Judge Clears Way for Industry to Redevelop Site

A Superior Court judge has cleared the way for city officials to develop 600 acres of local pastureland, even though critics have charged that the project would illegally divert millions of dollars in property taxes away from Los Angeles County.

Judge Aurelio Munoz on Wednesday ruled in favor of Industry and its redevelopment agency, whose plan was challenged in an October, 1988, lawsuit by the Industry Civic Planning Assn., a private business group. The association accused the city of twisting state redevelopment law in an attempt to obtain up to $450 million in property tax revenues after the land was developed.

Munoz’s decision will allow Industry to install roads, sewers, lighting and other improvements on the land, then resell it to developers.

At issue was the plaintiffs’ claim that Industry had illegally declared the land a blighted area, which state law requires in order for a redevelopment agency to receive full property taxes on the value of new construction in the area. The money would otherwise go to the county and local school districts.

City officials denied violating state law. “If any property was ever blighted, this area was,” Industry City Atty. Graham Ritchie said Wednesday.

The plaintiffs, a group of 60 local business people who have frequently challenged the city’s redevelopment policies, plan to appeal the decision, said their attorney, Murray Kane.

“The ruling is an incredulous ruling,” Kane said Thursday. “There is no way that hillside can be called blighted.”

Other plaintiffs were Concerned Redevelopment Officials of Southern California, a nonprofit watchdog group that monitors redevelopment projects, and Susan Berg, a county taxpayer.

Their suit charged that the pastureland project would draw development away from legitimate redevelopment efforts in depressed areas of the city. It also said the cost of issuing bonds to pay for streets, sewers and lighting in the area would keep Industry from reducing its past bond debt, which local businesses support through property taxes.

The city, a 14-mile business strip with only 700 residents, purchased the property in 1983 for $27 million and annexed it as a redevelopment project area in August, 1988. It plans to sell the land--which will be worth $120 million after grading and improvements are made--for industrial and commercial purposes, Ritchie said. An extension of Grand Avenue through the area, from Valley Boulevard near Walnut to the Pomona Freeway, is scheduled to open in September, and more roads are being planned, he said.

Los Angeles County had filed a similar lawsuit shortly before the business group, challenging the adequacy of the environmental impact report on the 600 acres, but the county settled out of court in April, 1989, after Industry officials promised the county 57% of the property tax revenues.

Industry redevelopment officials maintained that the vacant project area fits the legal definition of “blighted” because the city had incurred a $40-million debt in purchasing and financing the land. Increased property taxes through industrial and commercial development would pay off that debt, they said.

The business group also had charged that the plan would violate a provision of California Redevelopment Law that requires that 80% of a project area be urbanized before the city can receive property tax revenues. City officials contended that the land was exempt from that provision because it is publicly owned.