Renewal Agency OKs 51% Hike in Budget
Reflecting a sharply stepped-up level of renewal activity, the Los Angeles Community Redevelopment Agency commission on Monday approved a whopping 51% increase in its 1986-87 budget.
Most of the increase in the $244-million budget is for three high-profile redevelopment programs--the rehabilitation and expansion of the Central Library, the expansion of the downtown Convention Center and the overhaul of the Crenshaw District shopping center.
In addition, the agency’s debt service payments on bonds has jumped sharply to $37.8 million, a 35% increase over the current fiscal year, which ends June 30. The increase is due to approval of an unusually large block of bonds last year by the commission, which feared that pending changes in federal tax laws covering tax-exempt city bonds would restrict the agency’s future ability to raise funds.
Large Bond Issues
In all, $287.5 million in bonds were issued last year--well over twice the total amount the agency had outstanding at the end of the 1984-85 fiscal year. The CRA pays off the bonds with the increases in property tax revenue generated by redevelopment projects.
Donald Cosgrove, acting agency administrator, said the three new redevelopment efforts responsible for the budget increases are “big projects that represent big bucks.” For example, the $310-million expansion of the Convention Center approved by Mayor Tom Bradley and the City Council in November would more than double the facility’s permanent exhibition space.
As part of the deal, the agency has agreed to spend $39 million acquiring property for the expansion and for relocating tenants. Of next years’s budget increase, $28 million will go toward that project.
Another $20-million increase is budgeted for property acquisition and tenant relocation in connection with redevelopment of the Crenshaw Shopping Center, which was Los Angeles’ first suburban shopping center. The deteriorated center, a hub of commerce in the city’s middle-class black community, is to be transformed into a modern $100-million shopping mall under a joint agreement between the CRA and private developers.
Design work and preliminary relocation of utilities for the $1-billion Central Library renovation and office development project in the heart of the financial district will require $15 million.
Cosgrove said the huge increase in spending is not “indicative of a continuing wave of activity” and that the budget should decline in fiscal year 1987-88. “We don’t normally go out and buy $39 million worth of property,” he said.
But the burst of activity on projects does highlight some long-term financial issues for the agency. For example, in the Central Business District redevelopment area, which covers most of downtown and is the agency’s largest, there is a legal cap of $750 million on total expenditures. To complete all the projects that the agency currently plans in that area would cost about $500 million.
Cosgrove told the commission it needs to review what the priorities are for the remaining funds available and how it might stretch those dollars.
Overall, the budget approved by the commission anticipates $390 million in revenues for the coming fiscal year--about $146 million more than will be expended. However, the difference is committed to multiyear projects and will be carried over into the next fiscal year, officials said.