MTA Delays $1-Million Loan to Developer, Asks Concession

A controversial $1-million loan from the county Metropolitan Transportation Authority to a Wilshire district developer has hit a last-minute snag, officials said Wednesday.

Although the MTA’s board already approved the loan, county lawyers on Wednesday belatedly sought a concession from developer Wayne Ratkovich before they would issue the $1-million check.

The county lawyers demanded that Ratkovich agree not to sue the MTA for any building damage or financial losses caused by expansion of the Red Line subway. “That’s a part of what’s being negotiated,” said MTA spokeswoman Stephanie Brady.

A partnership headed by Ratkovich owns the Wiltern Theatre and an adjoining office and retail complex at Wilshire Boulevard and Western Avenue. An aide to Ratkovich said she could not comment other than to say that the MTA’s demand was in the hands of the partnership’s lawyers.

It was in response to Ratkovich’s threat to file a lawsuit that transit commissioners on June 16 voted in a closed session to approve separate loans of $300,000 and $1 million. The $300,000 loan, unsecured by collateral, has already been issued. Both loans were approved at an interest rate of 5.25%.

The MTA’s unusual handling of the loans--including the failure of county lawyers to gain a pledge from Ratkovich not to sue--was reported Wednesday by The Times.

Ratkovich last fall helped persuade transit officials to establish a low-interest loan program by January for businesses such as his that have been hurt by the disruption caused by subway construction.

To the chagrin of Ratkovich, the loan program was not organized until spring.

On June 11, East-West Federal Bank of San Marino advised the MTA that it would not make a $1-million loan to Ratkovich under the fledgling program. A bank executive noted that the property offered as collateral was already securing two other loans, totaling $15 million.

After Ratkovich then threatened to sue the MTA, commissioners voted last month to make $1.3 million in loans directly to his partnerships. Los Angeles City Councilman Richard Alatorre, chairman of the MTA, said he favored the loans because he had faith in Ratkovich and because county lawyers advised that the developer had grounds to sue. The commission approved the loans 9-0, with four abstentions.

L. A. (Kim) Kimball, the MTA’s deputy chief executive officer, said Tuesday that he expected a check for $1 million to be issued to Ratkovich any day. But on Wednesday, the MTA’s Brady said it was unknown when the $1 million might be released.

Brady also said 10 other applications have been received from business or property owners seeking low-interest loans. Brady said that Kimball had been incorrect in saying earlier that no other applications were submitted.