Deals & Dealmakers—Staples II Developer Seeks City Aid

0

As expected, developers of the proposed downtown hotel and entertainment complex adjacent to Staples Center have asked the city for a $75 million tax subsidy.

Officials of Philip Anschutz’s L.A. Arena Co. said the $1 billion development, which would be anchored by a 45-story hotel and include a 7,000 seat arena, restaurants, shopping and housing, is not economically feasible without the public subsidy.

Representatives of Anschutz and Rupert Murdoch, the other main partner in the development, already have reached agreements with neighborhood activists and unions to gain support for the project. Although serious city opposition is not expected, developers are unlikely to receive the quick approval they sought before Mayor Richard Riordan exits and several City Council seats change hands at the end of the month.

Opponents, particularly those from the San Fernando Valley, have charged that the subsidy is a misuse of public money. But city officials like Legislative Analyst Ron Deaton contend that the massive project will generate ample taxes to more than make up for the subsidy, while bringing much-needed jobs and quality facilities to the neighborhood.


Home Prices Rise

The median price of homes sold in Los Angeles County in May jumped 13 percent over last year, the biggest growth spurt in 12 years, according to a report from DataQuick Information Systems.

The new median was a record $219,000, according to the report, with low- and middle-end homes appreciating faster than luxury residences.

Typical home values in Los Angeles County are about 10 percent higher than peak levels of a decade ago. That’s less than many other metro areas around the state, but Los Angeles County, with its bigger supply of moderately priced houses, has been gaining momentum even as activity has slowed a bit in neighboring counties, where average homes are out of reach to many families.

In Los Angeles County, more than 10,000 homes were sold in May, about the same pace as a year ago.


HBO Renews Lease

AOL Time Warner Inc.’s Home Box Office will stay put at the Century Plaza Towers for at least the next decade.

In a deal valued at about $60 million, HBO agreed to keep its main Los Angeles office at the Century City complex for 11 more years. The premium cable channel expanded its lease commitment within the Towers to a total of about 123,000 square feet.

HBO’s facilities are currently on several floors. The expanded lease covers the equivalent of about five floors of offices in the twin 44-story towers’ southern building.

Travers Realty Co. negotiated on the tenant’s behalf and Trammell Crow Co., which leases and manages the Towers negotiated on behalf of the landlord, an investment fund managed by an affiliate of J.P. Morgan Chase & Co.


Money Manager Sold

Glendale-based Van Deventer & Hoch has been acquired by asset management giant Mellon Financial Corp. as the company moves to build its investment operations aimed at wealthy people.

Van Deventer & Hoch manages or administers about $1 billion in funds for rich clients and will beef up Mellon Private Asset Management, Mellon’s unit that manages money for individuals, families, charitable endowments and foundations.

Financials of the deal, which is expected to close by the end of this year’s third quarter, were not released.

Mellon Financial, which runs the Dreyfus family of mutual funds, among others, has a total of about $520 billion under management.


Australia Wants Global Hawk

Australia has made a formal request to purchase as many as six of Northrop Grumman Corp.’s Global Hawk unmanned airplanes to patrol its coastline.

If approved by the Pentagon, the deal for six Global Hawks and a ground control system could be worth as much as $250 million for the Los Angeles-based defense contractor and improve its already strong position in the emerging market for pilotless planes.

The Global Hawk program received another boost last week when Northrop received $20.5 million from the Pentagon to begin production of the airplanes for the U.S. Air Force. And earlier this month, a Pentagon panel recommended buying additional Global Hawks.


Theater Lawsuit Dismissed

A Los Angeles Superior Court judge has dismissed a lawsuit by House of Blues that Los Angeles officials improperly tossed out its bid for the contract to run the city-owned Greek Theatre.

House of Blues charged that the L.A. Recreation and Parks Commission erred by ignoring an analysis that found its bid superior to one submitted by rival concert promoter Nederlander Organization. The commission voted Feb. 21 to throw out both bids and start over.

