L.A. Riot Aid Bill Mired in Infighting at Capitol : Rebuild: Partisan politics, feuding agencies and fearful homeowners combine to make passage doubtful.

Three months after the fires raged, the future of Los Angeles’ burned-out inner-city neighborhoods is being shaped in a bitter political battle centered 350 miles to the north--in Sacramento.

The fight involves partisan politics, feuding agencies, fearful homeowners and, of course, money--upward of $800 million. The question at hand is how best to foster new jobs and commercial development in riot-torn areas that languished even before this spring’s urban violence.

Mayor Tom Bradley and Peter V. Ueberroth, head of Rebuild L.A., are pinning much of their hopes on a bill that would entrust ravaged neighborhoods to the embattled Los Angeles Community Redevelopment Agency.

If signed into law, Assembly Bill 394--the Los Angeles Area Economic Recovery Act--would become a cornerstone of the city’s far-reaching reconstruction program, providing a “fast track” for new redevelopment projects in a target area spanning 150 square miles.

“This legislation is critical,” said CRA Administrator Ed Avila, who, like other Los Angeles officials, foresees no other source for the millions of dollars of government funding that restoration may require. “There is no other game in town in terms of long-term revitalization.”

But passage of the bill is iffy, at best.

The multipronged opposition includes Los Angeles County, whose lobbyists argue that the county’s strained budget can ill afford to surrender the huge amounts of property tax revenue that would help finance the program. Many Republicans in the Legislature are philosophically opposed to redevelopment, while rural Democrats question whether Los Angeles should, in effect, be rewarded for burning itself down.

And with time running out to enact the measure, inner-city homeowners have stepped up their fight, picketing in the Southland and attending Sacramento hearings, for fear that redevelopment will mean property condemnation--the possible loss of their homes.

Although the bill is being hastily reworked to avoid that likelihood, many homeowners say they are wary of accelerated growth and distrustful of the CRA, the powerful public agency that bulldozed Bunker Hill to put up high-rises. The CRA’s efforts to rebuild many other parts of Los Angeles--notably Chinatown, Hollywood, North Hollywood and Watts--have been dogged by controversy.

“I oppose the CRA, period,” said Juanita Dellomes, whose Echo Park home is within the bill’s vast target area, which stretches from Hollywood to Compton and from the Eastside of Los Angeles to Inglewood, incorporating several small cities with their own redevelopment agencies. “They’re going to make the project areas only for special groups--for developers. I don’t see the CRA having an interest in the community at large.”

Assemblyman Curtis Tucker Jr., who introduced the measure June 23 at the urging of city leaders, faces an end-of-August deadline to push the bill through the Legislature; otherwise, it will die as the session adjourns.

Tucker (D-Inglewood) acknowledged that he faces an uphill fight. The initial version of the bill failed to clear the Assembly and is being rewritten to provide stronger protections for homeowners while making it less a “wish list” for the CRA, he said. The new version--containing most of the same key provisions as the original--is expected to be ready next week. “The problem was . . . most of the people on my staff, including me, didn’t know much about redevelopment,” Curtis said of the early draft. “We’re finding out where we need to change it, what safeguards we need to put in.”

Still, he said, “There’s a lot of bad information floating around--how we’re going to take people’s homes, this and that. It’s absolutely untrue. It’s a reaction a lot of people have when you talk about the CRA.”

Tucker said he is carrying the legislation because it may be the only way to avoid the chronic atrophy that has plagued Watts, a community still unhealed from the uprising of 1965.

“My concern,” he said, “is to rebuild so we don’t have an instant replay” of the rioting. “I don’t think it’s going to take 27 years for it to happen again.”

The bill itself would not create redevelopment areas or set aside property tax funds for reconstruction. Patterned after similar “fast-track” legislation approved for Oakland after last year’s fires and for Whittier after the 1987 earthquake, it would loosen the rules for redevelopment activity in the target area.

The bill would spawn a number of new redevelopment zones in which low-interest loans, low-cost land or other financial incentives would be available for developers.

