Plan to Build 239 Condos Put On Hold : Encino: Backers blame red tape. They will decide by the end of March whether to include homes in the controversial complex.

Discouraged by red tape and the depressed housing market, Imperial Bank executives are rethinking a controversial plan to build a $52-million complex of shops and condominiums on a vacant lot at Ventura Boulevard and Hayvenhurst Avenue in Encino.

“The combination of market forces, the length of time it takes to entitle an innovative project with the city of Los Angeles and public input have influenced us to reassess our plans,” senior bank Vice President David Blitz said in a Feb. 26 letter to Encino residents.

Blitz said the bank, which worked on the proposed complex for nine months, is now also considering more traditional projects for the site, such as the supermarkets and office and retail centers that now line Ventura Boulevard, the major commercial thoroughfare of the Valley.

The original proposal, however, has not been ruled out. Blitz said the bank expects to make a decision by the end of the month.

Already though, some residents who oppose the project are claiming a major step toward victory.

“They were trying to ramrod this thing through,” said Gerald A. Silver, president of Homeowners of Encino. “I think they finally realized it doesn’t make sense in this community to do that.”

Silver and others had complained that the 490,000-square-foot project was far too dense for the 5.8-acre lot, which abuts a residential neighborhood. They also argued that the new residents it would attract would overload the services offered in Encino.

But Imperial Bank--which foreclosed on the lot after the previous developers declared bankruptcy more than a year ago--touted the project as an innovative design that incorporated many suggestions made by residents.

The Inglewood-based bank proposed building 239 condominiums. A 45,000-square-foot supermarket and 1,097 parking spaces would be hidden underground. A 5,000-square-foot community center and a public park were also to be built on the lot.

Aware of the opposition that past proposals had faced, the bank held a number of community meetings for residents to share their ideas. In January, the bank even offered to take residents on field trips to other Southern California projects that mix residential and retail uses.

But the invitation was followed by the letter from Blitz telling homeowners that the project was on hold.

The bank is re-evaluating the project, in part, because of the cumbersome process needed to get permits from the city, officials said. The bank would need 14 separate approvals from four city commissions, said Craig Lawson, a land-use consultant hired by the bank.

Chief among the needed approvals would be an exception from density and height requirements set by the Ventura Boulevard Specific Plan, a land-use document approved two years ago to control growth along the thoroughfare. The project planned is 26% denser than allowed, and some of the buildings are 60 feet tall, 15 feet higher than the cap set by the Specific Plan.

Lawson said it could take up to two years to complete an environmental review and get the necessary permits, during which time the land remains vacant, producing no revenue.

“We don’t know whether it will be approved or not,” Lawson said. “If it is approved, it will have so many conditions of approval and mitigation measures that it may be financially impossible to actually build the project.”

In addition, the city has required a more extensive environmental review than the bank anticipated, and there is concern about the cost of widening streets and improving intersections to handle the traffic impacts of the project, Lawson said.

The Imperial Bank project was the latest in a long line of plans for the property, a focus of neighborhood controversy.

In 1988, Encino homeowners fought a plan to build a 377,000-square-foot building with a six-screen theater on the site. At the time, the proposal met all zoning requirements.

But, working with Los Angeles City Councilman Marvin Braude, residents persuaded the city to require an environmental study that postponed the project more than a year. The delay drained the developer’s finances, and Imperial Bank, the lender on the property, eventually foreclosed.

The bank had hoped that obtaining the necessary permits from the city would make the property, which it wants to sell for $18 million, more marketable, Blitz said. Now, Blitz said, the bank is more open to selling the property to a developer earlier in the process.

“We don’t want to end up with a project that has limited appeal, or no appeal,” he said.