Metro responds to Beverly Hills Courier story alleging large payment to developer

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The Beverly Hills Courier on Friday published a story alleging that Metro is preparing to pay $38.7 million to JMB Realty for land to use as part of the Westside Subway Extension project. The Courier said the information came from a Metro report.

The Courier also alleged that the large payment is much more than the assessed value of the land and implied that the $38.7 million was a payment to a politically-connected developer.

Metro’s response: The story is completely erroneous. 

Metro documents and studies do not in any way detail a $38.7-million payment to JMB, nor is the agency planning a $38.7 million payment to JMB.

In fact, with the Century City station at the proposed Constellation and Avenue of the Stars location, the entire subway project with the station entrance and construction area using JMB property would cost $38.7 million less than another alternative not using JMB property.

Where does the $38.7 million number come from? It appears the Courier made an incorrect assumption and a math error.

First, some background: There are two possible station locations in Century City. One is under Santa Monica Boulevard, the other is under Constellation Boulevard. Metro staff have recommended the Constellation location for two reasons — first and foremost because there are active earthquake faults under Santa Monica Boulevard. Also, Constellation is more centrally located in Century City and more people are projected to use a station in that location.

As for the math error, it appears to have come from this chart in a Metro report titled “Century City Station Location Report.” The chart shows different costs of building at either of the proposed locations in Century City and the money amounts reflect all costs for the entire nine-mile project, including potential real estate acquisitions.

 

In the chart, “Constellation A” is a station on Constellation with a portal and construction staging area on JMB-owned property. “Constellation B” is a station on Constellation with a portal on Century Plaza Hotel property and a construction staging area on Century Park East. Metro staff prefers the Constellation A configuration in the first line in the chart.

To put it in math terms:

$4,280,252,000 (Constellation B) minus $4,241,525,000 (Constellation A) = $38,727,000.

Thus, the $38.7 million figure cited by the Courier. It appears the Courier wrongly assumed that Constellation B was the option using JMB property and that it was the more expensive option. In fact, the opposite is true: Using the JMB property costs the public $38.7 million less.

And the cost of building the project along Santa Monica Boulevard? One option would be less expensive than using Constellation and one option would be more. Again, Metro staff do not believe Santa Monica Boulevard is a viable location for a tunnel and station because of seismic issues.

Metro will absolutely be paying to acquire parcels needed to construct the Westside Subway Extension and the agency will also be paying for easements for subway tunnels wherever they run under private property, whether it’s commercial or residential (here is a property acquisitions fact sheet). As per Federal Transit Administration guidelines, Metro has estimated the cost of property acquisition for the entire project. But information pertaining to future real estate negotiations with individual landowners, including potentially JMB Realty, are not disclosed until those negotiations conclude.

It is also worth noting that in correspondence with Metro, JMB Realty has requested that its property not be used as a construction staging area. The firm has also said it supports a subway station anywhere in Century City.

Finally, the Courier story intimates that JMB may be receiving a large payout due to its political contributions. JMB is a national company and is politically active — as are many individuals and businesses in the United States.

In all likelihood, there are politically active people and businesses along the entire Westside Subway Extension alignment, some of whom may benefit from having property near the subway or perhaps (if necessary) from negotiating an easement or property purchase with Metro. Metro has and will continue to try to build a project in compliance with all applicable regulatory requirements, that is within its budget and provides the most benefits possible to those who live and work in and visit Los Angeles County.

 

Categories: Policy & Funding, Projects

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13 replies ›

  1. Metro had better start eminent domain proceedings against BHUSD; given their bad behavior, they’re likely to cause trouble and refuse to negotiate for an easement.

    • Hi Nathanael,

      I think that is extreme and woukd be counter-productive at this time. I disagree with your wording; misbehavior and having an opinion are not necessarily the same thing.

      Steve Hymon
      Editor, The Source

  2. Ah, so now we come down to it: How much does BH want for an easement under BHHS?

  3. Dear John Mirisch,

    I feel sorry for you. You don’t realize it yet, but you have made a grave error and will forever be know as an obstructionist on the wrong side of history!! This subway will one of the best things to happen to the Wilshire corridor and the CONSTALLATION Station will be one of the best stations.

    Last week the new subway going in near to BHUSD’s existing oil wells was going to engulf the school in a fireball and kill countless children… This week it is some land corruption scheme based on an incorrect math assumption. We are all looking forward to next week’s fairy tale!! But please try to work a little harder….these are starting to look ameturish and desperate.

    Disclaimer: I am not affilitaed with Metro, JMB, the City or County of Los Angeles, “Metro’s” Streetsblog or any other groups.

  4. I work at the Courier (Video and Internet) , and while I don’t speak for editorial, I am amazed at how quickly people snap to judgement on this issue. The relocation plans METRO are making are not to be taken lightly. Word on the net is “METRO is right, BH are a bunch of NIMBYs, and the Courier is going over the top on the issue”. But I can guarantee you those that have this opinion are not investigating beyond the very surface.
    Get more facts before you come to a decision on this, please: http://bhcourier.com/article/Local/Local/The_Beverly_Hills_Subway_Methane_Risk_and_Beverly_Hills_High_School_-_Special_Video_Report/88119

    Metro in this very article above , and elsewhere has confirmed the the Primary reason for moving the station is safety concern over the faults found near the Santa Monica location.
    If you read reports from METROs experts, they say the fault is active and dangerous. If you read two other reports from Geotech Consultant Groups that are just as respected as METROs, you will find that from the very limited studies that METRO has done it is IMPOSSIBLE to declare the fault as active. From Shannon & Wilsons Report:
    “Based on the results of the fault trenches recently completed at the BHHS, it is our opinion that the WBHL may not be considered active, contrary to what was
    asserted in the Fault Report. Specifically, we recommend trenching be performed within the
    WBHL zone in the median of Santa Monica Boulevard near Moreno Drive to confirm the
    findings of the BHHS studies. If it is confirmed that the SMFZ and WBHL are not present, or
    determined to be inactive, if present, then a station could be considered feasible at this location from a fault hazards perspective.”
    At best, METROs study was sloppy and rushed. At worse it was influenced by “other forces”. Either way, it appears METRO is conducting a massive push to gloss over the facts that it is just as feasible and possible, and safer for the community at large to have a station on Santa Monica. Once you remove this safety factor from METROs big push, the only piece left from the above article are the also heavily contested ridership studies, which is all about $$$. And do you really think that the politicians that run METRO are so full of virtue that they are unable to be influenced???

