CRA, Bowing to Pressure, to Help Construct School

Times Staff Writer

Feeling the heat of a new source of community pressure, the Los Angeles Community Redevelopment Agency on Monday agreed to pay the school system $6.5 million to help build a new elementary school and to pursue other deals that could generate tens of millions of dollars for new classrooms.

The agreement, following months of negotiations, is the first of its kind between the two agencies--and school officials are hopeful it will serve as a major source of funds to reduce campus overcrowding.

"I'm excited," said Eastside school board member Larry Gonzalez, who has led efforts to build additional classrooms and initiated bargaining talks with the CRA. "This will go a long way toward construction of badly needed facilities, particularly in inner-city areas where redevelopment activity will play a major role in coming years."

The most immediate effect of the agreement, which will be finalized into contracts in the coming months, is to head off a potentially messy political and legal fight between the agencies that threatened to stall the CRA's proposed 1,100-acre Hollywood Redevelopment Project.

The City Council begins hearings on the Hollywood redevelopment plan Wednesday and school district officials, arguing that redevelopment activities worsen school crowding problems, had threatened to sue to block the project if the CRA did not help expand school facilities.

Some CRA officials had been critical of the school district's demands. "I think everybody was worried that it would get out of hand," said CRA Commission Chairman Jim Wood. But Wood said some of the school district's complaints were "perfectly legitimate."

"Our feeling is it has been resolved and we now have a better relationship with the school district," Wood said.

While the Hollywood project provided the school district with its bargaining leverage, the agreement covers other areas of the city with school crowding problems, including the Central City.

Specifically, the eight-page agreement calls for the CRA to:

--Pay $6.5 million to the district over the next five years for rehabilitation and additions to schools. School officials said the money would go toward construction of a new $11-million elementary school in Hollywood.

--Explore the purchase and redevelopment of a small, overcrowded Hollywood elementary school. The deal could net the school district $6 million.

--Pay the district 2% of the CRA's property tax income from the Hollywood Redevelopment Project, estimated at $5 million over the life of the project. That amount would increase to 5% after the 18th year of the project.

--Construct within five years a major addition to the 9th Street School in downtown Los Angeles. The expansion, which school officials estimate will cost $8 million, would include eight new classrooms, a cafeteria, children's center and office.

--Pay $250,000 toward construction of four additional classrooms at Castelar Elementary School in Chinatown.

--Explore means to finance a new $15-million elementary school on the west side of downtown.

--Give property in the Highland Park area to the school district that could be used for a new school. School officials estimate the land value at $500,000.

In addition, the agreement calls for the school district and the CRA to work together on a variety of joint development projects. In those instances, the CRA would help arrange for the development of surplus school property, which would generate additional revenues for the district. One such property would be part of the Adams Junior High School site south of downtown Los Angeles.

The agreement is the outgrowth of a statewide trend among school districts to threaten litigation and use political pressure to force redevelopment agencies to help finance new facilities. Redevelopment officials have complained about the practice, though they acknowledge that state law permits them to share tax revenues with schools.

Though the first such deals were made after Proposition 13 applied the money squeeze on public schools in 1978, the Los Angeles district began pursuing the strategy only last year as enrollment projections showed that the district would gain more than 50,000 students by 1990.

The agreement with the Los Angeles CRA comes on the heels of a smaller agreement with the City of Bell's redevelopment agency that will provide $11 million over the next 40 years for school improvements in that area of the district.

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