Sale of Jordan Downs to Private Developer Planned

In a bold effort to upgrade low-income housing in Watts, the Los Angeles City Housing Authority is planning to sell the dilapidated Jordan Downs public housing project to a private developer and use the proceeds to create new rent-subsidy programs in the inner city, The Times has learned.

The proposal, the first of its kind in the nation if carried out, would convert the 700 units at Jordan Downs into a privately operated facility and provide $11 million in new improvements such as security gates, air conditioning and laundry facilities, city documents show. A private developer would also agree to maintain the 50-acre property and enforce strict leasing rules designed to prohibit gang members, criminals and drug users from residing in the project.

“To me, this is a win-win situation,” said Leila Gonzalez-Correa, executive director of the Housing Authority. “Jordan is right smack in the middle of Watts. I really believe that turning around Jordan will be the most important piece of turning around Watts. It is really right now the project that is in the worst shape.”

Gonzalez-Correa said the new program is based on the belief that the Housing Authority has failed in its mission to improve living conditions at Jordan Downs and that private industry has the resources and the capability to refurbish and clean up the decaying project and keep it that way. A gated community with on-site private supervisors, proponents say, would change the face of a project that for years has been plagued by slum conditions, drug dealing and gang violence.

The Housing Authority has paid former Los Angeles Democratic Congresswoman Yvonne Brathwaite Burke up to $200 per hour in consulting fees to lobby support among federal, state and local officials as well as community leaders. Mayor Tom Bradley is among the political leaders who support the privatization concept.

“We think it has merit if it is done right,” Deputy Mayor Mike Gage said. “The mayor has said it sounds innovative and creative, but it has to be done carefully and with a great deal of prudence.”

Many tenants at Jordan Downs have not been so receptive. They first learned of the proposal earlier this week when Housing Authority police officers distributed notices door-to-door to announce a public hearing scheduled for Friday.

“We are very upset because we did not have any idea about this,” said Lillian Browning, the tenants’ housing representative at Jordan Downs. “It was a shock. All of a sudden we get this notice that they are looking at selling it. The leaflets say we will have to relocate until they redo the place. So who’s to say we are going to get back in?”

‘Up in Arms’

Gonzalez-Correa conceded that tenants are “up in arms” over the plan. She said the Housing Authority is asking tenants to wait until the Friday meeting at Jordan Downs before passing judgment.

“I am willing to put together an agreement between every tenant and the developer and the Housing Authority to make assurances that each family is going to be able to return to the unit after the unit has been rehabilitated,” Gonzalez-Correa said. “Provided they follow the rules and pay the rent and are not involved in drugs, they will be able to stay there forever.”

The proposal, in the planning stages for nearly a year, is unique because it would enlist a private developer to pay fair market value for a public housing project, remodel 700 apartment units without any government assistance and continue to lease the units indefinitely to the same low-income, government-subsidized tenants, said William Glavin, a spokesman for the U.S. Department of Housing and Urban Development in Washington.

Private developers usually purchase low-income projects from HUD and are obligated to rent to low-income tenants for a period of five to 15 years. After that, they can offer the units at market rates or turn them into condominiums, local laws permitting. However, in the Jordan Downs proposal, the developer would purchase the project from the city Housing Authority and be committed to maintaining low-income housing as long as government subsidies remained available for tenants.

“A lot of people don’t like seeing publicly owned units sold off because, down the line, you don’t know whether they will be there for low-income tenants,” said Gordon Cavanaugh, a lawyer for the Council on Large Public Housing Authorities, a lobbying group in Washington.

Review Proposals

Councilwoman Joan Milke Flores, who represents the Watts area, said she will not take a stand until the residents at Jordan Downs are given an opportunity to review the proposal.

“A lot of work has to be done at Jordan Downs,” Flores said. “There has not been the money to do it. The amount of money that the Housing Authority gets from HUD just barely covers maintenance.”

HUD officials must approve the sale of Jordan Downs. So far, they have reacted favorably to the plan.

“It’s an innovative concept,” said J. Michael Dorsey, HUD’s general counsel. “I think it is a good idea. If you have property that a Housing Authority is having problems with and there are private owners who can operate it in an efficient manner and provide decent housing to tenants, it’s obviously a benefit.”

A five-page summary of the plan obtained by The Times states that “the needs of the project are greater than the Housing Authority’s resources.” The property would be offered for sale on the open market along with requirements that developers refurbish the 700 units at a cost of about $16,000 each, pay for the tenants’ relocation expenses and lease back units to all residents as long as they abide by leasing conditions.

The proceeds from the sale--estimated at $10 million by Gonzalez-Correa--would be used to meet the housing needs of low-income residents outside of Jordan Downs. This would include improving units in other housing projects and establishing a rent-subsidy program run by the Housing Authority.

The Housing Authority plans to ask for competitive bids to attract prospective developers.

To qualify for public housing projects, a family of four must earn less than $23,050 a year. Once residents are placed in a housing project, they are required to pay 30% of their income in rent.

The privatization proposal was made possible by recent federal legislation that set aside for housing projects a certain number of rent-subsidy certificates that would normally go to low-income families living in private apartments. HUD recently allocated 700 of these certificates to Los Angeles for tenants residing in the city’s housing projects. These certificates will make it possible for developers to borrow money privately for the purchase and renovation of Jordan Downs, said Gary Squier, the mayor’s housing coordinator.

“We’re looking for a proven track record on the part of a buyer for managing housing that is difficult to manage . . . and an expressed desire to maintain the affordability of the units for a long period of time,” Squier said. “The concept is that smaller, private-sector development entities can be more responsive than a large Housing Authority bureaucracy to the specific needs and circumstances of a project such as Jordan Downs.”

But it remains to be seen how enthusiastically private developers will respond to the opportunity to take over the troubled housing project.

Built in 1955, Jordan Downs consists of 103 buildings, a 4,000-square-foot community center, four maintenance garages and 10 playground areas. Most of the 700 frame-and-stucco apartment units, located on Grape Street between 97th and 103rd streets in Watts, are decaying and in need of repair.

Slum Conditions

Last year, the City Council voted to lend the Housing Authority $818,000 to repair slum conditions at Jordan Downs after several council members threatened to back a measure allowing tenants to refuse to pay rent.

At Jordan Downs, where only one member of every seven families has a job, according to city records, residents said Wednesday that no matter who is in charge, modernization plans that focus on fixing buildings and streets will fail unless the project’s human problems are addressed.

Tracy Henderson, 30, said Jordan’s problems “are not the buildings, but the people who turn these places into animal cages. I want much tougher rules for tenants and I want the drug selling to stop. How is some company going to do that, I’d like to know?”

She pointed to a huge open field, filled with litter, that separates two streets within the project and said wistfully, “That space could be a child-care center right there, but it’s not.”

Warren Gilmore, 39, a Vietnam veteran who has lived at Jordan Downs for most of his life, said the Housing Authority is widely disliked because the agency has failed to clear out the tenants who openly deal drugs and run in gangs.

Although he fears that a private corporation will have even less interest in the tenants, Gilmore said that residents are suspicious of the Housing Authority because it has spent millions of dollars modernizing the equally troubled Nickerson Gardens, the city’s largest housing project located a few blocks away.

“We look over at Nickerson Gardens (housing project), where they are getting new kitchens and bathrooms while we get almost nothing but some new paint,” Gilmore said. “It looks like we are getting shafted, and now we’re getting sold.”

Times staff writer Frank Clifford contributed to this article.