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Grand Avenue developer might avoid penalties

February 12, 2009 |  4:39 pm

Grand Moving to save what has been billed as a centerpiece of downtown L.A.’s revitalization, local officials are considering a proposal that would defer a $250,000 monthly penalty that the Grand Avenue project developer is supposed to start paying Sunday.

The hefty penalty was negotiated last year after numerous delays in construction of the $3-billion, Frank Gehry-designed complex.

At the time, the developer promised to begin construction by Feb. 15 or pay the fines. But Los Angeles County Supervisor Gloria Molina said Thursday that Related Cos. had asked to waive those fines and that the city-county board that oversees the Grand Avenue project is considering the proposal.

Like many developers, Related has struggled to gather the construction financing needed to break ground amid the nation’s financial meltdown.

"It’s a matter of how they’re going to pay for it," Molina said. "The reality is, there [are] no banks to pay for it."

Several sources familiar with the negotiations confirmed the details of the developer’s request and said that the deferment of the $250,000 payments was most likely.

They also said it was likely that the civic agencies would ask for a smaller payment, closer to $100,000, perhaps to be made annually, to defray some of the costs of ongoing work on the project by the civic committee that is overseeing the project.

Paul Novak, a planning deputy for county Supervisor Mike Antonovich, who has been a vocal critic of the Grand Avenue project, charged that the renegotiation of the penalty was being done with little or no public comment.

The members of the authority apparently discussed the deal in a closed session Monday, but did not report  any information about their discussion to members of the public. The concern, Novak said, is that this is "very much a backroom deal. We would just like the developer to live up to the original deal. Every time something happens, they want to come in and change the deal, and it’s not in the public limelight."

—Cara Mia DiMassa and Molly Hennessy-Fiske