L.A. officials weigh exclusive deal with Italian rail firm

L.A. officials weigh exclusive deal with Italian rail firm - Los Angeles Times

L.A. officials weigh exclusive deal with Italian rail firm

A redevelopment agency vote today could set the stage for AnsaldoBreda to build a manufacturing plant in downtown L.A.'s future green corridor.
By Maeve Reston

May 21, 2009

Los Angeles redevelopment officials are drawing closer to an agreement with an Italian rail car company that hopes to build a manufacturing plant on a prized city site east of downtown.

The company, AnsaldoBreda, is angling for a $300-million contract with the Los Angeles County Metropolitan Transportation Authority to build 100 light-rail cars, some of which would be used for the expansion of Metro's Gold and Expo lines.

The company proposed the Los Angeles-based plant and a corporate headquarters earlier this year, when it learned that MTA staff had criticized the firm's performance on a previous 50-car contract. By creating up to 650 full-time jobs in Los Angeles, AnsaldoBreda hopes to improve its odds of securing the new contract.

The city's Community Redevelopment Agency board, whose members are appointed by Mayor Antonio Villaraigosa, is slated to vote today to authorize an exclusive agreement that would set the stage for AnsaldoBreda to build on a parcel near 15th Street and Santa Fe Avenue in the city's industrial core.

The mayor hopes the city-owned site could serve as southern anchor for a green corridor that would attract clean technology companies to Los Angeles.

As the city struggles with 12% unemployment, approval from the redevelopment board could increase pressure on members of the MTA board to agree to the 100-car deal with AnsaldoBreda as early as next week's meeting.

In March, the MTA's former chief executive, Roger Snoble, advised the board to seek bids from other rail companies for the 100 cars, because AnsaldoBreda's cars had arrived late and 5,000 to 6,000 pounds overweight, he said.

With the backing of the Los Angeles County Federation of Labor, Villaraigosa, the MTA board chairman and a board ally successfully brokered a two-month reprieve to give the MTA's incoming chief executive time to review the rail company's performance.

AnsaldoBreda officials have said MTA's problems with the initial 50 cars stem from changes requested by the agency.

Officials at the Community Redevelopment Agency have stressed that an agreement with AnsaldoBreda hinges entirely on the MTA's decision.

The exclusive agreement under discussion sets out a 50-year lease with AnsaldoBreda for 14 acres of the 20-acre site -- allowing the city to pursue additional tenants.

Redevelopment officials are also seeking a series of guarantees from AnsaldoBreda to ensure that the company follows through with its promise to build an environmentally friendly plant on the site, a formerly contaminated parcel that the city purchased from the state in 2008 for $14 million.

AnsaldoBreda, which would be eligible for sizable state and federal tax breaks in that industrial zone, would agree to pay $906,000 in rent annually to the city, and would make a nonrefundable rent payment of $15.1 million up front, allowing officials to pay off the loan they got to purchase the property.

City officials said the company could face $35 million in penalties if it did not complete the project.

maeve.reston@latimes.com