LOS ANGELES -- Tax-exempt financing will pave the way for a parking garage to be built under the $220 million Walt Disney Concert Hall in downtown Los Angeles, county officials said.
The Los Angeles County Board of Supervisors has approved construction of the building, the parking garage, and the tax-exempt financing. This approval follows nearly four years of negotiations since Mr. Disney's widow, Lillian B. Disney, contributed $50 million for the 2,400-seat hall.
The building will be constructed on county-owned land in downtown Los Angeles, across from the Los Angeles County Music Center. The Walt Disney Concert Hall is expected to house the Los Angeles Philharmonic.
Under the county-Disney agreement, the county will pay for the 2,500-space underground parking structure and Disney will finance the hall. The county expects to sell as much as $117 million of lease-backed certificates of participation early next year to pay for the garage.
Tax-exempt financing can be used for the parking garage because the county owns and operates the structure and it is available to the general public, according to Julia E. Silva, a lawyer with Ochoa & Sillas.
Parking fees are expected to fund debt service which could be structured so payments escalate as parking revenues increase, said Sharon N. Yonashiro, director of finance for the county treasurer's office.
"At this point, we don't know if there'll be any bells and whistles" on the financing, Ms. Yonashiro said. "We're very pleased with the board's approval."
A prelimary official statement is being prepared, and Ms. Yonashiro said the county may look into the benefits of insurance for the financing. The board picked First Boston Corp. as senior underwriter and O'Melveny & Myers and Ochoa & Sillas to provide bond counsel work.
"This is a fun financing to work on," said Marie Martineau, special counsel at O'Melveny in Los Angeles. "It's been interesting trying to explain to Disney how COP financing works."
The music hall and garage are being designed by Santa Monica based architect Frank O. Gehry & Associates.
The agreement also stipulates that the county will receive title to the concert hall after it is completed by Disney. The county last week approved a master lease agreement that names Disney as the master developer of the concert hall project.
The entire county-Disney music center project is estimated at $220 million. The board approved up to $117 million in certificates for the $81 million parking garage to pay for other project costs plus interest during construction. Los Angeles County Treasurer and Tax Collector Sandra Davis said the excess funds are needed to provide flexibility in reacting to possible fluctuations in financial market conditions between now and the time the certificates are issued.
While the county board approved and certified the final environmental impact report for the financing on Feb. 6, 1991, there is a pending court challenge. According to a document prepared by the county, this lawsuit does not keep the county from proceeding with the garage financing.
