Labor and business leaders declared victory Tuesday night over a bitterly contested ballot measure that would have imposed new restrictions on building apartment towers, shops and offices in Los Angeles.

As of midnight, returns showed Measure S going down to defeat by a 2-1 margin, with more than half of precincts reporting.

“Defeating Measure S has spared our city from a future that would’ve meant fewer jobs, fewer funds for critical public services, fewer new homes for those who desperately need them, and even less affordable rents,” said Rusty Hicks, executive secretary-treasurer of the Los Angeles County Federation of Labor.

The Yes on S campaign said it had already prodded the city toward key reforms, but faced stiff opposition from powerful interests at City Hall. “We were up against the establishment,” campaign spokeswoman Ileana Wachtel said. “It’s tough to fight the status quo and it’s tough to fight really wealthy developers.”


Neighborhood activists had championed Measure S as a way to reform a broken planning process at City Hall, arguing that it would prevent out-of-scale projects that ramp up traffic and fuel gentrification.

But opponents — including labor unions, business groups and Mayor Eric Garcetti — warned it could eliminate jobs and exacerbate the housing crisis, throwing the city into economic turmoil.

The divisive campaign doubled as a referendum on urbanist dreams of a denser, taller Los Angeles, bemoaned by critics as the “Manhattanization” of L.A.

More than $13 million was poured into the fight, funding billboards, television ads and an avalanche of campaign mailers.


The Yes on S campaign raised more than $5 million — about 99% of which came from the nonprofit AIDS Healthcare Foundation — to promote the ballot measure.

It was outspent by real estate developers, labor unions and other opponents who shelled out more than $8 million to try to stop it, including more than $3 million from a development company at odds with the AIDS Healthcare Foundation over a Hollywood project.

AIDS Healthcare Foundation executive Michael Weinstein said Tuesday that the Yes on S campaign was the opening gambit on a larger fight against the entrenched powers in L.A. — wealthy developers and City Hall.

“This campaign will go down in the record books as one of the most successful campaigns that did not actually win the vote,” Weinstein said.


As the battle over Measure S raged this year, local lawmakers hustled to speed up updates to community plans that guide neighborhood development. Garcetti pledged last fall that he would ban private meetings between developers and planning commissioners, part of an attempt to persuade Weinstein to abandon the controversial ballot measure.

“We are going to hold City Hall’s feet to the fire on these issues,” Weinstein said.

Measure S targeted the long-standing practice of changing city rules to permit buildings that are taller or denser than the established restrictions would ordinarily allow.

It would have imposed a moratorium lasting up to two years on building projects that require zone changes and other alterations in city rules. It also targeted the controversial practice of “spot zoning” by barring Los Angeles officials from amending the General Plan — a document that governs development across the city — to make way for individual projects in areas they would otherwise be banned.


But the campaign was hardly a dry debate between planning wonks.

At news conferences and rallies, the Yes on S campaign railed against City Hall corruption, the eviction of poor tenants, rising homelessness and the health threats to children living along freeways.

Campaign director Jill Stewart argued that the city has been deviled by a “pay-to-play” culture in which politicians agree to rewrite zoning rules for real estate developers who sink money into their campaigns.

“When people like me bought their home they didn’t think there would be a skyscraper next door to them ... because zoning was supposed to protect them,” said Carole Miller, a Mid-Wilshire homeowner who supported the ballot measure. “City Council has been taking all this money from developers and everybody knows it.”


Opponents accused the campaign of deceptive and irresponsible tactics, frequently complaining that it was assailing problems that the ballot measure would do little to stop.

For instance, when the Yes on S campaign staged a news conference with veterans and sent out mailers that urged, “House Our Vets,” its critics said it would do nothing to help homeless veterans.

Garcetti, a staunch opponent of the measure, lamented that the Yes on S campaign had nonetheless plastered his smiling face on its mailers. And the Sheriff’s Department demanded that it stop sending out campaign mailers that mimicked eviction notices, saying they were misleading and illegal.

Much of the debate revolved around whether Measure S would help or hurt tenants as rents continue to soar. Backers of the ballot measure argued that it would combat luxury towers that were displacing longtime renters.


Opponents countered it would squelch housing production and accelerate evictions by blocking development on land that isn’t zoned for housing.

The election results “seem to indicate that people understood the devastating impact that Measure S would have on our community if it passed,” said Gary Toebben, president of the Los Angeles Area Chamber of Commerce

Los Angeles voters also weighed in Tuesday on how to regulate marijuana: A ballot measure that would allow Los Angeles to tax and license commercial cannabis shops was leading by a hefty margin Tuesday night. A competing measure that was later abandoned by its proponents was trailing.

Another local measure that would allow longer leases for property at the Port of Los Angeles, championed by City Councilman Joe Buscaino as a way to help revitalize the waterfront, also appeared headed for victory.


emily.alpert@latimes.com

Twitter: @LATimesEmily

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UPDATES:

12:35 a.m.: This article was updated with late results.


11:30 p.m.: This article was updated with later returns and reaction.

10:45 p.m.: This article was updated with later returns and additional reaction.

9:35 p.m.: This article was updated with additional reaction.

8:35 p.m.: This article was updated with the first batch of returns.


This article was first posted at 6:30 p.m.