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.

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