Lawndale May Turn to Redevelopment in Bid to Solve Budget Woes

The Lawndale City Council, lured by the promise of additional tax revenue, put aside decades of distaste for redevelopment Thursday and voted unanimously to set up a redevelopment agency.

The decision to form the agency, which will come up for final council approval Jan. 24, came as a surprise to many longtime residents who have fought such proposals in the past, fearing that their homes and businesses will be condemned to make room for revenue-producing projects.

But city officials pointed out that Lawndale, which has never authorized a property tax and lacks an industrial base, has limited sources of revenue and may have to cut services if it does not find a way to bring in more cash.

They praised redevelopment as an ideal way to attract investment to the city and to bring in new businesses that would generate additional sales tax revenue, the city’s biggest source of revenue.

“A redevelopment agency is probably the best vehicle that the city of Lawndale--the residents--have to get things done in the city,” newly appointed City Manager John E. Nowak said. “This is a vehicle for the long-term financial stability of the city.”

Under the ordinance establishing the redevelopment agency, which would have the authority to acquire blighted property and sell it for redevelopment, the council would be empowered to act as its board of directors and the city manager as executive director.

Several residents at the Thursday night meeting said they opposed the city’s plan and questioned the legality of doing so while the city is in the process of amending its General Plan. Many residents derided the redevelopment proposal, with one calling it “stealing from the poor to give to the rich,” and another saying it threatened one of the South Bay’s most prominent soup kitchens.

Only one speaker, a local developer, spoke in favor of it.

During discussion before the vote, council members made it clear that they would not allow redevelopment in residential areas but would restrict it to the city’s flagging commercial zones--an idea the Lawndale Chamber of Commerce fully supports.

“To get us out of a bad financial position, I think taking a look at this redevelopment is a positive thing,” Councilman Bill Johnson said. “No one is talking about getting involved in residential areas. It’s the commercial corridor we’re interested in.”

Mayor Harold Hofmann, who was forced in 1972 by the California Department of Transportation to sell an investment property to make way for a freeway project, said he does not favor eminent domain and would not approve redevelopment projects in residential areas.

But he said setting up a redevelopment agency might be the solution to “bail this city out” of financial hardship, if only because it would give the city the legal means to keep some of the tax increment revenue generated by property improvements rather than see that money flow to the county.

Residents were not mollified by council explanations, however, and several spoke of recalls if the plan went ahead.

Community activist Nancy Marthens, a member of the city’s General Plan Committee, which is in the process of writing new development guidelines, told the council that it is obligated to operate under the the 1976 General Plan until the new plan is completed.

“Establishing a redevelopment agency violates the intent of that (1976) General Plan, which limits development to private” means, she said. “I am vehemently opposed to establishing a redevelopment agency in Lawndale at this time, or any other time.”

Sister Michele Morris, executive director of House of Yahweh, said she feared that her soup kitchen for the homeless, which is across the street from City Hall, would be the first to be razed in the name of redevelopment.

“I’m going to be the first one you want to get rid of because without getting rid of me, you can’t develop your civic center,” Morris said. “The fact that you can take our land and give it to a private developer really scares me.”

Council critic Steve Mino, who said redevelopment is regarded as a swear word around the city, painted a grim picture of his experience with eminent domain elsewhere.

While redevelopment projects are being planned, property values in so-called blighted areas suffer, and owners have trouble getting loans against their properties, he said. Once the redevelopment agency acquires these devalued properties, it often sells them at half price to a developer who goes on to make a profit, he said.

“What I call this is stealing from the poor to give to the rich,” Mino said. “It’s Robin Hood in reverse.”

But City Atty. David Aleshire said such arguments are inaccurate and premature.

“I certainly hope that residents will understand the council has always avoided this,” Aleshire said. “But when you look at the cities making economic progress, they’re the ones doing this through the redevelopment process. If you don’t start this, you will be looking at very difficult times in trying to maintain a service level that the people want.”

Under state redevelopment law, the agency is required to give owners a chance to improve blighted properties before allowing a developer to acquire them. The agency is also required to pay fair market value to compensate any property owner displaced by redevelopment.

In addition, the council can limit the powers of the agency and the types of incentives it will use to attract developers, Aleshire said. It would also be required to hold several public hearings before it could determine that an area is blighted.