A Developer Who Has Learned From His Mistakes

As president of The East Los Angeles Community Union, David Lizarraga has attended dozens of groundbreaking ceremonies, with each as sweet as the next. And so it was the other day in the City of Commerce when TELACU launched its latest project, a 24-unit affordable housing project for the handicapped.

“The people who are going to live here, I call them ‘handy-capable,’ ” Lizarraga told a crowd of beaming federal and local officials. Even the local beauty contest winners--Miss Commerce, Miss Cinco de Mayo and Miss Dodger--were on hand for the event.

The project, scheduled for completion by early 1995, marks another achievement for TELACU, which is celebrating its 25th anniversary. It has grown to become the second-largest minority-owned business in Los Angeles County, with more than $300 million in assets.

TELACU has been involved in the construction of more than 1,000 affordable housing units from East L.A. to the Inland Empire, and there are a lot of folks who are grateful that the developer has taken an interest in their communities. Still, in the minds of many, Lizarraga and his company are lepers.

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It’s been more than a decade since TELACU--originally established as a social service organization--was accused of misspending public funds.

In 1982, an investigation by The Times disclosed that some TELACU officials indulged themselves with big salaries, fancy cars, personal loans, worldwide travel and plush accommodations. Federal auditors also found that although TELACU received $1 million from the federal government in 1981 to make low-interest loans to poor people in rural parts of California, it failed to make a single loan. The money instead was invested in high-yield certificates of deposit.

A year after the disclosures, a Los Angeles federal judge ordered TELACU to pay back $1 million to the federal government.

At the time, I was a reporter covering the Eastside, and even though I was supposed to be neutral, I felt betrayed. The people running TELACU were supposed to help the barrios that nourished them, not line their own pockets.

Although no one went to jail, the episode put a dark cloud over TELACU’s name. Stung by the publicity, a contrite Lizarraga remained as president and promised to make good on the group’s pledge to bring industry and jobs to East L.A.

In the years since the scandal, TELACU has developed two industrial parks, one in East L.A. and the other in Compton. It teamed up with the U.S. Department of Housing and Urban Development to build more than 1,000 low-income housing units for the disabled and senior citizens. The financing for the latest project on Gage Avenue in the City of Commerce, for example, includes a $2-million HUD grant.

TELACU also runs a community thrift and loan, a utility company that does power and telephone work, a roofing and building supplies firm, a scholarship program that has awarded more than $1 million to Eastside high school graduates, and the Tamayo restaurant.

The scholarship program has won over some former critics. “I give them credit,” said one East L.A. official, “they’re trying to help the community.” But others remain unconvinced.

Olvera Street restaurateur and activist Vivien Bonzo distrusts the developer on a number of counts, alleging that it tried to use its ties with L.A. City Councilman Richard Alatorre to muscle in on plans to revitalize the tourist attraction.

“They’ve forcibly tried to take over Olvera Street,” she said. “If they wanted to earn respect in the Latino community, that wasn’t the way to do it.”

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Although Lizarraga has grown weary of reporters, he was willing to chat after the groundbreaking. He didn’t flinch when I raised TELACU’s past.

“It seldom comes up,” Lizarraga insisted, “but it’s something that’ll always be there. We just keep on truckin’. We just keep trying to do good work. You know, we employ 1,500 people. We’re working hard on bringing jobs into the area.”

As he ticked off TELACU’s accomplishments, I realized that it doesn’t make sense to keep saddling the organization with baggage from a scandal that happened more than a decade ago. TELACU has kept its nose clean over the years, learning its lesson of how to properly handle public funds allocated for sorely needed projects. In the process, it also has kept its promise to the Eastside.

Although some may not agree with its choice of political friends, TELACU has shown, through its involvement with the City of Commerce project and others, that the time has come to give the developer the forgiveness it has earned.