Conversion of Navy Property Attacked on Two Fronts : Redevelopment: Lakewood says that shopping center proposed for hospital site would hurt the economy. Use of state revitalization zone law is also questioned.

Lakewood officials have turned their quiet opposition into a full-fledged campaign to stop Long Beach from converting surplus Navy property into a shopping center that would compete with the Lakewood Center Mall.

Lakewood leaders recently flew to Washington and Sacramento to try to convince federal and state officials that the region would suffer economically if the surplus property is turned over to Long Beach.

Lakewood supports a competing proposal to turn the U.S. Naval Hospital over to the County Office of Education to use as a headquarters.

Lakewood has enlisted the support of neighboring Hawaiian Gardens and is urging other cities to join the crusade.

The Navy has been accepting applications for the surplus property for several months. Officials have not set a deadline for a decision, but expect the hospital to close by the end of the year.

Long Beach contends that a new shopping center, featuring high-volume, low-cost retailers such as Costco and Sportmart--would create thousands of jobs to bolster the local economy.

But Lakewood recently commissioned an economic study that indicates that the proposed shopping center would not help the area’s stagnant economy. Consultant Alfred Gobar contends that a new center would draw customers from stores in neighboring communities, damage their economies and possibly even cost jobs.

The stakes are high for Lakewood, where sales tax from the Lakewood Center Mall provides about $3 million a year to pay for police, fire and other municipal services.

The Naval Hospital is at 7500 E. Carson St., just west of the San Gabriel River Freeway and south of Lakewood, about three miles from Lakewood Center Mall.

“Nobody denies it’s good for Long Beach, that it will bring jobs to Long Beach,” Lakewood City Administrator Howard L. Chambers said in an interview. “But you’re shifting jobs from one place to another.”

Lakewood officials made their argument last month to acting Assistant Secretary of the Navy Frederick S. Sterns. The Navy will decide who gets the property.

In a recent interview, Sterns said the Lakewood study has raised questions about the Long Beach proposal, which once was considered a sure-fire creator of jobs.

“We were caught a little off guard,” Sterns said. “There obviously are differences in viewpoint . . . and we’re trying to sort this out.”

Long Beach officials, who have the backing of Rep. Steve Horn (R-Long Beach), say the proposed shopping center will help make up for the economic losses that will come with the closure of the Long Beach Naval Station and related facilities by the end of next year.

Long Beach officials have decided to commission an economic study of their own.

“You’ve got a desperate action by a desperate city,” said Long Beach Vice Mayor Jeffrey A. Kellogg, who also met with Sterns. “This attempt by Lakewood is unprecedented. You’ve never seen a neighboring community this intent on stopping a project and using every excuse possible to say it’s unworthy.”

Lakewood also is attacking Long Beach on a second front, complaining to state officials that the city has abused legislation aimed at helping areas damaged in last year’s riots.

The legislation enabled the creation of revitalization zones to provide tax benefits to developers who build in areas affected by the riots. The Navy hospital is in Long Beach’s revitalization zone.

Lakewood officials say they have a couple of problems with that. First, the incentives provided through the zone would lower the cost of doing business in the proposed center, giving it an edge over competitors.

And, the hospital and surrounding area was untouched by the riots.

“I don’t think that was the intent of the revitalization program,” Lakewood Councilman Robert G. Wagner said.

But Long Beach officials say their revitalization zone is legal, noting that it won state approval.

“We didn’t know there was a problem until Lakewood fabricated one,” Assistant City Manager John F. Shirey said.

But Lakewood’s complaints have caught the attention of Assemblywoman Marguerite Archie-Hudson (D-Los Angeles), author of the revitalization zone legislation. Archie-Hudson, who said she would review Long Beach’s revitalization zone, is concerned that it may include too much area untouched by the riots, even if the boundaries were approved by the state Department of Commerce.

“We’re concerned because we want to make sure that all the maps follow exclusively the boundaries outlined” in the bill, Archie-Hudson said.

Long Beach officials vowed to press forward with their proposal to tear down the hospital and build the shopping center.

The land for the hospital once belonged to Long Beach. The city sold 34 acres for a token $1 to the federal government for the hospital, which opened in 1967. The city also lent another 35 acres, which automatically reverts to Long Beach and would be part of the shopping center.

The Los Angeles County Office of Education wants to acquire the hospital and transform it into its headquarters and training center. The Office of Education provides special education classes, teacher training and other services countywide.

The Lakewood City Council raised the anger of Long Beach officials in May when it passed a resolution supporting the county bid.

The Hawaiian Gardens City Council also backed the county plan and sent a delegation with Lakewood officials to Washington.

But Lakewood has been unable to persuade other cities to join the fight.

The Bellflower City Council considered the issue earlier this month but decided to stay out of the fray.

“To get between two cities on an issue is not something we like to do,” said Bellflower Mayor Robert E. Stone, adding that he did not think the economic impact of the center would be significant.

The pending closure of the Navy hospital, the Long Beach Naval Station and other Long Beach naval facilities is the result of a major reshaping of the U.S. military prompted by the end of the Cold War and the need to reduce government spending.

By the time the facilities close, Long Beach will have lost about 17,000 military and 1,300 civilian jobs and about $1 billion a year in economic benefits, city officials estimate.

Times staff writer Mark Gladstone contributed to this article.