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L.A. uses financial assistance to lure garment factory from South Gate

March 26, 2010 |  5:28 pm

The Los Angeles City Council voted Friday to provide $5.7 million in financial assistance to a company that is helping a garment factory relocate from South Gate to South Los Angeles.

On a 14-0 vote, the council agreed to provide Pacific Center Place LLC two buildings that were purchased by the city’s redevelopment agency for $2.7 million three years ago. The council also agreed to provide $3 million in loans, some of which would not need to be paid back if the project creates a certain number of jobs.

Officials with Service Employees International Union Local 721 have criticized the deal, saying the city should not subsidize such a project in a time of financial crisis.

“This is not creating new jobs,” said Tim Butcher, a heavy truck operator who frequently testifies for the SEIU at council meetings. “This is moving 30 to 40 jobs from somewhere else up here.”

The project received the support of Councilwoman Jan Perry and Mayor Antonio Villaraigosa’s appointees at the Community Redevelopment Agency commission, which voted 4 to 0 in favor of the plan. In a statement, Perry described the project as a key addition to the city’s apparel industry.

Under the city’s 10-year loan agreement, one of the tenants of the project, D&J Sportswear, would be required to bring 30 full-time jobs to the site in the first and second years of the agreement. That number would need to rise to 40 in the agreement’s third and fourth years and to 74 jobs in the fifth year.

Half of those jobs would need to be paid at the rate of the city’s living wage: $10.30 per hour plus $1.25 per hour in health benefits. If those terms are met, one of the $750,000 loans being provided by the city would be forgiven.

--David Zahniser at Los Angeles City Hall