The Los Angeles City Council on Wednesday approved a plan proposed by Mayor Antonio Villaraigosa to lease city owned parking garages to private companies. The plan is designed to raise funding to close a $52 million gap in city’s budget. It would effect 10 garages throughout the city, including three in Hollywood at the Hollywood and Highland Center, the Arclight Cinemas, and a small surface parking lot on Cherokee Avenue.

The garage next to the Arclight Theatre is one of several in the plan to lease parking facilities to private entities. (photo by Edwin Folven)

The mayor’s plan is to allow a 50-year lease to private companies to operate the garages. Opponents to the plan believe it would have a negative impact for businesses because parking rates would go up. The opposition was particularly strong in Hollywood, which is undergoing a revitalization.

According to a report issued by the city’s Chief Administrative Officer and the Chief Legislative Analyst, the plan would relinquish the city from having to pay the costs of operating the garages, and would bring in money from the private companies that could be used to ease the city’s deficit. The budget adopted for the 2010-11 fiscal year had anticipated that the $52 million in funding from the lease agreements would be in place before the next budget cycle. The city is currently facing a $350 million budget deficit next year.

The plan was opposed by both private entities in Hollywood and public officials, including Councilmember Tom LaBonge, 4th District, who said it would hurt the Hollywood area.

“I am not in favor. My concern is that we will sell an asset that we later regret,” LaBonge added. “The Hollywood and Highland structure, the Arclight structure and the other structures are extremely important to the local business community, and I don’t want to mess that up.”

Council President Eric Garcetti, 13th District, and Councilmember Paul Koretz, 5th District, also expressed serious reservations with the plan, but said something has to be done to address deep cuts that may result next year. According to Garcetti’s deputy, Yusef Robb, the council president has been working with constituents in Hollywood to find a solution.

“We agree with the concerns we’ve heard from the Hollywood community. Any plan that we support would have to accomplish the goal of helping address the cuts in police, fire and other services caused by the economic downturn,” Robb said in a statement. “Driving shoppers away from Hollywood businesses would negatively affect the city’s economic situation, and we understand that many of our constituents who park in these lots could not afford dramatic increases in their parking costs during these tough times.”

Koretz added that he was hoping to secure compromises that would allow for two-hour parking to remain free at some garages, and also worried about the plan’s effect on business.

“The changes to the parking plan are problematic. It will have a negative effect on business,” Koretz said. “If we do not proceed, we will be cutting city services. And laying off hundreds, if not thousands of city employees.”

Other entities in the Hollywood area that opposed the plan include the Hollywood Chamber of Commerce, which represents hundreds of businesses in the area. Leron Gubler, president and CEO of the Hollywood Camber, added that the plan would severely hinder Hollywood’s comeback.

“These parking structures need to be protected,” Gubler added. “It could set us back fifteen to twenty years. We are trying to reestablish Hollywood Boulevard as a retail street, and parking is critical for a retail area.

Other entities opposing the plan included the Hollywood Studio District Neighborhood Council. Steve Whiddon, chair of the neighborhood council, added that he is most concerned that the plan is too long term.

“Fifty years is a lifetime,” Whiddon added. “We believe it is a short term fix, and we believe it is a bad idea for Hollywood.”