$51-Million Plan to Save Crenshaw Center Is Revived

Beating a deadline by only hours, Los Angeles city officials on Monday announced revival of a $51-million financing package to save the fading Crenshaw shopping center, the only big regional shopping facility in the predominantly black Southwestern part of the city.

Mayor Tom Bradley, City Council President Pat Russell and other officials held a news conference in front of the Broadway, a major store in the center, to announce arrangements to sell $30 million in industrial development bonds to finance a parking structure as part of the proposed remodeling of the center.

Later in the day, David Lewis, project manager for the Los Angeles Community Redevelopment Agency, said the bonds had been sold. But before the money can be used, the Internal Revenue Service must decide whether the bonds would be tax exempt.

A city official, who declined to be named, said that if exemption is not granted, the money would be refunded to investors, who buy such bonds because they are tax exempt.

The bond funds would be added to $15 million in various redevelopment funds held by the Community Redevelopment Agency and $6 million from the city’s share of federal block grant aid.

If the deal had not been put together by midnight, the bonds could not have been sold. Beginning today, new federal tax laws limit the number of industrial development bonds that can be sold in each state and place so many other restrictions on their use that it would have been difficult to use them for the project, officials said.

The industrial development bond fund would make up for denial of a $12-million federal grant in October, a development that one city official had called a “crushing blow” for the project.

“It will save the first regional shopping center to be built in the nation,” Bradley said after announcing approval for the bond sale. The center, bounded by Crenshaw Boulevard, Stocker Street and Martin Luther King Jr. Boulevard, was a retailing pioneer when it opened in 1947.

It had two major department stores, the Broadway and May Co., across the street from each other and sharing parking. Restaurants and specialty stores reached out from the two main stores, providing one-stop shopping, with parking, for a city that was jumping into the post-World War II auto age. The Crenshaw neighborhood, and the hills above it, were affluent and mostly white.

As years passed, the racial makeup of Crenshaw and the hill subdivisions changed to predominantly black. Residents of the older single-family homes near the center and the hillside subdivisions of Baldwin Hills, Windsor Hills and Ladera Heights ranged from middle class to wealthy. But sprawling, low-rent apartment houses, with poorer families and high delinquency rates, were built close to the center.

City officials said crime increased at the center and merchants, tired of it, began stocking lower-cost goods. The more affluent took their business to newer and more stylish shopping areas in Fox Hills, Beverly Hills and elsewhere. About half the 33 stores in the center are now under-used, a city study reported.

Plans for Renewal

If the current financial arrangement goes through, the Community Redevelopment Agency will acquire the property from current owners. This is usually done through negotiation or through the power of eminent domain. The agency would work with developer Alexander Hagen in a rejuvenation plan that tentatively includes construction of a covered mall, improvement of the May Co. and Broadway stores and the addition of a third major store, officials said. The center is now called the Baldwin Hills Shopping Center.

The city is now awaiting the IRS ruling on tax exemption.

Such bonds must serve “a public purpose” for them to be tax exempt. Among public purposes are pollution control facilities, sports stadiums and industrial parks, according to the Public Securities Assn., an organization involved in bond financing of public facilities.

Councilwoman Russell and other city officials said that the IRS staff had taken a “neutral” position in a memorandum on whether tax exempt status should be given. Robert Hardesty of the Hagen development firm said he is confident the IRS will grant such status.