The L.A. Live Playbook, Part 2
Residents, labor, and community groups fought for a piece of the development pie. What did they get?
In the first chapter of this story, we looked at how people who lived on one of the poorest census tracts in all of Los Angeles County won the first community benefits agreement from developers. You can refresh your memory on how that happened here.
Today, we’re going to be looking at what they were promised. But first:
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Here’s the big stuff mandated by the CBA between the developer and the community coalition. I’m leaving out some stuff like “the developer won’t hire any irresponsible contractors,” not because those aren’t important lines, but because there’s a lot of it. Also they’re harder to riff on.
Living Wage Program!
At least 70 percent of jobs at L.A. Live had to be living wage jobs. If they weren’t close to hitting that number for two straight years, AEG had to meet with the coalition to figure out how to fix it. AEG was required to report this number annually, with breakdowns of each employer on the site. (Remember, L.A. Live includes hotels and restaurants which would be neither owned nor operated by AEG.)
The CBA defined a living wage job with an annual salary minimum ($16k-$18.5k depending on health insurance) and an hourly minimum ($7.72). Union labor automatically qualified.
AEG verbally agreed to a living wage standard for the Staples Center before it was built, only to renege once they got to hiring. People got really pissed, obviously, so they eventually caved. The community learned their lesson anyway and got the commitment in writing here. In fact, it was their experience with the living wage agreement that motivated the CBA!
Local Hiring and Job Training
“Locals,” in the context of the CBA, included people who were displaced by Staples Center, low-income people living within a three-mile radius of L.A. Live, and people living in low-income census tracts throughout LA.
AEG had to spend $100,000 to launch a customized job training program for local applicants, who would then be funneled into job openings through a referral system. The coalition and AEG would bring in a nonprofit to run the referral program.
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Affordable Housing
Along with the local hiring provision, the affordable housing piece was seen as the major coup of the agreement. It also contains the vaguest language, which posed legal problems for the coalition later on.
Anyone who develops real estate in Los Angeles helps finance affordable housing construction through what’s called a linkage fee, which ranges from $3-$15 per square foot depending on the type of real estate.
Per the terms of the agreement, AEG was required to pay for the construction of one affordable housing unit for every five units it was building at L.A. Live, within a three-mile radius of the project site. While not specified in the CBA itself, the city’s development agreement with AEG conditioned the permitting of the market-rate units on the completing of the affordable ones. About forty affordable housing units had to be finished before AEG could get their 251st unit permitted (it was planning to build between 500 and 600 units on site).
The affordable units would be for families earning between zero and 80% of the area median income, and they had to remain affordable for a minimum of 30 years. Renting priority would be given to people who were displaced by Staples just a few years earlier.
While the CBA set a quantity of units (1 affordable for every 5 on site), it didn’t set a dollar minimum for developing those units (i.e. how much they should be responsible. This eventually became an issue as we’ll see later.
Finally, AEG had to contribute $650,000 in interest-free loans to area nonprofit housing developers, which could use the money to buy land, improve existing buildings, or pay for various development expenses.
Parks and Recreation
Requirement: The developer, AEG, had to fund a needs assessment of parks and recreation facilities in the South Park area, which at that point contained less than a quarter of the park space acreage required by the city. Then AEG was on the hook for a million dollars toward the construction or improvement of parks within a mile radius of L.A. Live according to that need. The developer was required to choose the location of the park with the coalition.
Important caveat here — AEG already owed the city parks & rec fees exceeding $1 million for developing such lucrative properties on a parcel in the middle of Downtown. As part of the agreement, AEG got to count this million toward its overall obligation to the city.
Eighty percent of the million had to be spent within 4 years of needs assessment, and the park construction had to be done by year 5.
Also, L.A. Live itself needed a public space component — a street-level plaza of about an acre in size, plus other “plazas, paseos, walkways, terraces, and lawns.” Makes you think: If a billion-dollar development gets built, but it doesn’t include a paseo, were taxpayers ever ripped off?
Other stuff that may seem small to you but which someone almost certainly went to the wall negotiating for
AEG had to support the establishment of a permit parking district so that visitors wouldn’t be able to street park and walk to L.A. Live, and to the extent this cost money, had to throw in up to $25,000 a year for up to 5 years to make the magic happen. Parking!
AEG had to put more trash cans in the area. This is the hill I, personally, would have died on.
Analysis
At the turn of the millennium, it was already true that real estate ran Los Angeles. It would be hard to argue that its power here has not increased since then. If you live here you know the big names — Rick Caruso, Geoff Palmer, Donald Sterling (yes, him), Ed Roski, and of course, Tim Leiweke and Philip Anschutz, who (with Roski) made Staples Center and L.A. Live and Downtown LA what it is today. The New York Times wants to know if Caruso will run for mayor; the man who brought you The Grove won’t rule it out.
There are tens of thousands of people living on the streets of Los Angeles, and then a pandemic hits. Renters line up in cars for blocks to honk at the mayor’s house, pleading for a rent freeze as hundreds of thousands of Angelenos lose their jobs and debt begins to pile up. It’s hard to be optimistic about that policy happening in Los Angeles.
But, enough people honk and who knows. It would be overly simplistic to say the L.A. Live CBA was the result of a lot of honking. It took years of community organizing, voter registration, legal know-how, and failure to bring it into existence. It was an achievement against the wind of the strongest institution this city has.
A few weeks ago, I called up Gilda Haas, one of the anchors of the coalition as director of Los Angeles Alliance for a New Economy, to ask what her takeaway from it was. (She’s now a professor at UCLA.)
“We never really thought of the CBA as an end in itself,” she said. “It was part of the larger, longer long term trajectory towards building a shift in the kind of power relationships that determine the fate of South LA. You can change the name, you can push the people out, but the fight will still continue.”
Next Week
Did AEG actually do any of this stuff? The answer may surprise you!