Vol. 12, No. 2,856W - The American Reporter - March 18, 2006

City Beat

by Joe Shea
American Reporter Correpondent
Hollywood, Calif.

HOLLYWOOD, Feb. 28, 2003 -- Less than 10 hours after The American Reporter revealed that desperately needed new low-income senior housing in Hollywood remains vacant months after it was fully rented and ready for elderly tenants, the Los Angeles City Council quietly sent a CRA request for $50,000 to pay a famously expensive Hollywood law firm after it learned of "a potential conflict of interest" in yet another low-income housing portion of controversial redevelopment projects at Hollywood Blvd. and Western Ave.

It was not clear whom the "potential conflict of interest" impacted. It may relate to a $5 million CRA subsidy of Hollywest apartment project at Western Ave. and Carlton Way, or to a law firm that represents one or more of the parties, or any of the city's complex dealings with developers.

A motion made Friday at the request of the Chief Legislative Analyst William Fujioka to increase payments to Greenberg Glusker Fields Claman Machtinger & Kinsella - the firm that represented Disney president Jeffrey Katzenberg and the Beverly Hills heiresses who own Winnie the Pooh - did not appear on the council agenda but was found via the council file index on the www.lacity.org Website. The firm's lawyers earn up to $750 an hour.

Meanwhile, both Councilman Eric Garcetti, whose 13th District boundaries include the HollyWest Promenade project, and Hollywood-area Councilman Tom LaBonge told The American Reporter that they would take action to help low-income seniors who were told months ago the $9-million apartment complex would open at the start of the year.

"We're on it," said Garcetti in an email note Friday morning.

"Call me back tomorrow and I'll tell you what I'm going to do," LaBonge said late Thursday afternoon. His district boundary is directly across the street from HollyWest, a mixed-use project combining 100 low-income senior housing units with retail space below. The retail space is mostly filled, and the delay was traced Thursday to easement negotiations involving the Ralphs supermarket and the Ross discount clothing store that are below or beside the apartments. Jamba Juice, Starbucks and Blockbuster have opened shops in the center, while the senior housing remains rented and ready but eerily vacant.

In new developments on the HollyWest Promenade senior project Friday, a search of the council file index also revealed that in Jan. 2002 the council approved an appropriation "increasing the purchase price for the housing component by $2,243,500," and terminated a loan committment to the present buyer, the Retirement Housing Foundation, after ownership changed from developer Ira Smedra's Arba Group to California Investment Partners, an entity created by Victor MacFarlane and the California Public Employee Retirement System, or CALPERS. RHF remains the buyer, according to Richard Washington, the church-affiliated foundation's vice president for business development.

The principal owner of the HollyWest Promenade is Victor B. McFarlane of San Francisco, who heads McFarlane Partners, the largest minority-owned real estate investment management and advisory firm in the country. MacFarlane sold his investment advisory business to General Electric's GE Capital Management in 1996 and was CEO of the GE unit until 1999, when he branched out into urban redevelopment projects and formed Hollywest Promenade LLC amd California Urban Investment Partners with CALPERS, the nation's largest retirement fund.

MacFarlane acquired half of the new AOL Time Warner Center project on Columbus Circle in New York City on Feb. 3 this year, including 558,000 square feet of office and retail space and a 504-car parking garage. He is a partner in the Santa Barbara Plaza in South Central with Magic Johnson, who in turn is partnered with the CRA at the slowly-rising Hollywood Marketplace project at Sunset and Vine, where the agency paid for a $2.8-million, 904-car garage. Some 50 low-to-moderate income units can be built there at the CRA's option.

Copyright 2006 Joe Shea The American Reporter. All Rights Reserved.

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