Downey Renewal Zone Expands, but It Lacks Condemnation Powers

DOWNEY — The City Council more than tripled the size of the city’s redevelopment district this week but bowed to public pressure and left the Redevelopment Agency without the power of eminent domain to clear the way for prospective developers in the new area.

After a public hearing that lasted nearly four hours, the City Council voted 4 to 0 Monday to expand by 305 acres Downey’s redevelopment district along Firestone Boulevard--the commercial heart of the city.

Most notable was the deletion of the power of eminent domain, a powerful tool used by redevelopment agencies to acquire land from reluctant property owners for lucrative new projects.

‘A Workable Solution’

“It’s a workable solution,” said Michael Sullivan, president of Downey CARES, a group of property owners along Firestone Boulevard who have fought redevelopment and oppose the use of eminent domain. “This means the City Council will have to deal with property owners and tenants.”

Councilman Roy L. Paul said: “I believe the community has made the message clear to us. We don’t need protracted litigation.”

Opposition to the 305-acre addition, known as Amendment 4, grew in the weeks leading up to the hearing, which was continued from June 9. Opponents said they feared that the Redevelopment Agency would use eminent domain to force them off their property.

More than 20 people testified Monday, opposing the expansion if the agency would have the power of eminent domain, while a dozen people spoke in favor of the plan. Those testifying against the addition included local residents and small businessmen. Those speaking in favor of the plan included a spokesman for Hughes/Lyon Downey, a general partnership that owns the Stonewood Shopping Center in Downey.

Agency officials met with opponents of the plan last week and worked out a compromise that led to Monday’s vote, officials said.

Although the city’s main concession was over eminent domain, the compromise also calls for maintaining a citizens advisory committee for the 30-year life of the redevelopment district. Under state law, the district was required to provide for community input for three years by setting up an advisory group, called the Project Area Committee.

The agency also agreed to control only new developments and not improvements to existing buildings in the new district, said Jim Cutts, director of community development.

The agency retains the power of eminent domain in the original 125-acre redevelopment area, which was formed in 1978.

Earlier Plan

Before voting, council members outlined their reasons for supporting Amendment 4, the agency’s substitute for a previous plan to expand Downey’s redevelopment zone. Amendment 3, the earlier proposal, was invalidated by a Superior Court decision, which has been appealed by the city.

“I was concerned about the residents on Marbel Avenue, one of the larger residential areas in Amendment 4, said Councilwoman Diane P. Boggs. “If we pull the eminent domain they can rest with a sigh of relief.”

As Amendment 4 was originally proposed, current owners of homes would have been protected from eminent domain. But the exemption would have been lost when the home change hands, and residents complained that would hurt their resale value.

But council members also noted that redevelopment projects could be delayed or foiled if, for example, a single property owner refuses to sell out and the agency lacks the power to condemn the property for a large development.

“I would be less than honest if I said I thought the project would work as well without eminent domain,” said Councilman Robert G. Cormack, who probably is the council’s strongest proponent of the use of eminent domain to further redevelopment.

Councilman James S. Santangelo, who was absent, owns property in the original 125-acre redevelopment district and has abstained from all votes on the expansion.

Cutts said he would like the agency to have the option of eminent domain but predicted that redevelopment will move forward without it.

“We feel there’s a number of projects that could be done (without using eminent domain) for some time to come,” said Cutts, who noted that Brea and Pasadena formed redevelopment project areas without eminent domain.

Blighted Area

Downey contends that the Amendment 4 area is blighted, with dilapidated buildings and land-uses contrary to zoning, and that the economic benefits of a redevelopment zone are needed to spur growth.

When a redevelopment district is created, property taxes used to support traditional government services are frozen. Additional tax revenue from the higher value of redeveloped properties is then diverted to the redevelopment agency. The agency uses that money to promote redevelopment by financing public improvements, providing developers with discounts on land prices and other incentives.

Redevelopment will bring more business and industry into the city, providing more jobs for residents and tax revenue for city services, proponents say.

Downey CARES has maintained that a good deal of development is occurring in the area and the need for government intervention--especially the use of eminent domain--is unnecessary.

The group found an ally in Los Angeles County, which stands to lose millions of dollars in tax revenue during the 30 years the expanded redevelopment area will be in existence. The county called on Downey to reduce the expansion by excluding newly developed properties and to share tax revenues the agency would reap from the new district. As an affected taxing agency, the county could sue Downey to prevent a loss of revenue.

Cutts said a tentative agreement with the county--presumably on sharing tax revenues--had been reached but no details will be released until it is finalized.

Original District

The Project Area Committee recommended that eminent domain not be an option in the new area, and that the plan be rejected.

Since Downey’s original redevelopment district was formed, the agency has condemned four properties for two redevelopment projects, officials said.

In 1984, the council approved Amendment 3, which added 380 acres to Downey’s redevelopment district. But Downey CARES sued the city and a Superior Court ruling invalidated the expansion after finding that Santangelo had a conflict of interest when he cast the deciding vote. Downey awaits a decision on its appeal.

If the city wins, Amendment 4 will be scrapped and the previous plan will be implemented, including the power of eminent domain, Cutts said.

“We won’t dump the appeal,” he said. “We don’t feel the plan (Amendment 3) should be declared invalid.”

Downey has long envied other southeast cities with more redevelopment projects. The Commerce Redevelopment Agency, for example, plans to spend more than $10 million during the 1987-88 fiscal year, while Downey’s agency has a budget of a little more than $1 million.

Amendment 4, which goes before the council for a second reading Tuesday and takes effect 30 days later, moves the city closer to its redevelopment goals. But the plan is subject to opponents filing a legal challenge for 60 days after it takes effect, and Cutts said he will not celebrate until that period passes.

In the meantime, Sullivan said he and other members of Downey CARES will carefully read the documents establishing Amendment 4 to make sure they are true to the compromise.

“We need to see what actually evolved here,” Sullivan said.

Late Wednesday night, the council was to consider forming a separate 118-acre redevelopment zone in an industrial area on the eastern edge of the city.