City Ready to Pay County for Low-Income Housing : Development: Under a state law, Industry can finance projects nearby instead of building them in the city. Some contend the $1 million payment is premature.

City of Industry officials were expected to transfer the first $1 million today in what could amount to an $8-million yearly contribution to the Los Angeles County Housing Authority.

Under a controversial measure approved by the state Legislature in August, the county will use the money to develop low-income housing within a 15-mile radius of the City of Industry. The transfer exempts Industry from state requirements to build low- and moderate-income housing within its city limits.

Industry city officials sought the transfer, contending that their city is inappropriate for housing development because of its concentration of industry and manufacturing.

But opponents of the transfer, who were narrowly defeated in a state Assembly vote, say it is unwise for the city to transfer the money now because of a pending lawsuit.

“If they transfer the money and the court invalidates the legislation, they would be out the money,” said attorney Jonathan Lehrer-Graiwer.

Lehrer-Graiwer, representing the Industry Civic Planning Assn., filed a lawsuit in 1991 when the city was proposing to meet its housing requirement by building 94 units of low-income housing in neighboring Diamond Bar. The lawsuit contended that the state Constitution requires that cities that receive tax increases from redevelopment spend 20% of that money to develop low-income housing in the redevelopment area.

In June, Superior Court Judge Robert O’Brien ruled that Industry could not skirt state law and must build the housing within its city limits. That decision was appealed by attorneys representing the city.

But in the meantime, the original proposal, which included construction of a new Diamond Bar high school, was scrapped. In its place, legislation written by state Sen. Frank Hill (R-Whittier) allowed the city to meet its housing requirement by transferring 20% of its redevelopment tax increments to the county for housing.

The city now plans in its appeal of the lawsuit to assert that Hill’s measure renders the lawsuit invalid. But Lehrer-Graiwer said the Industry Civic Planning Assn. will now argue that the Hill measure violates state law. The association will ask the court to rule the law invalid and thus render the transfer of money invalid.

City of Industry officials could not be reached for comment on the pending transfer, but county officials said they expected to receive the money on schedule. The transfer procedure was speedily and unanimously approved by the Board of Supervisors on Dec. 21.

Because Industry’s annual transfer will be based on property tax increases in the city’s redevelopment areas, the amount will vary, but is expected to reach as much as $8 million yearly, said Sam Lucchese, a county housing authority spokesman.

The Industry addition will provide a substantial boost for the county, which plans to spend $22 million over the next four years to develop low-income housing, Lucchese said.