  5. Hi Vice-Mayor Mirisch,

    If the Courier cannot be bothered to get any specifics right, how can its conclusions be considered valid? How can you argue that there is corruption, and use specific figures to prove their is corruption, and then continue to support said conclusion after those figures are proven wrong? The Courier has been proven to use bad facts to support its per-determined conclusions against the Purple Line project. The people of Beverly Hills deserve better.

  6. “While Metro may try to take issue with the specifics of the Courier’s calculations…” You mean the fact that the BH Courier misread the Metro report and wrote an entire story based on a lack of reading comprehension?

  8. Mr. Mirisch,

    So what exactly does all this have to do with the subway running under BHHS? Even if the taxpayers are getting the short end of the stick so JMB can get a payday (which all facts point to as being untrue, but that is besides the point) – it has nothing to do with the argument that the BH school board posed in the past. If the station was to be placed on the other corner at Constellation, wouldn’t the school board still be in vehement opposition of the location?

    When this whole argument began, I personally did not care where the Century City station would be placed, as I rarely venture out to the West Side. Yet after watching every tactic BH school board has employed (many of them meaningless and petty, like this JMB debacle), it has left a very bitter taste in my mouth, converting me into a HUGE supporter of the Constellation stop.

    Additionally, watching absurd amounts of taxpayer money being blown on (frankly terrible) PR tactics is also quite upsetting; if the children are in fact the school board’s first priority, why are millions of dollars being thrown at this (most likely) losing battle? I honestly feel like you and others on the school board should face legal repercussions if the legal system is to rule in favor of Metro (If they rule in BH favor, my apologies, you were correct all along). Thank god my tax dollars are not being wasted in this mess.

    I get that the school board is mad that Metro pulled a fast one on them and switched the station location – that’s politics, particularly the politics of a huge city. That being said, it is not a reason to hold one of the most congested regions in the WORLD hostage.

    And before you ask, no I don’t work for the Metro, JMB, the City or County of Los Angeles, Streetsblog or any other stakeholder. Just a concerned citizen.

  9. John Mirisch flings accusations of Astroturfing is rich when centurycitysubway.org is entirely a creature of Beverly Hills lobbying (and rather poorly done at that–your constituents may someday ask what they got for the hundreds of thousands of dollars wasted, just like the Cheviot Hills Homeowners Assocation). Beverly Hills is now the laughingstock of the nation with false and ridiculous claims, videos with explosions, and ad hominem attacks. Take heed from the lesson of Georgetown in Washington, DC – a wealthy enclave that fought the subway and is now a backwater–shoppers have deserted the district and taxi drivers refuse to brave the endless gridlock on M Street. Is that what Beverly Hills wants, in addition to its reputation in tatters?

  11. While Metro may try to take issue with the specifics of the Courier’s calculations, it does not address the fundamental issue of the role of money, influence peddling and campaign donations in the decision-making process, other than to spew forth the bland catch-all: “many businesses and individuals in the United States” are “politically active.” Well, you don’t say…(Nor does Metro do a good job of credibly explaining why the taxpayers would “save” $39 million by buddying up with JMB, other than to cite calculations by their own “experts.” As we’ve seen in the past, Metro’s “experts” are expert at expertly finding ways to reach conclusions which the internal Metro Kremlinologists feel will keep their very own Suslovs happy, or at least at bay.)

    Thanks for that insight, Steve. You probably would have done better to go right to the point and quote Jesse Unruh’s legendary comment on campaign donations: “Money is the mother’s milk of politics.”

    What is ironic about the above article is how Metro’s PR arm — rather than JMB’s own PR generals — is quasi speaking for JMB, somehow attempting to answer the suggestion that JMB has a significant financial motive to push for the Constellation Station. Of course, Metro conveniently leaves out the fact that JMB actually is backing that financial motive with financial muscle on steroids, including funding the Astroturf organization “We Do Our Part LA.” The blandness of the apologia offered above shows, in its own understated way, just how much Metro is in lockstep with JMB in designing its own PR strategy.

    In addition to the potential trip-count credits which an in-house subway station could bring JMB (financially useful in any potential effort to amend the Century City specific plan for more density and more dinero), and the other benefits from the subway JMB is already touting in its very own brochures (with the concomitant raised rent potential and even more dinero for the JMB coffers), Metro admits above that its own monetary negotiations with JMB would be filed in a “confidential” dossier until those negotiations are concluded. In other words, we’ll find out about the extent of the financial commitment and deal-sweeteners between a Public Agency chaired by one of the largest beneficiaries of JMB’s largesse and JMB itself once those secret negotiations are concluded. And that’s a process that is supposed to inspire public confidence? Really?

    Rather than get lost in the weeds of the specifics of the Courier’s articles in a blatant attempt to discredit the Courier, which only serves to distract from getting to the core of the more important issue, one could do a lot better by moving away from those weeds and by looking at the bigger picture. Let’s just say that the words of Jesse Unruh seem as true today as they ever were.