City to Give Capitol Records $4 Mil to Stay in Town

LOS ANGELES-Capitol Records Inc. will receive $4 million of taxpayer money in a development deal that the Los Angeles City Council just barely passed, with a vote of 8 to 4.

The deal will keep Capitol Records in Hollywood, but the firm will have to spend more than $20 million in renovations to its landmark building. The additional $4 million from the city will be used to aid firm in renovating a nearby office tower, as well as adding employees to its current workforce.

The council’s approval was accompanied by a request for an investigation of the city’s purchase of an adjacent parking lot, which was originally appraised for half the amount the city paid for it. The Community Redevelopment Agency bought the lot for $1.45 million in 1998, despite an appraisal that placed its value at $795,000. Apparently, an agency administrator ordered a second appraisal that justified the $1.45 million payment, but it was not completed until after the board had already voted to buy the parcel at the higher sum.Capitol Records will purchase the lot for the full amount the city paid for it.