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Monday, Oct 2, 2023


Bernardi Beats CRA Again

The state Supreme Court has dealt a serious blow to the Los Angeles Community Redevelopment Agency’s plans to rebuild downtown L.A. by upholding a $750 million spending cap for the CRA’s Central Business District.

The decision is a victory for former City Councilman Ernani Bernardi, a long-time Redevelopment Agency opponent whose lawsuit against the city resulted in the 1977 spending cap.

The CRA wants to raise the spending cap, which was placed on the agency in 1977, to $7.1 billion. Funds for CRA projects in the Central Business District come from property taxes on businesses in the area.

The CRA reached the $750 million spending limit for the Central Business District in 1995, and has been unable to fund new projects since. The CRA appealed a lower-court decision upholding the spending cap to the state Supreme Court, which concurred with the lower court on June 11.

The Central Business District encompasses 1,700 acres of prime commercial property in downtown Los Angeles. CRA funds in the area are used to subsidize the construction of skyscrapers and other high-profile developments. Once the current redevelopment debt is paid off, all property taxes from that region will go to the city’s general tax rolls.

Dream Deal

DreamWorks SKG signed an important production deal last week with Oscar-winning director Robert Zemeckis, bringing one of the industry’s top filmmakers to a studio that has yet to release its first motion picture.

A new production company called ImageMovers formed by Zemeckis, his former agent Jack Rapke and his producing partner Steve Starkey signed a five-year deal with DreamWorks in which the fledgling studio with finance and distribute all ImageMovers films. Zemeckis directed Best Picture award-winner “Forrest Gump,” as well as such hit films as “Who Framed Roger Rabbit” and the “Back to the Future” trilogy.

If nothing else, the deal demonstrates the pull that DreamWorks co-founder Steven Spielberg wields among Hollywood’s creative community. Spielberg actually launched Zemeckis’ career after watching a student film the director made while attending USC’s School of Cinema.

ImageMovers will be based at the Universal Studios Inc. lot, where Spielberg’s Amblin’ Entertainment is housed. Universal will hold international distribution rights to the company’s films, while DreamWorks will distribute them domestically.

The first DreamWorks motion picture is scheduled to debut this fall, when “Peacemaker” starring George Clooney and Nicole Kidman hits screens nationwide.

Hughes Victory

Whistle-blowers took a blow last week after the U.S. Supreme Court ruled against a former Hughes Aircraft Co. executive who accused the company of committing fraud in the early 1980s.

The high court decision means contractors that allegedly defrauded the government before the passage of various amendments to the False Claims Act in 1986 cannot be retroactively charged with fraud.

The decision stems from a 1989 whistle-blower suit brought by William Schumer, a former contracts manager with Hughes’ B-2 division in El Segundo who left the company in 1993. Schumer claimed that Hughes’ fraudulent accounting practices on the B-2 program between 1982 and 1984 led to about $50 million in overcharges to the federal government.

Hughes attempted to get the suit thrown out of court on the grounds that the 1986 whistle-blower amendments, which allow people who expose fraud against taxpayers to collect a percentage of court judgments, do not apply to alleged fraud committed before 1986.

The Supreme Court sided with Hughes in a unanimous decision Jan. 16. It was the first time a challenge to the whistle-blower amendments, which the aerospace industry claims have led to a flood of frivolous lawsuits, has reached the high court.

Actors Stage Protest

Commercial actors took center stage during noisy protests last week in front of the Miracle Mile offices of the Screen Actors Guild, hanging a dummy in effigy, beating drums and playing dead on the sidewalk.

The actors were protesting a three-year contract with commercial producers under consideration by SAG and the American Federation of Television & Radio Artists. Some union members object to the lack of significant payment gains for actors appearing in commercials that run on cable television.

On broadcast TV, actors must be paid every time a commercial is aired. These “pay for play” contracts do not exist on cable. Instead, there is a cap after which actors recieve no payment no matter how many times a cable network runs a spot during a 13-week cycle.

Commercial actors object to this not only because it limits their payments, but because it provides an incentive to advertisers to repeat spots on cable continually. This, they fear, will lead to overexposure it is difficult for commercial actors to get new jobs if their faces are too well-known and too much associated with other advertised products.

Ballots from union members on the proposed contract are due on June 24.

White Knightsbridge for Frederick’s

Lingerie retailer Frederick’s of Hollywood agreed last week to be acquired by Knightsbridge Capital Corp., a Chicago-based investment group.

Frederick’s, which pioneered the push-up and front hook bras, has been an L.A. retail institution since its headquarters was moved here from New York by founder Frederick Mellinger in 1947. Just over 50 percent of the publicly held company’s stock is currently owned by a Mellinger family trust.

Under the terms of the deal, which awaits approval of Frederick’s shareholders, Knightsbridge will pay $6.14 a share for Frederick’s, valuing the company at $53.4 million. The Frederick’s chain has 204 stores in 39 states.

By Dan Turner

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