Proposed Mandates on Projects Opposed by Developers

Staff Reporter

Developers are mounting a campaign to stop or at least blunt attempts on three fronts by the city of Los Angeles to impose new requirements on building projects.

A so-called inclusionary zoning ordinance that is being crafted by the L.A. City Council and supported by Mayor James Hahn would require developers to set aside a certain percentage of residential units for badly needed affordable housing.

The other two proposals would require developers to prepare "community impact reports" that detail the effect a project would have on local pay scales and the mix of businesses in the area.

Supporters say the reports would help developers head off major battles with community residents early in the entitlement process.

Developers are opposed to all three proposals.

"Taken together, these ordinances would make it much more difficult, if not impossible, to develop properties in Los Angeles," said Carol Schatz, president and chief executive of the Central City Association, which is spearheading the fight against them.

Affordable housing advocates long have lobbied for a mandatory set-aside because they say leaving it up to the marketplace has proven inadequate. Inclusionary zoning ordinances have been passed in other cities, including Pasadena.

A majority of councilmembers has expressed support for the inclusionary zoning concept. The debate now revolves around what percentage in square feet of a residential development needs to be set aside, and how much developers should pay into an affordable housing fund.

The measure could come before City Council early next year. If the council orders major revisions, it could be several more months before an ordinance is actually implemented.

Developers have already begun working against its passage.

"The most serious issue for us is how we're going to pay for this," said Ben Reznik, an attorney with the law firm of Jeffer Mangels Butler & Marmaro LLP, which represents several developers opposed to the ordinance. "If the city has no intention of subsidizing this, we don't see how these projects are going to get done."

New 'red tape'

The issue of community impact reports could come to a head much sooner. Labor and working poor advocates are pushing for proposals larger than 100,000 square feet to be included in the reports, which they say are necessary because of the proliferation of low-wage jobs on city-subsidized development projects.

The idea is to alert decision-makers about the job impacts of projects as they decide on them.

"The existing environmental review process does not take this into account, or if it does, it's buried amidst hundreds of pages of documents," said Roxana Tynan, spokeswoman for the Los Angeles Alliance for a New Economy. "This would put this information all in one place, in an easy-to-read format and at the front end of the process."

LAANE, which in the mid-1990s pushed through the city's living wage ordinance, has a proposal for community impact reports that's coming up for a hearing at the Oct. 30 Community Redevelopment Agency board meeting.

The proposal is primarily aimed at large retail projects that end up with tenants paying low wages and displace neighborhood mom-and-pop stores. Wal-Mart Stores Inc. has for years been readying a push to enter L.A. and this proposal is widely seen as a way to block or at least slow its entry.

Tynan said the proposal would not stop or slow projects as they move through the entitlement process.

"It's not a very complex document we're asking to be prepared and in all likelihood, it's the CRA itself that will prepare the bulk of the report," she said. "And it will help developers make the case for their projects to the community up front, instead of having to respond to community concerns at the last minute."

Opponents dispute that premise and say the impact of such an ordinance would be far more dramatic.

"It will become just another drag on what is already a slow and often tortuous entitlement process," said Mark Tolley, managing partner of Long Beach-based Urban Pacific Builders LLC, which is working on a couple of infill projects in downtown L.A.

Tolley said the reports "could be used by union interests to control part of the approval process and through that extort their pound of flesh from developers and property owners."

Added Tom Gilmore, a developer of downtown lofts: "This could very well turn into an agenda for LAANE to wring concessions out of developers on union jobs and pay scales."

The LAANE-sponsored ordinance would only apply to proposals in CRA project areas. But L.A. City Councilman Eric Garcetti this past summer pushed through an ordinance asking the city's Community Development and Planning departments to develop a similar proposal for the rest of the city.

Zoning Debate: Three proposals would impose mandates on developers.

Inclusionary Zoning: Would require developers of projects with residential component to set aside a portion of living units as affordable housing or possibly pay a fee.

CRA Community Impact Report: Would require developers of projects over 100,000 square feet in project areas to include report detailing impacts on jobs, pay scales and store mixes.

Citywide Community Impact Report: Would extend requirement for impact reports to all parts of the city.

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