Pitt’s legal team is claiming that his ex-wife Angelina Jolie “vindictively” sold her stake in their Chateau Miraval winery behind his back and says she “sought to inflict harm on Pitt” in new court documents that reveal more details about the unraveling of the former power couple’s relationship.
But Jolie’s camp insists that Pitt refused to complete a Miraval sale with Jolie “unless she agreed to being silenced about” his alleged abuse.
The latest development in their contentious civil lawsuit arrived in court Thursday when the “Babylon” actor accused Jolie and her company, Nouvel, of secretly selling her share of their south-of-France winery to “seize profits she had not earned and returns on an investment she did not make.” He claimed that his investment in the business “exceeded Jolie’s by nearly $50 million.”
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Pitt first sued Jolie in February 2022, alleging that she illegally sold her shares in the family-owned and -operated vineyard, which makes everything from rosé to vodka, to billionaire Yuri Shefler. The actor has claimed that Jolie used legal means to skirt an obligation to get Pitt’s approval of the deal, and last June, the Stoli vodka-related Shefler and Alexey Oliynik were added as defendants to the revised lawsuit. In October, Jolie filed a cross-complaint, which argued that the couple had no agreement whatsoever regarding both sides consenting to the sale of either party’s interest in the property and detailed the abuse allegations that prompted Jolie to file for divorce in 2016.
The exes, who met on the set of the 2005 movie “Mr. & Mrs. Smith,” acquired the Chateau Miraval estate in 2008 for $28.4 million and were married there in 2014. Though the two became legally unmarried in 2019, their contentious divorce proceedings are ongoing separate from the Miraval lawsuit.
In a second amended complaint and an accompanying document filed Thursday in Los Angeles Superior Court, representatives for Pitt and his company, Mondo Bongo, allege that Jolie in 2019 agreed to either jointly sell the home and vineyard, which they planned to pass on to their six children, or have Pitt buy out her stake in them.
Jolie, who Pitt claims had a nominal 50-50 interest in the venture, had allegedly promised Pitt that she would “leave with what I put in and nothing additional,” according to Pitt’s court documents obtained Friday by The Times. However, recognizing Pitt’s additional investments in the winery, Jolie agreed that “a 68-32 allocation of proceeds between Pitt and herself would be fair,” his team said.
But those agreements were upended in the summer of 2021 amid the heated custody dispute between the Oscar winners following their 2016 divorce, as well as revelations stemming from a family altercation on a 2016 flight back from France that resulted in an FBI investigation. Pitt claims that Jolie reneged on the exclusive buyout negotiations they had agreed on in early 2021 when she originally said she wanted out. (Jolie has alleged that she agreed to sell her entire interest in Chateau Miraval to Pitt for $54.5 million.)
“Jolie terminated those discussions and secretly purported to sell a 50 percent stake in the family home and family business to Tenute del Mondo,” the documents said. Tenute del Mondo is part of the Russia-affiliated spirits conglomerate Stoli Group, which Shefler owns.
Pitt and Mondo Bongo claim that they learned of Jolie’s putative sale to Stoli through a press release announcing that Stoli was “thrilled to have a position alongside Brad Pitt as curators” of Miraval rosé, the documents said, alleging that the move was made “by design” and that Jolie collaborated in secret with Shefler to carry out the purported sale.
The “Once Upon a Time … in Hollywood” star and Mondo Bongo accuse co-defendant Stoli of attempting a hostile takeover of the wine business and destabilizing Miraval’s operations. The plaintiffs claim Stoli did so by seeking access to Miraval’s confidential and proprietary information “for the benefit of Shefler’s competing enterprise, and trying to tear apart the winemaking partnership between the Pitt and Perrin families that is at the heart of Miraval and key to its success,” the second amended complaint said. Pitt also complained that he could no longer enjoy his private residence, as it was now co-owned by strangers.
Additionally, Pitt is claiming that Jolie made the putative sale “in the wake of the adverse custody ruling” in their protracted divorce proceedings that favorably and temporarily awarded joint custody of their children to Pitt.
In answer to Jolie’s cross-complaint, Pitt’s team and Mondo Bongo on Thursday denied every allegation the “Girl, Interrupted” Oscar winner made in her cross-complaint and further denied that Jolie “is entitled to any relief whatsoever.”
“Jolie’s actions were unlawful, severely and intentionally damaging Pitt and unjustly enriching herself,” his team alleges.
Pitt is asking that the sale be undone and that he be awarded punitive and compensatory damages to be determined at a jury trial, as well as the repayment of his legal fees. Efforts to settle the lawsuit have been unsuccessful, The Times has learned.
Jolie’s legal team has argued that Pitt has no basis to sue her because they never codified an agreement to only sell to one another. Additionally, in her cross-complaint, Jolie said that she was growing uncomfortable in participating in an alcohol-related business given Pitt’s “acknowledged problem of alcohol abuse.” She also said she had substantial assets tied up in Miraval that she wanted freed up following their split.
The “Maleficent” star alleged that she offered to sell her interest in Chateau Miraval to Pitt, but said in exchange for his purchase, the actor demanded she sign a nondisclosure agreement that would have contractually prohibited her from speaking outside of court about Pitt’s physical and emotional abuse of her and their children. (This after a sealed document filed in their custody case was presented as proof of his alleged domestic violence.)
“Jolie refused to agree to such a provision, and Pitt walked away from the deal,” the cross-complaint said, equating the “distressing and coercive to the point of being abusive” provision as an attempt to silence her in the wake of “these traumatic events” on the airplane.
“No matter how many times Mr. Pitt amends his complaint, he cannot escape from the fact that he verbally and physically assaulted Ms. Jolie and their children — even choking one of the children and striking another,” Jolie’s attorney Paul Murphy said Friday in a statement to The Times.
“Still today and in the seven years since that fateful plane ride, he personally has never publicly denied that it happened. The reality is that Pitt refused to complete the Miraval sale with Jolie unless she agreed to being silenced about the abuse,” Murphy added.
Jolie’s cross-complaint also reiterated essentially the same allegations of domestic abuse that were revealed in August 2022 after Jolie filed a Freedom of Information Act lawsuit against the FBI, which investigated the in-flight altercation. Her cross-complaint alleged that the FBI agent who conducted the investigation “concluded that the government had probable cause to charge Pitt with a federal crime for his conduct that day.”
Pitt was never charged in connection with the incident, either by the U.S. attorney’s office or the L.A. County Department of Children and Family Services, which investigated the incident — and its allegation of child abuse — before the FBI got involved. The FBI decided in November 2016 to close its probe without filing any charges against him.
Times staff writer Christie D’Zurilla contributed to this report.