Redevelopment works by tapping into county tax revenues. When a redevelopment project is established, the amount of property tax money the county receives from that land is “frozen,” sometimes for as long as 30 years.

As land values climb within the designated area, the increase in property tax revenue goes into a pool administered by the redevelopment agency, which works with developers to bring about new construction.

In theory, the new growth boosts property values, generating more money for development. And when a project is over, the county begins receiving a substantially higher level of property taxes.

Typically, it takes two years to get a redevelopment project under way because of strict state requirements for environmental study and citizen participation. But under the Tucker bill, new projects could be started in places such as Koreatown or South-Central Los Angeles in only six months, legislative analysts say.

With initial planning scarcely begun, the CRA envisions up to 10 or more projects scattered through the riot-torn region.

“This is exactly the type of help (Rebuild L.A.) needs from Sacramento . . . to begin the immediate rebuilding of businesses, affordable housing, community centers, child care and other facilities,” Ueberroth wrote in a July letter to Gov. Pete Wilson, urging the measure’s adoption. “I am counting on redevelopment as one of our prime rebuilding tools.”

Bradley, in a similar letter, cited “broad-based community support” for the bill, whose proponents include the National Assn. for the Advancement of Colored People, First African Methodist Episcopal Church, the Korean Chamber of Commerce and many other community organizations.

E. Grace Payne, executive director of the Westminster Neighborhood Assn.--a Watts community center that provides emergency food, shelter and child-care services to low-income residents--said the bill is essential.

“We need whatever it takes to get people building in this community and get jobs back,” she said. “That’s the main thing; we’re trying to get people back to work.”

But the concerns are numerous.

One of the most important political sticking points is the opposition of Los Angeles County, which gives up about $200 million a year--or roughly 10% of its property tax base--to redevelopment projects, according to county management analyst Delta Uyenoyama.

Based on riot-damage estimates of $500 million to $700 million, Uyenoyama calculated a complex, worst-case scenario in which the public financing of urban renewal through Tucker’s bill would cost the county an additional $841 million over 40 years.

That calculation--which the analyst termed a “very gross estimate”--drew scoffs from city lobbyist Leslie McFadden, who called it “grossly overestimated.” McFadden argued that burned-out buildings are not doing the county any good, and would sit fallow for “Lord knows how long” without redevelopment.

Tucker was equally critical, describing county officials as indifferent to inner-city problems.

“L. A. County has said they really don’t care if South-Central is rebuilt,” the legislator said. “The business can move to somewhere else in L. A. County and they’ll be just as happy.”

The county has tried to accommodate the city by offering to negotiate an agreement by which the county would collect all or most of its property tax money and then lend funds to the CRA, as needed, to assist developers. Such an arrangement has been written into a nearly identical bill, AB 598. It would facilitate redevelopment in much of Long Beach and Signal Hill.

The bill, carried by Assemblyman Dave Elder (D-Long Beach), has cleared the Senate without the political rancor of the Tucker bill and is considered much more likely to be approved.

County lobbyist Bill Siverling said the difference between the two bills’ prospects may be the sheer magnitude of the problems in Los Angeles. “It’s a big, big project,” he said. “The higher the stakes get, perhaps the less you tend to cooperate. The stakes are just so much higher here.”

Complicating the picture has been the widespread feeling in Sacramento that Los Angeles does not deserve to be compensated for damage caused by its residents, acknowledged city lobbyist McFadden.

“There’s a whole perception out there that this (belongs) in a different category,” she said, even though innocent people lost their jobs and businesses. “I’ve been really surprised by the intensity of the opposition.”

Inner-city homeowners, meanwhile, have based most of their objections to Tucker’s bill on the history of stormy relationships between citizens and the CRA and the seemingly diminished role residents might play in shaping new construction.

In normal redevelopment projects, state law requires the election of a Project Area Committee, a citizens group that helps to write the overall plan for growth. The area committee has the power to veto a final plan, killing it unless the action is overridden by a two-thirds vote of the city council.

