Officials Getting Rental Bargains From City : Government: Two on city staff are paying $600 a month for the homes. Six others are being rented at the same price, most to firms or individuals with city ties.

The City of Industry has spent nearly $500,000 to build two houses on the grounds of its luxurious Industry Hills hotel and recreation complex for rental to city officials at bargain rates.

City Manager Chris Rope, who earns $113,303 a year, and Carl Burnett, who earns $85,500 a year as executive director of the Industry Urban-Development Agency, are paying $600 a month for the two-story houses at the top of a winding private road, county tax records show.

The new houses are an addition to a cluster of six homes built by the city and its redevelopment agency in the early 1980s. The earlier homes, constructed at a cost of $852,635, also are being rented for $600 a month, most apparently to companies or individuals connected with the City of Industry--one of them the father of a city councilman.

The home construction and rental deals are legal because both the City Council and the city’s redevelopment agency can use city money at their discretion, as long as members do not personally benefit, said William Carlson, executive director of the California Redevelopment Assn.

But N. Eugene Hill, an assistant attorney general, said the arrangements may violate a provision of the state conflict of interest laws that prohibit city officials or city employees from participating in any negotiations or contracts that would benefit them.

“The key factor is how and when (the city officials or city employees) were involved in the development of the housing and contract negotiations,” Hill said Wednesday. But he said he could not comment directly on the City of Industry case without investigating it.

Officials of the League of California Cities and the Southern California Assn. of Governments said the construction of housing for city employees is unusual, if not unprecedented.

Governors and mayors of large cities such as Los Angeles are provided with rent-free homes. But for a tiny city such as Industry, “that’s the first time I’ve heard of a high-paid individual getting housing like that,” said Fernando Del Rio, a spokesman for the association of governments.

Industry City Atty. Graham Ritchie said the houses were built for Rope and Burnett because the two must be available to the city seven days a week, 24 hours a day.

Also, the two are required to live within city boundaries as a condition of their employment.

“I consider it legal to do that sort of stuff when you want people to be in an area where there is not readily available houses,” Ritchie said. The City Charter does not specifically allow for the use of city funds for city employee housing, Ritchie said. But he said the houses fall under a provision allowing for “public purposes, upon such terms as the council may determine.”

The City of Industry is an oddly shaped municipality of manufacturing plants, warehouses and other businesses along the Pomona Freeway and several railroad lines.

It has only 106 housing units within its boundaries and a population of 631, according to the 1990 census. Its 1991 annual budget, largely from taxes and fees paid by the businesses, is $55.3 million. In contrast, the city of Sierra Madre, which has 10,762 residents, has an annual budget of $11.3 million.

Though City of Industry City Clerk Philip L. Iriarte said lease agreements with the two officials were not available, documents from the county tax assessor’s office showed the homes are being leased to the two for $600 a month.

The three bedroom, three bath houses are on a cul-de-sac that includes the six other one- and two-story homes. The houses receive city-paid pest control care and gardening services, according to city records.

The homes are accessible through the gated Park Road entrance of the Equestrian Center. In order to get to the private road, visitors must pass a uniformed guard who is at the gate 24 hours a day.

Housing in upscale residential tracts is available near the City of Industry, real estate agents said. In neighboring Diamond Bar, Walnut, Hacienda Heights and West Covina, similar 1,300 square-foot houses rent for between $1,000 and $1,500 a month, the agents said. The exact size of the City of Industry houses was unavailable from county records.

Ritchie said rent for the two houses was set at $600 a month to offset any relocation costs incurred by Rope and Burnett.

Rope owns a house in Pomona, about five miles from the City of Industry, where he lived before moving to the city-owned house last year, county records show. Rope has worked for the City of Industry since 1982. The Pomona house, assessed at $155,087, is currently being rented, but information on the monthly rate was unavailable. Rope also owns a residence in Palmdale assessed at $39,564, county records show.

Rope refused to comment on his housing deal.

Information on Burnett’s previous home was unavailable. Burnett did not return numerous phone calls or answer a letter sent by The Times.

The 600-acre Industry Hills complex, which is separated from the rest of the City of Industry by La Puente and unincorporated Los Angeles County, includes golf courses, swimming pools, tennis courts, equestrian trails, an indoor polo arena and other recreational facilities.

The complex also is home to the Industry Hills and Sheraton Resort and the Industry Hills Exhibit Conference Center. The hotel’s owners and business partners sued the city last year, claiming the city reneged on an agreement to help build a second hotel on the site. The case is pending.

The Industry Hills area is administered by the city’s Civic Recreational Industrial Authority, a branch of the city redevelopment agency. The authority is responsible for leasing the Industry Hills area.

The City Council unanimously approved the construction of the Rope and Burnett houses in October, 1989, along with an amendment to the employment agreements of Rope, who has worked for the city since 1982 and became city manager in 1986, and Burnett’s predecessor, John J. Radecki Jr.

The amendment required both officials to live within city boundaries, suggesting a site in the Industry Hills area. Radecki died three months later and Burnett, who was previously assistant director, took his place in early 1990.

The Rope and Burnett houses were completed in June, 1990, by Wang Milestone Inc., the only bidder on the project, for $475,884. Rope and Burnett moved in last fall, according to documents filed by the city with the County Tax Assessor’s office.

Other cities have provided housing assistance through low-interest loans or co-ownership agreements to attract city employees in high-cost areas, said officials at the League of California Cities.

Pasadena, for example, invested $377,500 to become majority owner of City Manager Philip Hawkey’s new $615,000 home last year. The equity participation agreement was a housing assistance arrangement made to lure the former Toledo city manager to the West Coast.

Pasadena also provided a $45,000 housing assistance loan to its city clerk as part of an employment condition when she left her job in Foster City, and last week voted to loan several of its upper level employees up to $50,000 for home purchases.

City of Industry officials would not comment on whether other forms of housing assistance had been discussed with the two officials.

Officials said the six original houses, financed by the Civic Recreational Industrial Authority, were designed to provide housing for employees of the Industry Hills complex.

According to county documents filed earlier this year, these houses have been leased to: Cisco Security Services, C & C Engineering Inc., Herbert and Margie Hearle, Howard Jenkins (two houses) and David Winn, the father of City Councilman Dean Winn. It was unclear, however, who actually was living in the houses.

Cisco Security Services provides security for the Industry Hills complex. C & C Engineering is the city’s sole consulting and engineering firm.

Herbert and Margie Hearle no longer lease a house, said Detlef Reck, general manager of the Industry Recreation and Conference Center. Margie Hearle was a secretary at the center before retiring in March, according to the center’s personnel department.

Howard Jenkins is general manager of the City of Industry Water Works System, which is owned and operated by the city. Two houses are leased under his name, according to county documents.

David Winn is manager of the city-owned Equestrian Center, which is leased to the redevelopment agency.

None of the lessees could be reached for comment.