L.A. Boosts Commitment to Blythe Street : Panorama City: The council agrees to a $3.5-million loan to help revitalize the gang-infested neighborhood.

The city of Los Angeles has agreed to quadruple its financial commitment to building affordable housing on Blythe Street in Panorama City, despite concerns that the project lacks the community involvement it needs to succeed.

By an 11-0 vote, the Los Angeles City Council on Tuesday agreed to loan $3.5 million to the developers of a 50-unit, two- and three-bedroom apartment complex for low-income households that’s seen as a rallying point for the transformation of the drug- and gang-infested street. Most of that money was to have come from state housing bonds, but stiff competition for the money squeezed out the Blythe Street project.

The housing project, which has a total cost of $7 million, is to be built by Blythe Street Partners, a group consisting of the nonprofit Latin American Civic Assn. and the Nelson Network, a private developer.

But even as the city deepened its financial involvement in the project, a top city housing official said Wednesday that Blythe Street’s estimated 5,000 low-income Latino residents have yet to join city efforts to remake their neighborhood.

“It’s critical that they be involved if we want to improve the whole block,” Robert Moncrief warned. “But that element isn’t there yet.”

Moncrief, housing director in the city’s Housing Preservation and Production Department, said a seminar last week on the topic on revitalizing the area failed to attract any residents.

Ralph Arriola, executive director of the Latin American Civic Assn., said that until now his group has not had a credible pitch to make to residents to get them involved.

The association, a veteran social service group that runs Head Start programs in the San Fernando Valley, has the prime responsibility of organizing the community to join the revitalization effort.

The association and a nonprofit development company had been working on a much more ambitious project that would have involved the purchase and rehabilitation of most of the 41 run-down apartment buildings on a block-long stretch of the street just west of Van Nuys Boulevard. But that project, known as Project Renaissance, was largely abandoned because of a lack of support from city officials.

“Now that we have something substantial from the city, we can go to the residents and ask for their support,” Arriola said. Arriola acknowledged that “if the residents don’t buy into the revitalization effort, it’ll never work.”

David Mays, chief deputy to Councilman Ernani Bernardi, who represents the area, called the Nelson Network project “the only new construction project on Blythe Street in recent memory.”

The developer is to be paid a $500,000 fee up-front for his work.

Two years ago, the city planned to make a long-term loan of only $745,000 to the project, which is now known as Regency 50. A year ago, the city made a short-term loan of $1,038,100.

The Nelson Network was to obtain $2.3 million in low-interest loans from the state for a substantial portion of its permanent financing.

But the developer narrowly failed to get that money and turned to the city for financial help. The competition for the state money was “incredibly rigorous,” state officials agreed, because the nation’s credit crunch as well as the demand for affordable housing has caused more developers of such housing to seek public financing.

The city already has loaned $348,000 to rehabilitate a 48-unit apartment project across the street from where the new project will be built.

Genny Alberts, owner of those units, agreed with Arriola that a key to revitalization is cleaning up four other gang-infested apartment buildings on the street.

“If we don’t do something about them, nothing will happen, because that’s where a lot of the gang kids live,” Arriola said of the other properties.

The Latin American Civic Assn. is looking for city or other government funding to help rehabilitate those buildings.

Moncrief was pessimistic about the availability of city funds for the project. “We really need to address these very distressed properties if we’re going to move the block forward,” Moncrief said. “But these will be especially expensive and the city can’t bankroll the entire block.”