CRA Trims Downtown Program

Los Angeles redevelopment officials, turning up the heat on the city and county to support raising the $750-million cap on spending for downtown renewal, Wednesday scaled back their agency’s work program, including providing no increase in funds to agencies serving the homeless and mentally ill on Skid Row.

The action, officials of the Community Redevelopment Agency said, signals the beginning of the dismantling of the downtown redevelopment project, expected to reach the court-ordered spending limit within three years.

“Faced with the uncertainty over the continued funding for the central business district, the downtown work programs must begin to be scaled back and eventually shut down,” CRA administrator John Tuite said.

The courts will decide whether to raise the cap, but CRA officials were directing their message at City Councilman Ernani Bernardi and the county Board of Supervisors, who brought a lawsuit that led to imposition of the spending limit in 1977.

Mayor Tom Bradley last year proposed raising the cap to $5 billion. He sweetened the proposal with a promise to devote more than half of the additional funds to low-income housing and to create a citywide program to provide after-school care for children or working parents.

At stake is whether the CRA will continue to receive billions of dollars in tax revenue from increased property values brought about by redevelopment or inflation, or whether the money will go to the city, county and school district.

Bernardi, however, was not swayed by the threat implied in Wednesday’s budget juggling.

“This is just another devious scheme of theirs to build up sympathy for raising the cap,” Bernardi said. “They have all the money they need.”

The councilman, who has long contended that all county taxpayers are subsidizing downtown high-rise development, said that if the CRA cap is not lifted the county will receive $1.8 billion in additional tax revenue, which it could use to carry on and possibly expand social programs.

Threat Seen

Councilman Zev Yaroslavsky, who has advocated greater council oversight of the CRA, said: “They are engaged in a public relations campaign to threaten social service providers in order to get the City Council to give them the latitude to subsidize big commercial developers in downtown Los Angeles, and that is absolutely crazy.”

The CRA projects that by the end of this year, it will have spent $683 million for downtown redevelopment but completed only about 30% of the entire project, which covers 1,500 acres.

In cutting $10 million from the proposed $177-million downtown redevelopment budget for the new fiscal year, the CRA board provided no increase in funding to private agencies serving the homeless and mentally ill on Skid Row. The CRA is providing $7 million to the agencies this year; it will provide the same amount in the coming fiscal year.

The board also dropped plans to prepare a development plan for Central City East, scaled back efforts to rehabilitate historic buildings and set aside an effort to rebuild and expand the 9th Street Elementary School in downtown.

Donald R. Spivack, the CRA’s director of operations, said the cuts are “just a precursor of what is going to happen three years from now when CRA is expected to reach the $750-million spending limit for the central business district project.”

“It’s all downhill from here,” he said.

CRA officials said the agency has neared its spending limit faster than anticipated because of higher-than-expected costs associated with the clearing of land for expansion of the Convention Center. The cost of acquiring land for the project was $126 million, almost double the amount projected in 1986. CRA officials pointed out that they undertook the project at the City Council’s request.