They’re the Prisoners of Spring St.

Ignoring the three basic rules of real estate (“Location, Location, Location”) , Maureen and Dick Graybeal paid $87,000 in 1984 for a condominium on South Spring Street, a block from Skid Row in downtown Los Angeles’ broken-down old financial district.

To those of us who work on Spring Street, that sounds like pushing luck to the very edge. Drug entrepreneurs crowd street corners. Panhandlers clog the sidewalks. It’s not the sort of place I’d like to go after a day at work, let alone live.

The Graybeals, however, were lured to Spring Street by a grandiose, if flawed, dream. The dream was the invention of the administration of Mayor Tom Bradley, a dream his minions once called the Spring Street Revival. The Bradley Administration believed that the street could be restored to the glory of its early days, when the city’s capitalists strolled through the hallways of its lavishly appointed buildings.

The Graybeals own an office and school supply company downtown. Living in a beach city, they needed a weekday pad to cut down commuting. As part of an attempt to make real the mayoral dream, the Los Angeles Community Redevelopment Agency was subsidizing low-interest mortgages to purchasers of condos in Premier Towers at 621 S. Spring St., an old office building that was being converted into residences. The agency promised condo purchasers security and big city amenities, all at comparatively low cost.

The Graybeals and about 30 others bought into Premier Towers. They saw themselves as pioneers in a back-to-the city movement.

They thought wrong.

Unable to find individual buyers for most of its condos, the CRA arranged a mass sale to a real estate company, which in turn rented out the units. Things went south fast for the South Spring Street pioneers. It’s a phenomenon of condo economics: Because most of the building was now rental units, the privately owned Premier condos lost market value.

“With a building 80% rental, nobody has been able to sell their units because no mortgage company will lend on this building,” is how Maureen Graybeal explained it to me recently in a letter. “The fact is that we are the only people we know in California that invested in real estate in 1984 and it has gone down in value since that time.”

I was familiar with the Spring Street Revival, although until I walked over to the Premier and talked to Maureen Graybeal and some of her neighbors, I’d never met anyone hurt by it.

It really began in 1974 when Bradley, just elected mayor, won City Council approval for his big downtown redevelopment plan, a new city center of high-rises to be built along Flower and Figueroa streets, west of Spring.

Most of these high-rises have now been built. Their construction has increased downtown land values, bringing in huge amounts of property taxes. Much of this money has gone to the CRA. Using some of these property tax dollars, the CRA embarked on the Spring Street Revival, another phase of downtown redevelopment.

The CRA subsidized the conversion of an abandoned Spring Street bank into the home of the Los Angeles Theatre Center. More CRA money helped reopen the old stock exchange building as a night club----called the Stock Exchange. Work began on a new state office building that would bring more than 3,000 workers a day to the street. And the CRA issued revenue bonds to finance the Premier Towers.

But the grand revival came up short. The state office building is five years behind schedule. The Stock Exchange nightclub closed, and the CRA is trying to collect its debt. The theater center continues, but only with the help of CRA subsidies. All down Spring Street, the decay that was to have been eliminated only got worse.

This failure has caused intense controversy within the Bradley Administration and the City Council.

On Monday, the council’s Community Redevelopment and Housing Committee once again heard a report on efforts to recoup money from the Stock Exchange disaster. Prospects are dim, council aides said. The committee itself is partially a product of the Spring Street Revival, whose insatiable appetite for CRA funds has become a symbol of the agency’s shortcomings. Angry over Spring Street and other CRA projects, the council formed the committee to exert greater control over the agency.

None of this, of course, has helped the Graybeals and their neighbors.

Jim Wood, who heads the CRA board, said he’s still confident Spring Street will come back to life.

The owners are skeptical. They go about their work. They shop at the downtown Grand Central Market. A few brave ones even jog on Spring Street at 5 a.m. But some----yuppies moving into parenthood, older owners ready for retirement----want to leave but find they can’t sell. They are prisoners, prisoners of the Spring Street Revival.