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Business Fails to Outraise S Supporters

Opposition from an unusual alliance of business, labor, and nonprofit groups to the anti-development Measure S has failed to quash a fierce campaign by supporters, leaving the initiative’s fate too close to call days before the election.

Measure S proponents, a coalition of community activists and homeowner groups bankrolled by the AIDS Healthcare Foundation, have virtually matched the fundraising of the ballot initiative’s opponents, which include almost every major business organization and real estate industry trade group in town.

The campaigns have each raised more than $2 million in support since Jan. 1, pushing each side’s total fundraising close to $4 million – money the groups are pumping into voter outreach efforts.

“Often when a measure is opposed by almost the entire civic elite, as this one is, the proponents have a difficult time raising funds,” said Fernando Guerra, director of the Center for the Study of Los Angeles at Loyola Marymount University in Westchester. “But this time, Michael Weinstein and his AIDS Healthcare Foundation have matched the opponents just about dollar for dollar.”

Guerra said that makes the outcome more uncertain, especially in an election where turnout is expected to be at or lower than the 18 percent seen eight years ago, the last time an incumbent mayor was up for reelection against relatively unknown and underfunded opponents, as Eric Garcetti is this year.

The only public polling so far came last week, when Probolsky Research of Newport Beach released an independent poll taken in mid-February showing likely voters in the March 7 election rejecting Measure S by a 46 percent to 34 percent margin, with 20 percent undecided. But that poll had a relatively small sample size of 300 and a large margin of error of nearly 6 percentage points.

The voters’ decision will have far-reaching impact on the future of development and growth in Los Angeles.

Development battle

Measure S stemmed from a single development dispute.

The AIDS Healthcare Foundation had opposed the proposed Hollywood Palladium Project by L.A. developer Crescent Heights across from the foundation’s Hollywood headquarters. As the project moved forward, the foundation took legal action to stop it and crafted Measure S to limit not just that development but most major construction throughout the city.

Measure S would impose a two-year moratorium on all major commercial and multifamily residential projects that require a zone or height limit change or an amendment to the city’s general planning document. After that two-year period ends, the measure would limit the ability to change city zoning and planning rules for development projects. For example, new mixed-use or residential projects would not be permitted in industrial zones, such as downtown’s Toy District.

The measure also requires the city to more frequently update the 35 community plans that make up the general plan; the city has recently taken some steps in that direction.

Supporters said the measure would rein in what they see as a corrupt city planning system in which developers make campaign contributions and get City Council approval for their projects in return. They said this produces developments out-of-scale with neighborhoods and contributes to ever-worsening traffic.

“Our city leaders are avoiding cleaning up the backroom deals that lead to wildly inappropriate projects, widespread displacement of the working class and elderly, and skyrocketing rents,” campaign director Jill Stewart said in an email.

On the other side, Gary Toebben, chief executive of the Los Angeles Area Chamber of Commerce, said the measure’s two-year moratorium on many major projects would devastate the local economy.

“This ballot offers stark choices regarding the community we want to be in the future,” Toebben said in an email newsletter last week. “Halting nearly all construction for two years – and possibly more – would be hugely detrimental to our economy, housing affordability, homeless crisis, and quality of life.”

Developers and major business groups opposed to the measure raised $1.3 million through Feb. 17, with $400,000 of that coming from developer Crescent Heights, according to Ethics Commission filings. Their labor allies raised an additional $800,000 this year, bringing the total accrued by opponents in 2017 to just over $2.1 million.

In 2016, opponents raised $1.64 million, including $1 million from Crescent Heights and more than $100,000 from labor groups. They have been using the funds mostly to send mailers to voters.

On the other side, the AIDS Healthcare Foundation, which Weinstein leads as president, has put in nearly all of the $2 million-plus raised by Measure S supporters since the beginning of the year, according to Ethics Commission filings.

That comes on top of the $1.9 million the foundation raised last year, including monetary and nonmonetary contributions, bringing total pro-Measure S fundraising to $1.95 million last year.

That money has been spent on billboards around town and dozens of mailers to likely voters.

Divisive debate

Local businesses find themselves on both sides of issue.

One longtime Hollywood retail property owner who supports Measure S said it would slow the rapid change in Hollywood that he said threatens to turn the area into a mini-Manhattan.

“If the skyline with its views of the hills and the Hollywood sign completely disappears, that would not attract tourists,” said Aaron Epstein, owner of Artisan’s Patio, a collection of 15 small retail storefronts on Hollywood Boulevard near the Egyptian Theatre. Epstein, 86, said his father started the Pickwick Books store on Hollywood back in 1938.

Developers say that if Measure S passes, they might have to drop projects in Los Angeles and focus elsewhere.

“The capital will go to suburban communities where it’s easier to build, while folks like me who specialize in urban infill projects will have to go even farther afield, to places like Oakland,” Mott Smith, co-founder of L.A. boutique development firm Civic Enterprise, said last year.

Smith pointed to one recently completed project, the 17-unit Maltman Bungalows in Silver Lake, saying that if the initiative had been in place, “I would never have been able to build it.”

Howard Fine
Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.
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