But Judge David Yaffe said House of Blues didn’t have enough facts to back up its claims and dismissed the suit. Yaffe did give House of Blues three weeks to refile with more information.

The dismissal closely followed the release by city officials of a list of minimum requirements by new bids, including a guarantee of $15 million a year in revenue.


‘Storm’ Lawsuit Proceeds

A Florida judge said a lawsuit brought against Warner Bros. by the families of fishermen and others portrayed in the movie “The Perfect Storm” can go to trial.

The wife of captain Frank William “Billy” Tyne Jr., and her two daughters sued Warner Bros. in August, charging that the movie cast Tyne in a negative light and was produced without their consent.

Time Warner Inc., then parent company of Warner Bros., asked a judge to dismiss the case, which tells of the sinking of a fishing boat during a major Atlantic storm. By denying the motion, the judge cleared the way for a trial to begin next June.

The Tyne family said it should get a cut of the film’s $100 million in ticket sales because the movie falsely depicts William Tyne as an “incompetent” captain. Others have since joined the lawsuit, which also names producers Baltimore-Spring Creek Pictures and Radiant Productions as defendants.


Farmers Market Leasing

New retailers at the expanded Farmers Market will include Cost Plus World Market, Coffee Bean & Tea Leaf, Marmalade Cafe and Organized Living, an upscale housewares retailer, according to A.F. Gilmore Co., the longtime owner of the property.

The $45 million Fairfax district project is going up alongside a much larger $100 million retail complex being built by Caruso Affiliated Holdings. The Grove at Farmers Market will feature an FAO Schwartz, Nordstrom department store and a 14-screen theater complex. Both projects are scheduled to open in March 2002.

Gilmore officials said much of the original market will remain intact, but some new buildings are being added as part of the expansion. The new structures are designed to blend in with the original complex’s style and scale.


More Cuts at L.A. Times

Citing a sluggish ad market and the high cost of newsprint, the Los Angeles Times will eliminate at least 30 jobs as part of a major cost-cutting effort by its parent corporation, Tribune Co.

Chicago-based Tribune’s goal is to eliminate about 6 percent of the 21,000 employees at its daily newspapers and television stations. About half of the cuts are expected to result from an early retirement offer.

More than 900 of The Times’ total staff of about 6,000 are eligible for the early retirement offer. Fewer than 50 jobs will be eliminated involuntarily, officials said.

The buyout plan is expected to reduce Tribune’s overall workforce of slightly more than 26,000 employees by 3 percent, or more than 750 people. Another 3 percent will be cut through reorganization.


Univision Buys Stations

Univision Communications Inc. has agreed to buy two independent television stations in Puerto Rico, further expanding its reach.

Univision, the nation’s largest Spanish-language media company, will purchase the stations from Montgomery, Ala.-based Raycom Media Inc. The stations reach all of Puerto Rico’s 1.3 million households.

Terms weren’t disclosed, but the purchase price was reported to be about $50 million.

Meanwhile, Univision said it completed its $1.1 billion purchase of 13 stations from Barry Diller’s USA Broadcasting Networks. Univision is expected to complete the purchase of USA’s nine remaining stations in September and January.


Leasing Company Orders 111 Planes

Expanding its fleet even as air travel declines in some regions, International Lease Finance Corp. of Century City has ordered more than 100 airplanes valued at $9.4 billion from Airbus Industrie.

ILF, a unit of insurer American International Group Inc., leases aircraft to airlines around the world. It will buy 10 of Airbus’ 550-seat A-380s, 80 smaller A-320s and 21 of the A-330s, for a total of 111 planes.

Meanwhile ILF reportedly is interested in buying Debis AirFinance from DaimlerChrysler, which has suffered losses in its truck- and car-making operations and has put its aircraft unit up for sale to raise cash.

Daimler is looking to sell Debis AirFinance just seven months after it expanded the unit with the $750 million purchase of AerFi Group of Ireland. With AerFi, AirFinance had a $5 billion portfolio of 222 planes owned or under management.

No posts to display