Renewal Problems Cited by Jury Are Fixed, Pomona Says

Almost a year after the Los Angeles County Grand Jury criticized the Community Redevelopment Agency as poorly organized and understaffed, city officials said this week that they have corrected all the shortcomings cited in the grand jury report and have exceeded the recommended improvements.

“We’ve tried to use the grand jury report as a helpful audit guide to help us improve the agency,” City Administrator A. J. Wilson told the City Council at its meeting Monday night. “I feel that we have addressed all those issues.”

The report, released last April, found that the redevelopment agency lacked formal policies and procedures, which led to insufficient control over projects and developers.

This problem was exacerbated by the small size of the agency’s staff, which had to oversee dozens of projects simultaneously and, as a result, often delegated key responsibilities to developers, the grand jury found.

The agency’s organizational problems were apparent in two troubled projects, the proposed Inland Pacific World Trade Center and the Cobblestone Creek condominium development, the report said. In both cases, the grand jury found, the agency failed to investigate the backgrounds of developers thoroughly before signing agreements.

A Vacant Lot

The World Trade Center, as promoter H. Thomas Felvey told the City Council in 1984, was to have been a 12-story, $96-million complex in downtown Pomona featuring office space, a 26-room hotel and conference facilities.

However, the 4.6-acre trade center site across the street from City Hall remains a vacant lot. The project fell through after the City Council became aware of Felvey’s history of legal and financial problems and demanded that the promoter find a reputable partner for the project. He was unable to do so.

Although the city granted Felvey the exclusive right to develop the project in 1984, it did not request a review of the promoter’s financial and development background until August, 1985, the report stated.

Felvey’s background, as reported by The Times in May, 1987, included numerous lawsuits, to which the promoter had failed to respond, stemming from unpaid bills and incompleted projects. It was also disclosed that two of Felvey’s firms had been suspended by the state Franchise Tax Board.

In the case of the Cobblestone Creek project, a moderate-income condominium development that was to have included 296 units, the grand jury found that the agency’s files did not include the financial history of Essex Investment Group, the original developer.

Essex was later acquired by BX Realty Inc., and 64 units were built on the Towne Avenue site. However, BX Realty has defaulted on a loan held by California First Bank, which foreclosed on the property.

In response to the grand jury report, Wilson said the agency now conducts extensive background investigations on developers before considering their proposals.

“You wouldn’t see, with the procedures we now have in place, a Tom Felvey get an exclusive right to develop a project,” Wilson said in an interview.

Computerized Accounting

The agency now has four project-area managers and has hired an accountant to keep track of expenditures for Pomona’s 11 project areas, Wilson said. By July, the agency will have a computerized accounting system enabling it to monitor money spent on and received from every project, he said.

The grand jury report also criticized Pomona’s progress on construction of low- and moderate-income housing, which is required by state redevelopment law. The grand jury found that the agency has built only 500 units of such housing citywide.

“Certainly, this particular area is in need,” the grand jury reported, noting that crime and unemployment rates for Pomona are disproportionately high and that 33% of the city’s families receive some form of federal assistance.

In his report, Wilson said the agency has launched an “aggressive” campaign to provide thousands of units of low- and moderate-income housing. The “New-Town-in-Town” Housing Replacement Program, included in the city’s proposed new General Plan, “will provide hundreds of new homes for persons who presently reside in substandard housing,” Wilson said.

Some Are Satisfied

Mayor Donna Smith and Councilman E. J. (Jay) Gaulding praised Wilson’s response to the report. Councilwoman Nell Soto, who had requested the report, said she was generally satisfied with the improvements made. However, Councilman C. L. (Clay) Bryant blasted the city staff, saying it failed to carry out the grand jury’s recommendations.

Bryant said Wilson had not implemented the recommended policies and procedures. When Wilson cited a list of 23 procedures contained in his report to the council, Bryant said: “Those aren’t policies and procedures, those are rules and regulations.”

Wilson said in an interview that his report to the council provided merely an overview of the agency’s procedures, which are described in detail in a manual.

After Bryant had argued with Wilson for more than 45 minutes, Smith suggested giving other council members an opportunity to comment on the report.

In hailing the city’s response to the grand jury report, Smith said council members’ criticism of the redevelopment agency had created a distorted impression.

Move Forward

“Anyone who’s listening to this conversation probably thinks we have the worst agency there ever was,” Smith said. “We’ve got to stop kicking ourselves. . . . I think what we want to do is move forward. If we want to sit down and talk about the past and how bad things are, then we’re never going to get anywhere.”

Bryant freely admitted to being harsh in his appraisal of the report.

“You never know what’s wrong until somebody tells you,” he said. “If that’s negative, then I’m negative. If something’s wrong, I want it made right.”

The council did not formally receive Wilson’s report because Bryant said he had many more questions about the agency’s response to the grand jury recommendations. The matter will be considered again April 17.