Rebuild L.A. to Regroup, Refocus and Think Smaller : Recovery: Agency will concentrate on financing businesses. The role City Hall will play remains unclear.

Rebuild L.A., the private agency created as the city’s primary response to the devastating 1992 riots, intends to scale back its agenda at a crossroads in its brief history.

But it is unclear what level of cooperation or clout the extra-governmental organization will have with City Hall now that businessman Richard Riordan has succeeded Tom Bradley as mayor and high-profile RLA co-chair Peter V. Ueberroth has also moved on.

“The expectations that were thrust upon us by the city (last year) were totally unrealistic,” said Tony M. Salazar, one of four RLA co-chairs. “No one could ever expect us to solve all of the social problems, all of the economic problems and all of the political problems as well. Just about anyone who had an issue was coming through our door.”

Rebuild L.A., now officially known as RLA, is in the midst of a restructuring and plans to think smaller on at least two fronts:

Rather than focusing primarily on attracting major corporations to create jobs in neglected neighborhoods--a strategy that has met with mixed success--RLA will work to stimulate the development of small businesses by establishing loan and equity investment funds.

Second, RLA officials plan to streamline the scope of their activities, which have included task forces on issues ranging from job creation to youth programs and affordable health care.

“Now we know what we’re good at, what we can really do and how to have an effect on the inner city,” Salazar said. “So we’re zeroing in on small businesses and financing and obtaining the capital necessary for small businesses to develop in our inner city.”

RLA’s relationship with the new mayor, a businessman who has served as one of the independent nonprofit organization’s 80 board members, remains to be seen, according to William G. Ouchi, Riordan’s special adviser for restructuring the city bureaucracy. However, the mayor has no intention, Ouchi said, of picking up the slack of specific post-riot economic recovery efforts.

“It’s clearly a new chapter that’s not yet written--we’ll see how it unfolds,” Ouchi said. “The initiative lies with RLA, if it has some requests of the mayor, to come to him and ask.”

Riordan had said in May after Ueberroth’s resignation as RLA co-chairman that “if elected, RLA will be a top daily concern of my Administration.” However, since his election victory more than a month ago, Riordan has yet to meet with RLA’s remaining co-chairs.

Riordan, in a pre-election interview with The Times, praised RLA for attracting major businesses to assist in recovery efforts but criticized it for doing a “poor job” in working with grass-roots organizations and coordinating its efforts with City Hall.

“The question is do you blame City Hall or do you blame RLA,” Riordan said. “You’ve got to blame both. But it’s business as usual at City Hall. You’d think since the riots, that (obtaining business permits) and other things would be much easier. It’s the same problems.”

According to Ouchi, Riordan will move quickly to simplify the procedures for granting business permits. But he added that the new mayor is no more likely than Bradley to commit limited city resources to riot-related projects.

“The city is not a bank and if other parties are able to come to the table with financial capital, we have in this city the human capital,” said Ouchi, a UCLA management professor who has taken a one-year leave to work with Riordan.

“The fundamental solution is not in short-term programs that turn our attention for a little while to some of the surface issues that brought on the riots,” Ouchi added. “What we really need to be doing is provide a balanced approach, which, in the short term, you’re providing social services to those in need, and in the medium term, you’re creating an environment that will invite more businesses into the city.”

To help provide a positive business climate, Ouchi said, Riordan will seek to change the permit process so interested firms “don’t have to hire two or three consultants to understand how to work with the city.”

A “one-stop shop” for permits would be “a wonderful achievement,” said Joel K. Rubenstein, a business partner of Ueberroth who has continued at RLA to coordinate its business development activities. But with the bleak Southern California and national economy, it will be difficult for RLA or any other organization to entice major industries to the city’s neglected neighborhoods, he said.

“This is about as bad as it’s been,” said Rubenstein. “There is no magic. To say someone will just come in here and create 1,000 jobs, it just doesn’t happen.”

