Lakewood to Create $61-Million Renewal Zone

In a move designed to preserve and promote its sales tax base, this city will create a new $61-million redevelopment area that takes in 15 different sites, including the old Chevron tank farm on Downey Avenue where neighbors last year defeated a proposal to build an office center.

“We have quite a few nodes or commercial areas in Lakewood that are in some state of disrepair,” Mayor Larry Van Nostran said this week. “They’re aging tremendously, they’re producing very little revenue. We feel by putting them in the redevelopment area we can upgrade them . . . . As it is now, we can’t help them.”

State law allows cities to give financial aid or incentives to private landowners or businesses in a redevelopment zone so that they can expand or upgrade their facilities. The concept behind redevelopment is to promote private-sector investment in areas that have deteriorated or are stagnant.

The City Council on Tuesday accepted an environmental impact report on the new zone and scheduled a public hearing on the project for June 13.

The 15 sites in the proposed zone are scattered throughout the city and are mostly small-office and commercial areas. They “don’t represent the strong marketplace that this city really is,” said Charles Ebner, director of community development and the city’s chief planner. “It doesn’t do the city any good to have underachievers as businesses,” he said during a recent interview.

Lakewood, faced with the imminent loss of three of its automobile dealerships, is anxious to upgrade its commercial areas and also to lure new businesses to the city. Twenty-five percent--or $6.6 million--of the city’s total tax revenue last year came from sales tax.

More significantly for the future of the city, said Donald Waldie, the public information officer, the sales tax revenue increased only 1% between 1987 and 1988.

“That is an anemic figure,” Waldie said. “It certainly doesn’t keep pace with the cost of living in California.”

Sales tax has become increasingly important to cities, said the mayor, because federal assistance has dried up and under Proposition 13, the statewide property tax limitation measure voters passed in 1978, cities cannot raise property taxes.

About 160 different businesses, ranging from pizza parlors and corner video stores to a Best Western motel and a bowling alley, already exist in the new district, which is the city’s second redevelopment area.

The first, which has been almost completely redeveloped, was created in the 1970s and included the Lakewood Center Mall and an area known as Dutch Village--four, all-commercial corners at the intersection of South Street and Woodruff Avenue.

Success at Dutch Village

By way of demonstrating what city officials believe are the benefits of redevelopment projects, they point to the success of Dutch Village. In 1985, according to city tax records, the sales taxes generated for the city from the existing businesses there was $100,000. Now, the sales tax is $300,000 annually. The number of jobs in Dutch Village doubled after redevelopment, going from 200 to 400.

About 3,200 jobs, largely in stores, restaurants and office buildings, will be created in the new zone, according to the environmental impact report. It is impossible to estimate how much the sales tax would be increased by redevelopment in the proposed new zone, city officials say.

Redevelopment in the new areas, said Jennifer Coile, the city planner in charge of the proposal, will proceed at a slow pace. “We don’t have a detailed strategy on which areas will get attention first,” she said. “A lot of it will be working with existing property owners first to see their needs and wants.”

Almost no land within the proposed redevelopment zone, Coile said, would undergo a zoning change. Any new businesses, she said, would have to conform to the city’s General Plan. One exception, however, is the former tank farm owed by Chevron in the city’s northwestern corner.

Close to 1,000 residents showed up at a City Council meeting last year to protest a proposed zoning change that would have allowed an office park to be built on the 33-acre site. Faced with such strong opposition, the council refused to rezone the land from manufacturing to light industrial.

Now, one of Chevron’s affiliate companies, Pacific Coast Homes, is working on a proposal to have the city rezone the site to residential so that 190 detached homes can be built there. The area around the site, which was once used to store crude oil, is all residential.

Financing Undetermined

Dennis O’Connor, project manager for Pacific Coast Homes, said the firm is studying the redevelopment zone proposal to determine how it would affect the property.

The city, officials say, has not yet determined how it will finance the $61 million to help businesses enhance their property or their operations. The city could sell bonds to generate revenue or it could make low-interest loans to property and business owners. It could also, in the case of new development, pick up the cost of such improvements as sidewalks or new streets.

Under redevelopment law, the city could exercise eminent domain if it wants to create larger parcels of developable land from a series of small parcels that belong to individual owners. There are no homes on the parcels. Officials, however, are downplaying that aspect of redevelopment, saying that is not what they want to do in the new zone. Rather, they say, they want to enhance existing business wherever possible.