Council approves Hollywood/Highland financing package after extended debate
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Summary
The council approved a financing package for the Hollywood/Highland redevelopment project in a special meeting, authorizing city participation of roughly $98.5 million toward an approximately $400 million project; votes were passed after debate over guarantees, parking revenue use and relocation costs.
The Los Angeles City Council approved a financing package for the Hollywood/Highland redevelopment project in a special meeting after an extended debate over the size of the city’s subsidy, guarantees from the developer and how parking revenues would be used.
Molly Campbell of the City Administrative Officer’s office told the council the package represented the previously discussed financial plan: “The total cost of the project is approximately $400,000,000 with the city contributing 98,500,000.0 of that amount,” with approximately $68,500,000 earmarked for the parking facility and about $32,000,000 for the theater. She said both the city-owned theater and parking facility would be funded through a combination of parking revenue bonds and MICLA-backed theater financing, with certain developer guarantees on the theater bonds.
Opponents focused on fiscal risk and the scale of the city’s exposure. Councilmember Wax warned the chamber: “We don't have 90,000,000, so we have to finance it,” noting the city’s share had grown from earlier estimates and calling the deal a risky subsidy to a large developer. Councilmember Walters and others objected that insufficient developer risk remained on the table and that, if revenues fell short, city parking funds across districts could be tapped.
Supporters and CAO staff pointed to built-in reserves and contingencies. Councilmember Goldberg detailed amendments (mislabeled in some committee materials as 1a/1b) that added debt-service reserve funds and other safeguards; she also noted a corporate guarantee on the theater bonds. CAO/agency staff acknowledged relocation costs had been underestimated earlier and that bonding and interest assumptions changed because of a faster drawdown; staff said relocation claims added about $2,200,000 to the previously estimated figure and that projected interest rates on bonds were lower than earlier estimates (theater financing estimated nearer 6.5%, parking nearer 5.1% in the package discussion).
Council voted to adopt motions amending the CAO recommendations and then approved the package. The recorded tallies in the chamber were: motion 1a approved 10 ayes, 1 no; item 1b as amended approved 9 ayes, 2 noes; the overall item 1 as amended approved 9 ayes, 2 noes. The ordinance was held over for one week and scheduled to return on April 6 for follow-up action.
Next steps: the council will return to the ordinance on the stated date with finalized legal language and any technical revisions recommended by the city attorney’s office; the project’s financing structure will move forward only to the extent the documents reflect the council direction and the developer commitments recorded in the amended package.
