City Officials Skeptical of CRA Subsidy : Hollywood: Council members question whether developers really need $140 million from taxpayers for two revitalization projects.

Los Angeles officials, responding to disclosure of closed-door talks between the city’s Community Redevelopment Agency and two developers seeking up to $140 million in subsidies, say they intend to make sure Hollywood’s pressing needs are not sacrificed just to save two massive projects.

The Times reported Thursday that the CRA is negotiating with two developers, Melvin Simon & Associates and Hollywood/Highland Partners, who had earlier pledged to build their Hollywood projects without any taxpayer money but now contend they need significant subsidies in order to proceed.

The developers’ proposed projects have long been considered the cornerstones of the CRA’s $922-million effort to revitalize the decaying heart of Hollywood. But the developers now say they need the CRA’s help because of a lack of financing, the incipient recession and the neighborhood’s continuing deterioration.

Simon’s much-ballyhooed Hollywood Promenade would create more than 1 million square feet of museums, offices, retail shops, movie theaters and a hotel. Hollywood/Highland’s as-yet-unnamed “urban village” would have 1,000 apartment units, an office complex and retail stores. They would occupy sites on opposite sides of Highland Avenue on the north side of Hollywood Boulevard.

Hollywood boosters, including members of a citizens’ advisory committee that monitors the renewal effort, lauded the CRA’s efforts to keep the projects alive by offering some redevelopment money to sweeten the deal.

But the report that the CRA may have to chip in significant funds to help the projects stay on track was met with skepticism by some city officials and open contempt by critics of the redevelopment agency.

“I am very concerned,” said City Councilwoman Gloria Molina, who questioned whether it would be wise to use public money to support “private commercial development if in fact they can be financed on their own.”

Molina is chairwoman of a city council committee established last year to keep tabs on the CRA. She is also one of several council members who have sharply criticized the redevelopment agency, contending it favors big-business deals at the expense of low-income housing. She has also criticized it for resisting oversight by the council and hiding deal-making efforts from city officials.

“They are not supposed to be out there wheeling and dealing,” Molina said of the CRA negotiators, who have refused to comment on the details of the talks with the developers. “We have every intention of getting involved with what is going on, and seeing if it is necessary and will benefit the city.”

Molina said she will be scrutinizing the projects before they come before her committee for approval. She said she wants to make sure that the developers really need the money and that they are not just trying to pressure the CRA into giving them lucrative financing packages.

“One of the questions that will be asked is whether these projects are the only way to go, or if there are other alternatives” in rebuilding the core of Hollywood, Molina said.

Councilman Zev Yaroslavsky, one of three members of the redevelopment committee, also said he wants to make sure that the CRA does not place too much emphasis on using taxpayer money to build lavish commercial complexes, particularly at the expense of affordable housing.

“Any redevelopment plan is a major financial issue--we have to decide as a city how much we can afford, how much we can invest,” Yaroslavsky said. “The councilman in the district has a lot to say about these issues, but when it comes to the financial implications for the whole city, everyone is going to have to take a look. Every member of the council is going to want to know what the bottom line is.”

Councilman Michael Woo, who represents Hollywood and has tried to mediate the negotiations, said Thursday that it is too early for other council members to get worried about the CRA overextending itself to help the developers.

Some redevelopment money is needed to jump-start the two major development projects, Woo said. But he stressed that he will not allow the CRA to make deals that he thinks the council will reject as being too generous.

CRA officials also defended the talks, saying that subsidies are sometimes necessary to attract developers to blighted areas.

Even before the negotiations were disclosed, the CRA had been the target of angry criticism from Hollywood residents and neighborhood activists who contend the agency is too cozy with big developers.

At a public biennial forum held by the CRA late last month to discuss the Hollywood renewal project, one young resident urged that the CRA be disbanded so the money it spends on helping developers can be given to the poor.

“The CRA was originally intended to help create low-cost housing and has turned into nothing more than a gravy train for developers,” said Jeff Softley. “Let the developers fend for themselves in the free market and not be the beneficiaries of the CRA’s free ride.”

Christine Essel, chairwoman of the 38-member citizens group appointed by Woo to provide public input on the project, said last week she supported the CRA’s negotiating efforts.

“I think it’s fantastic that they are in there fighting to make these projects happen even in these difficult economic times,” Essel said. “I trust that the CRA is handling this such that the public money is dealt with wisely. They are to be very conservative in the deals they make, so that the money is somehow accounted for and is not just given away.”