$23-Million Cleanup Ends at Franciscan Site : Atwater Village: The developer, who paid for the work, plans to build a shopping center but is having trouble finding financing.

The massive cleanup of hazardous material at the former Franciscan Ceramics manufacturing plant in Atwater Village was completed Tuesday when the final truckload of contaminated dirt and debris was hauled away.

The $23-million cleanup project has transformed a formerly unusable site into a 45-acre expanse of dirt and asphalt ripe for development--one of the largest parcels remaining in northeast Los Angeles. Now, the question of how the land will be used is on the front burner again.

The property owner who funded the nine-month project plans to build a major shopping center there but is without financial backing to proceed with the development. The Los Angeles Unified School District is also looking at the site for a much-needed senior high school.

The cleanup is one of the first and among the largest in the nation to be completed solely through private funding by a developer who played no role in the contamination, a spokeswoman for the developer said. It may signal hope for rehabilitation of other hazardous sites through private funding.

“This may be one of the new approaches to getting a contaminated site cleaned up,” said Melissa McKeith, an attorney representing the property owner--Franciscan Promenade, a development partnership and subsidiary of Schurgin Development Cos. of Los Angeles.

Schurgin, a leading developer of major shopping centers in Southern California, purchased the site in 1988, reportedly for about $22 million. It was expected at the time that cleanup of tons of lead-tainted ceramic sludge and pottery chips put there during 80 years of manufacturing dinnerware and tiles would cost $6 million.

The property at 2901 Los Feliz Blvd. had remained unused since it was placed on the state Superfund list of hazardous waste sites in 1984, which made it eligible for cleanup funds. But because it ranked low on the list, Schurgin pledged to pay for the work privately.

The contamination was compounded in December, 1988, when large concentrations of cancer-causing asbestos were found on the sprawling site. The asbestos piles, which resulted from the illegal demolition of buildings, were immediately covered with plastic sheeting, preventing any health threat to the neighborhood, according to state health officials.

Several officials of a subsidiary of the developer and its contractors were charged this year with felony violations by the Los Angeles County district attorney’s office for their actions related to the demolition. A preliminary hearing on the charges is scheduled Oct. 5 in Los Angeles Municipal Court.

After the demolition was halted, a carefully developed plan to tear down the buildings and clean up the lead and asbestos at the site was approved last year by the state Department of Health Services and the South Coast Air Quality Management District. Actual cleanup began in January.

Thorough tests of the site conducted before and during the cleanup found that contamination was far more extensive than originally suspected--which greatly increased the cleanup costs.

Yet, Hamid Saebfar, project supervisor for the state health department, said completion of the project in just nine months was remarkably fast. The work is expected to be certified by state and local officials within a month, which will allow the state to remove the site from its Superfund list.

More than 70 buildings and concrete slabs--38 of which contained hazardous materials--were demolished in the cleanup operation, according to a report released Tuesday by the toxic waste consultant to the project, Harding Lawson Associates.

The operation required the removal of more than 6,000 truckloads of hazardous materials, most of which was shipped to the Kettleman Hills hazardous waste dump in the San Joaquin Valley. In all, more than 105,000 tons of material were removed, some of it packaged in special containers and transported as far away as Chicago for decontamination and reuse, according to the report.

About 94,000 tons of contaminated soil remains on about 10 acres of the northwest portion of the site. That area was dug out to a depth of five feet, then covered with clean dirt and capped with asphalt paving to prevent water from leaching toxics into the ground water.

Franciscan Promenade plans to build an $82-million shopping arcade with about 30 stores, including a major home improvement center, supermarket, restaurants, retail outlets and theaters.

Los Angeles city officials said the development would generate more than 1,500 jobs and $2 million a year in sales and property taxes. Because of the expected economic benefits, the city had pledged to spend more than $14 million in federal and local funds to support the project.

However, city officials now say the unexpected high cost of the cleanup jeopardizes the project. The developer has been working unsuccessfully for months to obtain private financing, officials said.

The city in 1988 lent the developer $9.5 million in federal funds to help purchase the site, but could withhold the rest of the promised $14 million. The loan must be repaid to the city by August, 1995.

Developers have also qualified for a $4.5-million federal urban development grant, which would help them recover some of the cleanup costs. That money has not yet been given to the city or the developer and may be lost unless private financing for the shopping center is obtained, said Marilyn Lurie, assistant director of the city Community Development Department.

The developer has been given until January “to give the Department of Housing and Urban Development assurance that the project will go forward,” she said.

In addition to financing obstacles, the shopping center proposal has met community opposition that has caused rifts among Atwater Village residents and with their neighbors in Los Feliz. Some residents argue that a large commercial development would create excessive traffic on the only street serving the site--Los Feliz Boulevard--and cause an increase in crime.

Others say the site would be better used for a high school to relieve crowding in schools immediately north of downtown, including Belmont, Marshall and Eagle Rock high schools.

The school district has named the Franciscan property as one of three potential sites for a high school, said Bob Niccum, district real estate director. The school board is expected to decide late this year whether to pursue studies of the sites. Despite objections by the developer, the school district could acquire the Franciscan property through eminent domain.

Marilyn Bush, a leader of the Los Feliz Improvement Assn., said acquisition of the Franciscan site for a school may be far more economical--despite reimbursing the developer for the cleanup costs--than condemning hundreds of homes and apartments elsewhere. “That’s a prime piece of property,” she said.

However, some Atwater residents worry that construction of a school may cause problems with teen-age gangs and drugs.

Ron Bray, project director for Franciscan Promenade, said developers this week are beginning the process of obtaining final city approval and building permits, which is expected to take about three months.

A construction date has not been set, pending financial arrangements and final approval.

A Los Angeles Planning Department official said the project must still go through several layers of approval, including certification of an environmental impact report and Planning Commission hearings on a project permit and site review.