Hollywood Secession Called Harmful to City

The proposed breakaway city of Hollywood would be fiscally unstable, provide less service to its residents and harm the remainder of Los Angeles, according to reports released Friday by city officials.

The Los Angeles City Council voted unanimously to send the documents to the Local Agency Formation Commission in hopes of persuading the agency to vote against putting Hollywood secession on the November ballot.

“I can’t understate our concerns,” said City Administrative Officer William Fujioka.

“The new city would survive only if the city of Los Angeles loans the city money and if the Hollywood city makes service cuts.”

Secession advocates, however, said the move is a last-ditch attempt to stop voters from deciding Hollywood’s fate.

“It’s a little voodoo economics, a little Enron economics--anything to try to justify their position,” said Gene La Pietra, president of Hollywood VOTE.

“It’s clear as a bell to any professional that Hollywood generates more than enough revenue to provide services at a higher level than we’re currently getting from the city of Los Angeles.”

Earlier this week, LAFCO’s executive officer said the proposed city of 160,000 would be financially viable, and commissioners said the panel was likely to decide in favor of a Hollywood vote.

On Wednesday, LAFCO will decide whether to give voters the opportunity to make Hollywood an independent city.

If the proposal is placed on the ballot, it must capture a majority of voters in the breakaway area and a majority citywide.

City officials said they didn’t have time to thoroughly respond to the LAFCO recommendation because it was released Tuesday, and they needed to submit responses to LAFCO on Friday.

Still, Fujioka said the proposal is inherently flawed.

Under the plan, Los Angeles would lend the new city $10 million and Hollywood would cut public services by $10 million. This proves that the city is not financially viable, he said.

Additionally, the city’s reserve would be too small--0.53% of its revenue. In contrast, Los Angeles’ reserve is 5.3%, the reports say.

The documents also say the city of Los Angeles would be harmed if the 15-square-mile Hollywood area is carved out.

Payments to compensate Los Angeles for lost revenue, which would start at $21.3 million the first year, are a fraction of what they ought to be, the reports say.

Additionally, some of Los Angeles’ assets--most notably the famed Hollywood sign--would become part of the new city.

“The city of Los Angeles has not consented to that,” said Fred Merkin, assistant city attorney.

“No compensation has been offered to the city. We believe that would be unconstitutional.”

Council members voiced concerns that a number of issues have not yet been addressed, including traffic impacts on surrounding communities and funding for major seismic upgrades for four hospitals in the new city’s boundaries.

“The City Council of Los Angeles has a responsibility to all the citizens of the city to make sure that all the facts are on the table,” said Councilman Tom LaBonge, who represents much of Hollywood.

“The dismemberment of Los Angeles is a bad idea.”

But La Pietra said it’s time for Hollywood residents to vote on the issue.

“One hundred years of neglect can’t be swept under the rug any longer,” he said.

In a related development Friday, LAFCO Executive Director Larry Calemine said removing two disputed areas from the proposed Hollywood boundaries would not hurt the new city’s finances.

But he said a third area should not be removed because its loss would be significant.

The two areas that Calemine said would have little impact, if removed, are a section of Griffith Park near the Hollywood sign and a neighborhood of about 630 residents west of Western Avenue and north of Franklin Avenue.

A small group of residents from the Western-Franklin area, which includes Laughlin Park, has asked LAFCO to remove it from the proposed city, saying the neighborhood is in Los Feliz, not Hollywood.

The third area, home to about 3,290, borders Romaine Street and Willoughby Avenue on the north, Melrose Avenue on the south, La Brea Avenue on the east and Fairfax Avenue on the west.

Calemine said excluding that area would shrink the new city’s revenues by $3 million.

LAFCO will take up the border recommendations at 9 a.m. Wednesday in the Board of Supervisors hearing room at the county Hall of Administration, 500 W. Temple St.

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Times staff writer Nita Lelyveld contributed to this report.