By Lookout Staff

August 24, 2010 -- After flirting with building a contemporary art museum in Santa Monica to showcase their coveted collection, billionaire developer Eli Broad and his wife Edythe announced Monday that they has chosen Los Angeles.

Broad -- who had narrowed his choices to LA, Santa Monica and Beverly Hills -- picked a site in the stalled Grand Avenue project near Arata Isozaki's Museum of Contemporary Art and Frank Gehry's Walt Disney Concert Hall.

Broad had been considering locating the museum on a 2.5-acre City-owned property on Main Street between the County Courthouse and the Civic Auditorium. Under a proposal approved by the City Council in March, the Broad Foundations would have leased the site for $1 per year on a 99-year lease.

The City also would have put up $1 million toward the design of the museum. Additionally, Santa Monica would have absorbed all fees associated with permitting, which City staff estimated would cost $900,000, and pay an estimated $750,000 to prepare the site for development.

Under the deal struck with the City of LA, Broad will pay $7.7 million to lease the land and will provide an additional $200 million to endow the Broad Art Foundation. They funds will cover the ongoing expenses of operating the museum.

Broad chose the prominent New York firm Diller Scofidio + Renfro to design the 120,000-square-foot museum that is expected to add to the arts renaissance sweeping Downtown LA. The projected cost is between $80 million to $100 million.

Although the council voted to keep Santa Monica in the competition for a museum, some council members had problems with the details of the agreement.

Council member Bobby Shriver, who cast the only dissenting vote, was critical of the concept since it was first introduced to the council last November.

“He’s a smart deal guy,” Shriver said of Eli Broad. “You don’t build these companies by not being a smart deal guy. And he’s trying to make a smart deal here. All I have ever said is we should make a smart deal too."