Bill to Alter Cities’ Redevelopment Role Shelved

Under pressure from community groups, Assemblyman Wayne Grisham (R-Norwalk) has shelved legislation that critics contend was designed to limit the scope of a court ruling in a controversial Downey redevelopment case and weaken safeguards in state redevelopment law.

Grisham, currently campaigning for a state Senate seat, says his aim merely was to fine-tune current law. However, his bill has upset officials of a Downey citizens group, triggered opposition from homeowner groups from Hollywood to Baldwin Park and frustrated the measure’s chief sponsor, a Downey Chamber of Commerce board member who once ran for Grisham’s Assembly seat.

As a result of the dispute, Grisham last Wednesday withdrew his bill from a hearing before the Assembly Housing and Community Development Committee. “I’m not going to be doing anything that the people . . . don’t want,” he said.

Under current redevelopment law, cities must seek out people who live in a proposed redevelopment area to form an independent committee to review proposals aimed at luring new business to blighted areas and increasing property tax revenues.

A Los Angeles Superior Court judge ruled in 1985 that in forming a 616-acre redevelopment project along Firestone Boulevard, the City of Downey had “abused its discretion” by not following state law in the way it notified residents about the formation of the committee.

Grisham, at the urging of the City of Downey and the Downey Chamber of Commerce, sought passage of a bill to relax the law and allow cities to play a greater role in the formation of the project committees, changing what is supposed to be an arm’s-length relationship between cities and project area committees.

After Grisham withdrew the bill Wednesday, he cited objections raised in calls to the committee by a variety of groups, including the Baldwin Park Homeowners Group and Hollywood Boulevard Merchant’s Assn.

But Grisham said he was especially concerned about opposition voiced by Christopher Sutton, a lawyer for Downey Citizens Against Redevelopment Excesses (Downey CAREs), a 50-member citizens group which won the 1985 court case against the City of Downey. The city has appealed the decision.

Sutton said Grisham’s bill “could undercut the checks and balances of redevelopment.”

Sutton also said that if Grisham’s bill became law, Downey could bolster its court case by arguing that the Legislature had intended to give cities greater flexibility in establishing project area committees.

Bob Verderber, Downey Chamber of Commerce vice president, said the legislation had been discussed in the city for the past year and he was unaware of any opposition.

He said Downey CAREs and other groups are taking advantage of what he described as a vagueness in the law to file lawsuits and that “it’s in the interest of cities to press for clarification.”

Peter Ohanesian, a chamber board member, sought Grisham’s help in carrying the bill. In 1984, when Grisham won the Republican primary for his 63rd Assembly District seat, Ohanesian was an unsuccessful candidate for the Democratic nomination.

Ohanesian said the aim of the bill was to prevent redevelopment agencies from being the target of similar lawsuits.

Sutton would not criticize Grisham, who is campaigning in a May 12 runoff election for the 33rd District state Senate seat, which includes Downey and most of southeast Los Angeles County and northwest Orange County.

“Grisham was trying to service his constituents,” Sutton declared. “I don’t want to fault Grisham at all.”

Sutton said that Grisham “had been misled on the effects of the bill.”

Grisham said Ohanesian “had all good intentions” in seeking the legislation. Grisham said Ohanesian had told him that the bill sought to clarify redevelopment law.

But Grisham said his office was overwhelmed “all of a sudden” last week by a dozen or more complaints about the bill. He said he plans to drop the proposal if no compromise can be worked out.

Ohanesian said he was “concerned” that Grisham canceled the hearing on the bill, which was supported by the Community Redevelopment Agencies Assn. Ohanesian labeled the measure a “good-government bill” and said he believes it would have passed “on its merits.”

Ohanesian brushed aside the opposition, saying it was drawn from groups that typically oppose redevelopment.

Sutton, who represents a number of community groups, said a pending suit over Hollywood redevelopment could be affected if Grisham’s bill should become law.

Hollywood residents have filed a lawsuit charging that Los Angeles and its Community Redevelopment Agency illegally structured the Project Area Committee to favor big-business interests.

Although most of the 1,100-acre Hollywood project area is residential, the city created nine committee seats for business and warehouse owners and eight seats for homeowners and apartment tenants. The lawsuit charges that categories were established for warehousing interests and for community organizations to enable “businesses, in particular members of the Hollywood Chamber of Commerce . . . to acquire a disproportionately large . . . number of seats” on the committee.

Chamber members, who currently hold 14 of the 25 seats on the Hollywood committee, were able to draft a redevelopment plan that encourages high-density development and provides little protection for homeowners or small merchants who may be forced out of Hollywood, critics charge.

But Donald Pelegrino, community affairs director for the redevelopment agency, denied that the committee’s structure is biased toward big business. Redevelopment law requires the committee “to be representative of the community,” he said. “And in Hollywood’s case, it’s very representative.”

Times staff writer David Ferrell contributed to this story.