Architects Frank Gehry, right, and Craig Webb display a model for their Grand Avenue project, which they will unveil today. It would include residential and commercial buildings and is expected to cost about $750 million.

Phase One of the project, which is to rise on the site of the parking structure at left, was supposed to break ground as early as Decmeber 2006.

Eli Broad inspects the new design model.

Overall of the press confrence by Eli Broad, Co-chair, Grand Avenue Committee, city officials, executives from The Related Companies and architect Frank Gehry as they unveiled the design for the mixed-use development in phase one of Grand Avenue.

LOS ANGELES (By Cara Mia DiMassa and Jack Leonard, LATimes) February 14, 2007 — Despite criticism about tax breaks and land giveaways, both the Los Angeles County Board of Supervisors and the L.A. City Council gave final approvals today to a sprawling mini-city atop Bunker Hill that will alter L.A.'s skyline and set a course for future development in downtown and beyond.

City Council members described the vote as a turning point for Los Angeles, which for decades has been trying without success to establish a central cultural hub in downtown that would draw people from around the region.

"This is a historic day for Los Angeles. It changes the entire complexion of the center of our city," said philanthropist Eli Broad, who spearheaded the development.

Grand Avenue has emerged as perhaps L.A.'s most ambitious effort at creating dense high-rise developments that attempt to place housing next to rail lines, jobs, cultural attractions and shopping.

While some consider it a model for "smart growth" aimed at encouraging people to walk and take mass transit rather than drive, others see it as a tax giveaway that is not in the interests of local government. They also question whether the project would be the regional magnet its backers hope.

The developer, Related Cos., says the $2-billion project, designed by Frank O. Gehry, is financially unfeasible without the subsidies.

Early estimates put the tax rebates at $40 million over 20 years, but the legislative analyst's report estimated that the rebates could cost $66 million.

Related has spent months negotiating behind the scenes for the tax breaks, an increasingly common incentive used by cities to attract catalytic projects.

The city conducted an independent audit, which concluded that "the funding to support the project would be 'net new' revenues generated by the project itself, and that public participation is essential to make the project economically feasible."

The largest tax break would be in the 14% city hotel tax, a maximum of $60.5 million over 20 years.

Gehry designed the first phase of the project, the centerpiece of which is a translucent, glass-curtained tower rising 47 stories above his landmark Walt Disney Concert Hall.

His schematic designs call for two L-shaped towers, the 47-story structure and a 24-story building, at opposite ends of the block east of the concert hall.

The designs are for Phase 1 of an ambitious plan by Related, Broad and top city and county officials to transform a part of downtown known as a 9-to-5 office community into a vibrant place where people would live, shop and dine.

The design attempts to connect the new buildings to Disney Hall by installing a grid of light strings crisscrossing Grand Avenue, from the towers and pavilions to the hall. Also to that end, Gehry wants to repave Grand Avenue in a pattern of varying shades of stone, to create connections among the street, the buildings and the planned civic park nearby.

The taller of Gehry's buildings would be covered in a dramatic glass design. Preliminary models show either striped panels of alternating shaded glass or a pleated glass surface that looks like fabric folded around the building. The smaller building would have a more austere form, looking like a light-filled glass box.

Three shopping and dining pavilions would rise near the base of the two towers, mimicking the undulating lines and rough forms of Disney Hall but constructed of stone and glass rather than steel. Elaborate plantings of trees and other greenery on above-ground floors would create the effect of a hanging garden.

While the project has attracted mostly praise at recent public meetings, the request for tax breaks does have its detractors.

Some have argued that by granting the subsidies, the city is not getting the best possible deal for itself. Others have complained that the hotel could have an unfair advantage downtown.

From the beginning, the Grand Avenue project has been marked by a nontraditional public-private marriage. Besides the proposed tax breaks, government agencies are providing the land, investing in street improvements and subsidizing affordable housing in the project.

Related and its fiscal partners, meanwhile, are taking much of the financial risk -- particularly tenuous in a downtown real estate market that has shown signs of softening. They are also subject to a number of requirements, including the condition that all construction and permanent jobs in the development meet either "prevailing" or "living" wage requirements for the city.

Though each side bears a portion of the project's financial risk, each side also stands to profit if the development is a success. The city and county could reap substantial tax revenue from the project, far more than they receive now from the properties, which are either vacant or used as parking lots.

Construction of the first phase -- two high-rise residential towers, one with a five-star hotel, and 285,000 square feet of retail space -- is expected to start in October and be completed in June 2011.

The entire development would be built on nearly three square blocks on Bunker Hill, amounting to 10 acres. There would also be a 16-acre park stretching from the Los Angeles Music Center to the edge of City Hall.