Instead of an area committee, fast-track redevelopment usually requires only an advisory committee holding no veto power. Although public outcry has caused Tucker to say he will add language to his bill mandating project area committees, residents still point to cases in which committee elections organized by the CRA have ended in bitter allegations of fraud and favoritism toward developer interests.

In North Hollywood, an area committee candidate once ran unopposed--but, because of quirky election rules set by the CRA, still lost. He did not get the required 50% of all votes cast in the election.

The seat remained unfilled.

“I don’t like the bill at all,” Hollywood activist Chris Shabel said of Tucker’s legislation, expressing fear at placing such vast territory within the CRA’s grasp. Her Hollywood area committee was shut down three years ago by Los Angeles City Councilman Mike Woo, who replaced the group with an advisory committee, Shabel said.

The Hollywood area committee still meets, passing motions and taking stances on redevelopment. But the actions carry no political weight. And there is no guarantee, Shabel said, that project area committees created in the inner city will not be treated the same way.

“I understand (Tucker) is trying to make changes” in the bill, Shabel said. “(But) we’ve been promised a lot of things. It’s one bill that definitely . . . should be tossed out.”

In its original form, the bill encompassed a dozen redevelopment projects, including those in Hollywood, Watts and downtown Los Angeles. Those projects could be changed or expanded if the city could prove that they would impose no substantial financial burden on the county.

Tucker, however, said he may redraw the boundaries to exclude Hollywood--a project one aide described as a “lightning rod” for controversy.

Los Angeles City Councilman Mark Ridley-Thomas, who called himself a frequent critic of CRA blunders, nonetheless supports the bill. He said it would be an important tool that ravaged communities desperately need.

“Those who wish to continually bang on the CRA have to find some other venue to do it,” said Ridley-Thomas, chairman of the City Council’s Ad-Hoc Committee on Recovery and Revitalization. “Too much is on the line at this point. This is far too important.”

The Recovery Act at a Glance

THE BILL

AB 394, sponsored by Assemblyman Curtis Tucker (D-Inglewood).

PURPOSE

To create a “fast track” for redevelopment in riot-damaged portions of Los Angeles and neighboring cities. Within the 150-square-mile target area, new redevelopment projects could take shape in six months, rather than the two years most projects now require. As redevelopment areas were created, property tax money would be pooled to provide financial incentives for construction.

MAJOR PROVISIONS

Property condemnation: Redevelopment agencies would have the power to acquire private property at fair market value if the land is deemed essential to developers. Last-minute amendments are expected to shield residential areas from condemnation.

Environmental review: Redevelopment project areas could be established before an environmental study, which could be delayed up to 18 months. However, individual construction projects, such as new malls or office buildings, would have to meet existing requirements for environmental impact reports.

Citizen review: Under expected amendments to the bill, citizen advisory panels would help determine the boundaries of each new redevelopment area and hold veto power over plans developed for those areas.

Tax funding: The bill removes some of Los Angeles County’s power to challenge the use of property taxes in redevelopment areas. According to county estimates, the law could divert up to $800 million from the county general fund over the next 40 years.

Existing projects: Current redevelopment areas, such as those in Watts and downtown Los Angeles, could be expanded.

Source: David Kiff, consultant to the California Senate Local Government Committee

Redevelopment on the Fast Track

Legislation to rebuild riot-torn Los Angeles would create a “fast track” for redevelopment projects within a 150-square-mile area encompassing downtown, Koreatown, South Los Angeles, Watts and neighboring cities of Compton, Gardena, Hawthorne, Inglewood and Lynwood. Map shows the existing redevelopment projects within the boundaries of the new target area.

1. Hollywood 2. Chinatown 3. Little Tokyo Central Business District Bunker Hill 4. Pico Union 1 and 2 5. Adams Normandie 4321 6. Normandie 5 7. Hoover/Hoover Expansion 8. Crenshaw 9. Watts