RLA, with a stated goal of revitalizing the region’s economic and social base, was formed by Ueberroth at Bradley’s behest as the embers glowed in riot-scarred neighborhoods. Ueberroth, whose success as head of the 1984 Olympic Organizing Committee afforded Los Angeles--and Bradley--a golden image in the 1980s, over time developed an organization with four co-chairs and an 80-member RLA board composed of businessmen, politicians and civic leaders.

Before the May resignation of Ueberroth, who attracted contributions and controversy alike with his optimistic pronouncements, the organization said it had received commitments of more than $500 million from firms willing to invest in South-Central Los Angeles. But RLA never itemized the pledges and some major firms that RLA identified last year as intending to invest later told The Times they had no such plans.

In April, an internal report released by an RLA board member, Warner Bros. executive Dan Garcia, criticized the city and RLA for their disorganized efforts in the recovery process. There was “no rhyme or reason to government policy in riot areas,” Garcia reported, and RLA’s “presence has been minimal and its role unclear” for those whose property was damaged in the civil strife.

With Ueberroth and Bradley having stepped out of the limelight--although both remain on the RLA board--some observers have questioned the level of clout RLA will be able to muster--or whether RLA remains a relevant force in the city.

“RLA has to be reorganized to be made relevant,” said City Councilman Mark Ridley-Thomas, a member of the RLA board. “RLA is too cumbersome and ceremonial. And too circumspect.”

But some say that if City Hall undertook coordinated efforts with a more sharply focused RLA, the city’s recovery could be boosted.

“You had a situation where the mayor was orbiting Pluto and said, ‘Peter, you handle this mess,’ ” said Joel Kotkin, an international fellow at Pepperdine University’s School of Business and Management.” . . . I think Ueberroth raised expectations to unreasonable levels, being a larger-than-life figure, particularly in his own estimation.”

“I don’t think anyone puts those expectations on the (current co-chairs).”

In undertaking its restructuring, scheduled to be officially unveiled at a quarterly board meeting late this month, RLA officials have decided to focus primarily on job and housing development, as well as the creation of small business loan and equity funds. RLA will also seek to strengthen its ties to community organizations, some of which have complained that the agency exhibited an imperious attitude toward grass-roots groups in its early days.

“All of us acknowledge that the communication between RLA and its various constituencies in the larger community has been weak and, in many cases, has not existed in the past year and we really want to improve that,” said Linda Wong, who became the fourth RLA co-chair last April, joining Bernard Kinsey, Barry Sanders and Salazar.

RLA’s business expansion loan fund, a separate organization designed to provide anywhere from $25,000 to $250,000 to entice and expand small inner-city firms, is expected to begin operations by summer’s end, RLA officials say. They say approximately $6 million in donations and grants, including a lead grant of $750,000 from Arco, have been committed to the fund, which was announced in April.

Officials say the fund will assist businesses too small or with an inadequate track record to receive bank loans. “We will fill a void that has existed for years,” said Salazar. “(Money will be lent) because of the tenacity of the entrepreneur or because of the character references.”

RLA, which is slated to stay in operation for four more years, is also continuing to develop plans for an equity fund aimed at providing from $250,000 to $1 million in capital for small business expansion projects. “Right now, we’re completing memorandums that will go out to prospective investors probably sometime in August,” said RLA finance coordinator Rena Wheaton.

Since Riordan’s election last month, RLA staffers have held only one meeting with two members of the mayor’s transition team--one of them Garcia.

Garcia, Warner Bros. senior vice president for real estate planning, said he sees a somewhat diminished role for RLA--now one of several nonprofit organizations seeking to bring new businesses and housing to riot-damaged neighborhoods--during Riordan’s tenure.

“He has clearly been encouraging their efforts, as we all have, to rebuild the city,” said Garcia, who served on the city Planning Commission under Bradley. “But now that he’s mayor, he has to figure out what they do and what he does.

“Because Dick Riordan’s campaign platform was security and jobs, it is clear that his Administration will want to play an extremely active role in creating a series of economic strategies for the city. And so RLA, I think, will have much less to do with the formulation of public policy responses needed to stimulate investment in the city.”

“But I believe that RLA’s efforts to attract private capital and stimulate business activity through their loan fund and similar efforts will be greatly encouraged by the Riordan Administration.”