County, Needing Money, Seeks to End Land Dispute

Los Angeles County is almost broke, unable to provide enough care for growing numbers of poor. The city of Los Angeles has plenty of money.

That paradox of local government will be at the top of the agenda today when the Los Angeles County supervisors meet in executive session to discuss a longstanding fiscal dispute with the city.

The immediate issue is a property dispute of sorts.

The county owns land--now occupied by parking lots--near the Music Center in downtown Los Angeles. The county wants the land leased to developers, who would put up high-rise office buildings and a hotel. The new Walt Disney concert hall will also be built on the land.

City Permission Needed

The county needs city permission to develop the land as heavily as it wants. But the two levels of government have become locked in a bitter dispute over the construction and the revenue it could produce.

Today, the supervisors will hear a report from their staff on the dispute and try to begin to chart a course toward a solution.

“I can tell you it is being given very top-flight attention,” said Supervisor Ed Edelman, who represents the downtown area--and whose district also includes some of the county’s poorest areas.

It is being given attention because the county is stuck with some of government’s most difficult and expensive tasks. It must run the welfare system, the county hospitals and health clinics, and the courts and jails.

Yet its primary source of local revenue, the property tax, is limited while the city, with booming revenues from the sales and business tax and other levies, has enough money to increase the size of the Police Department, boost other services and have a generous reserve fund.

AIDS is the responsibility of county health officials. So are trauma centers, those expensive facilities for critically injured victims of violence.

Earmarked Programs

Edelman said money from leasing the land would help support the county’s growing obligation to the courts, the jails and a health care system of six hospitals, 42 health clinics, five comprehensive health centers and other programs.

For example, the budget just proposed by county Chief Administrative Officer Richard B. Dixon projected a shortage of $155.8 million in the coming year for the vast health program.

Under state law, the county must provide health care to all who need it: It is the hospital of last resort for the poor. County officials said that with the number of uninsured poor increasing, a growing burden is being placed on county facilities.

For the coming year, Dixon said that he believes help will come from the expected $2-billion state surplus, announced by Gov. George Deukmejian last week.

But the long-range prospects are grim, county officials said.

That is why revenue from the leasing of the downtown land is important to county officials.

Gerald A. Roos, assistant county administrative officer, said that if the county is permitted to lease the land to developers, who would put up the hotel and office buildings, it could add at least $10 million a year to the county treasury. A bigger development on the same land would double that figure, Roos said.

But that simple assistance in the county’s fiscal dilemma may not be attainable.

That is because of the dispute between the city and the county, caused in part by the paradox of one being short of money and the other being fairly prosperous.

The city has substantial sources of revenue.

Sources of Funds

The sales tax, pouring in from new malls and other retail developments, is one. Business taxes, boosted by the arrival of big law and accounting firms and other businesses, is another source of revenue. So are property taxes, even though they were limited by Proposition 13 of 1978.

In addition, the city has another, more controversial source of revenue--redevelopment. Large amounts of land are declared to be slums and placed in a redevelopment area. They are sold at low value to developers, who put up big buildings.

Those buildings raise the value of the land, boosting property tax revenue. The revenue from those now-valuable parcels of land goes to the city’s redevelopment agency, which uses it to improve the redevelopment area.

That was done in downtown Los Angeles, over objections from the county, which said it needed a portion of the new property taxes in the redevelopment area to maintain the hospitals, courts and jails. As a compromise, a limit, or a cap, was put on the amount of property taxes the city could get from the downtown redevelopment area.

Want Cap Lifted

Now, Mayor Tom Bradley and the city Community Redevelopment Agency want that cap lifted. The county will not agree unless it is given permission for its high-rise development--and to keep the additional property taxes that the development would bring.

While the immediate issue is the development of the Music Center land, the long-range issue involves priorities attached to the spending of government funds, officials said.

Bradley said he wants the limit lifted so property tax revenues can be used to begin a new city housing program for poor and working-class residents.

County officials, while conceding the need for such housing, said the run-down health system and the overcrowded jails and courts operated by the county need the money more urgently.

There are other aspects of the dispute complicating a settlement. Some City Council members, for example, want to weaken the control by Bradley and the redevelopment agency over the increased property tax revenues. And city planners object to the huge size of the county development, which would pour cars and people into the already packed Civic Center area.

Edelman said today’s meeting is important because it means the supervisors themselves are getting involved in the negotiations, rather than leaving it to their staff, as has been the case.