Los Angeles - L.A. Controller Ron Galperin today released a first-of-its-kind report on up to $1 billion in tax incentives offered by the City for large-scale real estate developments. The report includes recommendations for approved and possible future projects to better achieve total accountability, transparency and the best value for the public.
The Controller’s Office conducted an in-depth review of agreements centered on five projects, which were approved to receive up to $654 million in tax refunds or abatements over a 25-year-period. The City also approved an additional $345 million in tax incentives for three more projects. These incentives are intended to stimulate economic activity and make up for what developers said was a “feasibility gap” they said prevented them from bringing their projects to fruition. Another four projects that could receive tax incentives are currently being considered by the City Council.
“Tax incentives can be a useful tool to help spur worthy projects and jobs. But when the City provides financial assistance to any business, it is vital that we ensure total accountability for every cent of taxpayer funds,” L.A. Controller Ron Galperin said. “It’s essential that every deal be maximally transparent and advantageous to taxpayers. That is why we need a clear roadmap to ensure consistency, fairness and value for those we serve.”
Since 2005, the report finds, the City has approved incentive agreements without a comprehensive citywide economic development strategy. Instead, policymakers have evaluated and approved financial incentives using a Block Grant Investment Fund policy, which was not originally intended to determine incentive agreement eligibility.
In the report, which can be found at lacontroller.org/incentiveagreements, the Controller’s recommendations include developing and codifying a:
Read the full report here.