City Scraps Little Tokyo Office Plans

Saying that the city must take steps to cut expenses, the Los Angeles City Council voted Wednesday to scrap a 6-year-old proposal to build a municipal office building in conjunction with a private hotel, apartment and retail development near Downtown’s Little Tokyo.

The council members, voting 11 to 2, said they can no longer justify building the $151-million municipal office tower when the city is reducing staff.

“Times have changed, things have changed,” Councilman Hal Bernson said. “Our prime commitment has to be to the people by trying to manage the city in the most cost-effective manner.”

The council’s decision, however, came under heated criticism from the project developer and Little Tokyo merchants, who were counting on the development known as First Street North to bring more business to the area.

“It’s a sad day for not only for Little Tokyo, but also for Los Angeles,” said Tom Kurai, spokesman for the Japanese Village Plaza on 2nd Street. “A lot of people were waiting a long time for the City Council to help the community and a lot of people were disappointed.”

Frances Hashimoto, president of the Little Tokyo Business Assn., said: “We have looked forward to this project. To stop it now is a slap in the face.”

Michael D. Barker, the managing director for the Barker Pacific Group, said his company would file a claim against the city to recoup the $7 million that Barker Pacific has spent planning the project.

“I think the city has made a major mistake,” Barker said. “It has confirmed that doing business with the city of Los Angeles is very risky. The City Council does not have the gumption to follow through with what it set out to do. It’s spineless.”

But council members said the city would be remiss to continue with the ambitious development in the wake of the recession.

“We are obligated to have the courage to say circumstances have changed,” Councilman Zev Yaroslavsky said. “This is not 1988. The economy has changed, the city needs have changed.”

He suggested that the city consider buying or leasing a small office building near the Civic Center if it needs more space.

However, Councilman Richard Alatorre, a strong supporter of the project, accused his colleagues of being shortsighted.

“What has really changed that would dictate to us that it is a better deal to lease than to own?” Alatorre asked the other council members. “Ladies and gentlemen, it is illogical. I know that ownership is better than leasing.”

He also said it sends a bad message to pull out of a deal with a developer.

“We just can’t change the rules midstream and get sued and have to pay time and time again,” Alatorre said. “It is time that we live up to our commitments.”

Councilman Joel Wachs also voted against the proposal to kill the project, saying he needed more information on the matter.

The city began negotiating in 1988 to build the 1.25-million-square-foot project on 11 acres of city property bounded by 1st, Alameda, San Pedro and Temple streets.

The project was to include a 500-room hotel, shops, hundreds of apartments, a plaza, two museums and a memorial to Japanese American veterans of World War II.

Until this year, the project had met little opposition from council members.

However in February, Mayor Richard Riordan sent a letter to the council asking it to scrap the project, saying it was too costly. He added that the plan did not coincide with the guidelines to bolster development in the downtrodden historic core of the city.

“Undoubtedly the project offers many potential benefits, particularly for the Little Tokyo community,” Riordan wrote. “However, I have concluded that the potential benefits do not justify the costs of the project.”

Times correspondent Tommy Li contributed to this report.