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The Death of the 1601 N. Vine Project: A Video Tragicomedy about City Hall Corruption and Failure Starring Eric Garcetti

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It was called the “Cesspool on Vine,” the “Vinegate Scandal,” a “fraud against the people” and the “poster child for all that’s wrong” with Community Redevelopment Agency — the entertainment office project at 1601 N. Vine St. that wannabe mayor Eric Garcetti wanted so badly for so long to “bring Hollywood back to Hollywood.”

Developer Hal Katersky declared before the City Council 361 days ago that it was “shovel-ready” and construction would being in the fall. By the time fall came, Katersky’s runaway film production studio in Albuquerque was bankrupt and his labor union financiers booted him out of his role the 8-story, $60 million premium office project at Selma and Vine.

By year’s end, the Community Redevelopment Agency that had bought the empty lot from Katersky for $5.45 million in 2006 — a month after he bought it from the Ullman family for the same price — and contracted to sell it back to Katersky for $825,000 was itself no more. The deal was left in limbo along with hundreds of others.

On Feb. 16, Chris Essel, CEO of the defunct agency, told the panel appointed by the governor to clean up LA’s redevelopment mess that 1601 N. Vine project was in serious trouble because “material changes” had occurred and the new developer was unable to meet the conditions of the CRA contract.

Specifically, the requirement for entertainment industry tenants was unattainable so the contract would have to be negated or renegotiated by the new redevelopment panel, the designated local agency headed by developer Nelson Rising.

The $4.6 million gift of taxpayer money promised to Katersky and his Pacifica Ventures was no longer on the table.

With the project all but dead, the land sits idle with the only winner of this dark comedy about City Hall corruption being Mrs. Kwok Yi, owner of Molly’s Burgers who managed to walk away with a $1.1 million payday from the CRA and Katersky to close her modest stand adjacent to the office project site.

So much was wrong with this project from day one that it never should have gone forward, never would have gone forward, were it not the force driving being Garcetti, the Council’s President.

He acknowledges the Ullmans are his friends but they wouldn’t sell the property to the CRA because of an earlier dispute so the site was sold to Katersky to sell in a sleazy buy-back deal to the CRA.

The CRA’s own appraisal of the property in 2006 was 30 percent lower than the $5.45 million selling price which was based on an appraisal supplied by Katersky. CRA officials have never explained why they used the seller’s appraisal and so much more than the property was worth in 2006 — and as much as twice what it is worth today as part of the agency’s legacy.

All this and more was brought to light by community activists through dogged leg work and the California Public Records, presented at numerous public hearings and written about  on blogs, websites and in corporate media.

Time after time — more than a dozen times in all — Garcetti pushed the project forward and finally on March 9, 2011 ran roughshod over opponents to win Council approval with only Paul Krrekorian voting against it.

Garcetti offered his absolute personal assurance that he had personally investigated every allegation about this project and was totally satisfied that despite the mistakes that were made, there was nothing corrupt about it and the project would be built as planned as create hundreds of temporary and permanent jobs and helped spark the continued revival of Hollywood.

He was wrong, dead wrong.

Given that he is now a leading candidate for mayor in city elections next March, it is important that voters watch what transpired at that Council meeting a year ago and decide for themselves whether Garcetti was lying or just plain stupid.

DOCUMENTS: FinalCouncilAction, FullCouincilFile3-9-11 Council MeetingVideo,  CityWatchLA, ronkayela.com


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