Neighbors End Effort to Halt Planned Drug Center : Lake View Terrace: After years of opposing the facility for substance abusers, the homeowners decide it’s better to negotiate than fight.

Nearly four years after they fiercely fought a proposed drug rehabilitation center--even one which briefly carried the endorsement of Nancy Reagan--Lake View Terrace residents on Tuesday gingerly embraced the latest proposal to open such a facility in their neighborhood.

The words of compromise came in response to a city permit application filed late Tuesday by Phoenix House Inc., a national nonprofit organization that wants to operate the center.

“The original intent was to fight, fight, fight,” said Joycelin Furginson, an officer with the Lake View Terrace Home Improvement Assn. “But realistically, we had to come to the conclusion that we would only succeed in delaying it and if we did delay it, would we ever be able to open negotiations with them again?”

Steven Taylor, director of operations for Phoenix House’s California branch, said, “I am overjoyed with the amount of progress we have made.”

Although the association has tentatively agreed to negotiate with Phoenix House, some individuals still oppose the project, Furginson said.

The conditional-use permit application requests city permission to turn the former Lake View Medical Center into a residential high school and counseling program for 150 recovering substance abusers, ages 13 to 17. It does not include 60 additional beds for adults envisioned in earlier versions of the project.

Neighborhood acceptance of the proposal, however tentative, was a drastic change from the contentious dealings between Phoenix House and the San Fernando Valley community in 1988, when the group first indicated it planned to take over the bankrupt hospital.

At that time, the former First Lady was to lend her name and her fund-raising abilities to the project. But Reagan pulled out of the project in 1989, after neighbors threatened to picket her Bel Air mansion, forcing Phoenix House to withdraw its application.

Even two months ago, when Phoenix House announced that it had renewed its interest in the 14-acre Eldridge Avenue site, neighbors made it clear that they would put up a formidable fight.

At a meeting in the Lake View Terrace Recreation Center on May 13, Furginson and others proposed battle plans ranging from picketing the hospital to initiating a letter-writing campaign to elected officials.

The opposition movement lost momentum a week later, however, when the Los Angeles City Council voted down a proposal by East Valley Councilman Ernani Bernardi to make a competing bid on the property. Bernardi had suggested that the city could use the property, perhaps as a community center or library.

Some of the former opponents said that the council’s action made them realize that even if they were to appeal the center’s permit application to the City Council, there was no guarantee they would win.

Then, when Phoenix House succeeded in buying the property in bankruptcy court in early June for $3.2 million--less than half what it had agreed to pay in 1989--Furginson said she decided it was time to start negotiating.

“We are trying to turn what initially appears to be a negative into a positive,” she said. “We realized that they would eventually open a drug rehab center and we wanted to make it the best center it could be for the neighborhood.”

Furginson and several other residents met several times with Phoenix House representatives and have extracted some concessions from the organization, which were evident in the permit application.

The application indicates that up to 4,000 square feet of the hospital would be offered to the city or a nonprofit organization for five years to use as a library, senior center or other community program.

In addition, the application calls for formation of a community advisory committee to act as a liaison between neighbors and the center, construction of a six-foot masonry wall along the side of the property that adjoins neighbors’ back yards, and prohibition of outdoor recreation after 7 p.m.