Waste of the Day: Throwback Thursday – Grant Pays for Office Space

Topline: The City of Los Angeles received a $1 million federal grant to help its homeless and low-income populations in 2011, but the city probably could have found a more effective way to use the money. It awarded the grant to the wealthy architecture firm Gensler to create what LA Weekly called “a hip, new atmosphere” in their downtown office building, which the city justified by saying it would create temporary construction jobs for the unemployed. The money would be worth $1.4 million today.

Los Angeles used a million-dollar grant – to renovate office space?

That’s according to the “Wastebook” reporting published by the late U.S. Senator Dr. Tom Coburn. For years, these reports shined a white-hot spotlight on federal frauds and taxpayer abuses. 

Coburn, the legendary U.S. Senator from Oklahoma, earned the nickname “Dr. No” by stopping thousands of pork barrel projects using the Senate rules. Projects that he couldn’t stop, Coburn included in his oversight reports.

Coburn’s Wastebook 2011 included 100 examples of outrageous spending worth nearly $7 billion, including the handout to Gensler, an international firm with 36 offices worldwide.

Key facts: The funding came from a federal Community Development Block Grant sent to L.A. by the Department of Housing and Urban Development, which funds anti-poverty programs like affordable housing and clean drinking water. 

Gensler’s office building was in Santa Monica, but the grant helped lure them to L.A., where they took over the three-story “Jewel Box” building in the City National Plaza skyscraper complex.

LA Weekly reported, “According to city documents, Gensler has agreed to a modest, and very vague, payback: In return for the $1 million in renovation funds, it will hire an unspecified number of temporary, low- to moderate-income workers to do the job.” The federal government later stipulated that Gensler must create 29 jobs during its relocation, and at least 15 must be low-income workers.

The architects were rich enough without such a contract

It’s unclear why Gensler needed the handout. The company had $480 million in revenue in 2010 and had recently been selected to build an NFL stadium in L.A. (The stadium proposal was later scrapped, but city officials could not have known that at the time.)

In 2023, the Department of Housing and Urban Development gave Gensler $858,000 to study ways to convert office space into affordable housing. Maybe that would have been at least slightly less necessary if L.A. had spent its grant from 2011 on affordable housing instead of luxury office space.

Search all federal, state and local salaries and vendor spending with the world’s largest government spending database at OpenTheBooks.com. 

Critical quote: One former Housing and Urban Development official told LA Weekly,

There‘s no way, shape or form that the money should be going to a multinational corporation. The city is really pushing the envelope on this.

Summary: Accountability issues are still present in L.A.’s homelessness spending today, affecting far more than just one federal grant. The city and county spent $2.3 billion last year on a program that has clearly had problems for years.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.

This article was originally published by RealClearInvestigations and made available via RealClearWire.