Fund Cutoff Kept Quiet While Project Sale Was Pursued

Federal housing officials have revoked $5 million in long-awaited modernization funds earmarked for the dilapidated Jordan Downs housing project in Watts after being told of the city’s plan to sell the project, The Times has learned.

Housing Authority and top city officials learned of the decision by the federal Department of Housing and Urban Development last fall, but apparently did not inform tenants and other city officials.

Charles F. Elsesser, a Los Angeles Legal Aid Foundation attorney who discovered the decision in documents obtained through the Freedom of Information Act, on Tuesday called the loss of funds “just outrageous.” Housing officials did not inform City Councilwoman Joan Milke Flores, who represents the Watts area, about the step, an aide said.

“We were under the impression some of the money was already being spent,” said Karen Constine, an aide to Flores.

Claudia Moore, a tenant leader who has repeatedly criticized the Housing Authority’s executive director for making unkept promises to fix Jordan Downs, called the news “a terrible shock to us, and proof of what we have been trying to tell the mayor all along--that Leila Gonzalez-Correa gives us nothing but promises. We believed change was on the way.”

Housing experts estimated that the loss of federal funds will delay by three to five years any major renovations of the broken down kitchens, bathrooms, walls and floors at the 700-unit 35-year-old project.

Center of Controversy

Gonzalez-Correa, executive director of the Housing Authority, who has been under fire recently for improperly steering contracts to personal acquaintances and to backers of Mayor Tom Bradley, did not return phone calls from The Times.

However, Deputy Mayor Mike Gage said Bradley was brought into the discussion last year over whether to risk losing the $5 million by proposing the project’s sale. He said the mayor and housing officials “chose to forgo the nickel today for the dollar tomorrow. . . . We would love to have had both, of course.”

Gage said it was possible that Flores’ office was not involved in the decision, but conceded, “I don’t know why residents weren’t told. . . . The way people have been notified and alerted to things could have been better, and we are trying to work with the Housing Authority to ensure that people feel they are participating.”

Although Housing Authority officials have quietly been working for a year on the plan to sell the project to a private developer, tenants were informed only two weeks ago.

Most tenants strongly oppose the unusual plan to sell the project to a private developer, who would be required to spend $14 million to modernize the structures, plus millions more for social programs.

The owner would receive federal subsidies to operate the project. The city has estimated the sale itself would bring in $10 million that could be used to build or renovate other low-cost housing in the city.

But housing experts around the country said plans to sell the project--along with the loss of the $5 million--will substantially delay any major improvements. “Under the best conditions, tenants won’t have a nicer place to live for three to five years, because selling a piece of public housing is a complex proposition involving the IRS, state and local governments, and tenants, needless to say,” said Robert McKay, executive director of the Council of Large Public Housing Authorities in Boston.

Demands From Tenants

Tenants recently demanded that the City Council pay for a consultant to help them devise their own plan for operating Jordan Downs, following the lead of public housing tenants in Washington, D.C., and St. Louis, who are taking over similar projects.

Carl D. Covitz, the new chairman appointed by Bradley to oversee the Housing Authority Board of Commissioners, confirmed that the plan to sell Jordan Downs “could easily” mean a wait of three to five years before major renovations begin. However, Covitz withheld judgment on the controversy, saying he cannot comment until he has been formally confirmed by the City Council.

The letters obtained by Elsesser show that on Sept. 14, 1988, Benjamin F. Bobo, manager of the Los Angeles HUD office, informed Gonzalez-Correa that HUD was withdrawing $5 million it had earmarked “because of your intent to submit a disposition (sale) request for the Jordan Downs development.”

According to the documents, Gonzalez-Correa wrote several letters to HUD, asking officials to reconsider their decision. But in a letter in late October, HUD regional Administrator Robert J. De Monte turned down her request.

“It is the department’s policy not to comprehensively modernize a project when serious discussions are taking placing regarding a demolition or (sale) of the same project,” he wrote.

A ‘Dead Issue’ Now

“It’s basically a dead issue now,” Dirk Murphy, an assistant to De Monte, said Tuesday. “There’s a tremendous demand for these funds. The money has gone elsewhere.”

Instead, Murphy said, HUD approved $840,000 in emergency funds for Jordan Downs, some of which has already been spent. It also reallocated $1 million of the $5 million to Aliso Village near downtown.

Whatever the outcome of the plan to sell Jordan Downs, several housing experts agreed that a continuing failure by the Housing Authority to work closely with the tenants and the community could jeopardize the proposal.

Angus Olson, executive director of the Alexandria, Va., Redevelopment and Housing Authority, which recently sold a public housing project that was developed as low-income and market-rate housing, said the key to success is “to bring the tenants and community into the decisions right from the beginning.”

“We built a consensus here in Alexandria by forming a task force of residents, citizens and people at large right from the outset,” Olson said. “We went to neighborhoods, outreached to them, went to to councilmen, asked a lot of questions, before we moved forward on anything at all.”