DOWNTOWN LOS ANGELES - One of the most closely watched Downtown projects is the proposed streetcar. Proponents of the effort, led by 14th District City Councilman José Huizar, have described it as a transformative piece of urban infrastructure. They claim the streetcar would help circulate pedestrians through the Central City, reduce car trips and stimulate business on and around the route.
All that comes at a price, of course, and recently, the price has come more clearly into focus. It turns out that the streetcar, which would run from L.A. Live to Bunker Hill with a main spine on Broadway, is estimated to cost $125 million. Downtown property owners will be asked to dig into their pockets and come up with $62 million. Federal grants will be sought for much of the remainder.
Price is a huge issue, but right now there is something even more important: It’s the matter of who gets to decide whether or not area property owners will be charged for the streetcar. Under the current scenario, those who will pay may have no say.
We cannot support this. It is unfair to have an election that will impact people financially without giving those very people a voice in the approval process. Although we think that streetcar organizers have come up with a wise concept in determining exactly how much landowners would fork over, we can’t accept requiring them to go along with the assessments when they will be forced to the sidelines.
We suggest streetcar officials come up with a different plan, one that allows everyone who will have to pay annual assessments to have a say in whether those fees are put into place. Some may worry this will doom the development. It could, but that’s not the primary point of concern here.
Property owners who pay for businesses improvement districts get to vote on whether or not they are taxed. Those who will pay for a streetcar deserve the same opportunity.
As Los Angeles Downtown News reported this month, project officials have generated a plan in which registered voters who live near the streetcar route will decide whether or not landowners are taxed. It doesn’t matter whether the voter owns or rents a home: all they have to do is reside in the vicinity. The approval of two-thirds of the voters is required to create the special tax district. A vote is expected by the end of the year.
Those who own property within about three blocks of the route will only get to vote if they also live in the community. Working near the route or owning a business does not provide the right to cast a ballot.
In other words, someone who owns property worth tens of millions of dollars but who lives outside Downtown can’t vote. Meanwhile, someone who rents an apartment near the streetcar gets a say, no matter how long they intend to stay in Downtown.
Streetcar officials have spent a lot of time analyzing similar projects and funding mechanisms, and we know they have not come to this decision lightly. One question they had to answer was whether condo owners would pay.
In a March story in Downtown News, streetcar officials said that if all property owners were to cast ballots, then residential property could not be taxed. That would have meant a larger chunk of the money would come from commercial landowners (residential square footage accounts for about 30% of the property along the route).
Thus, officials had to make a choice: Do they only allow registered voters to have a say, and get the benefit of reduced assessments for commercial property owners? Or do they let all landowners go to the polls, in which case those same commercial property owners would face higher fees because residential units can’t be taxed? Either scenario seems irrational.
We do think that officials have come up with an appropriate formula to determine how much people will shell out. Rather than making decisions based on a building’s gross square footage, the dictating factor is the parcel size. Thus, in the case of a 10-story rectangular building on a 10,000-square-foot lot, the assessment would come from the ground level figure, not the total 100,000 square feet.
Condo owners, meanwhile, would pay on a proportional basis of the same parcel square footage. The average condo owner would pay $100-$200 annually.
Rates would be from 20 to 59 cents a square foot, with the higher price for those right along the route, and the bottom tier for property owners about three blocks from the tracks.
No matter what, the vote will not be easy. Project proponents will have to persuade residents that it’s worth paying more taxes for the urban circulator. They’ll need effective, clear communication.
However, right now, not everything is right. Those who will pay deserve a vote.
© Los Angeles Downtown News 2012
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