Alarcon Brings New Vigor to 7th District : Business: Leaders laud the councilman’s renewal effort but say it’s not enough to turn around the beleaguered area.

For years, former City Councilman Ernani Bernardi fumed that his 7th District in the northeast San Fernando Valley had been ignored by the city and used as the dumping grounds for many undesirable city projects.

And despite various programs to promote economic revival, Bernardi’s district has continued to hold the dubious distinction of having the Valley’s highest unemployment rates and lowest income levels.

When Bernardi retired this year after 32 years on the council, the district and its daunting troubles were inherited by Councilman Richard Alarcon, an energetic former mayoral aide who vowed to make economic renewal a priority of his stewardship.

But can a freshman councilman with a head full of new ideas and an enterprising young staff initiate an economic revival in a district that has long suffered from blight and economic decay?

Probably not, say business owners and community leaders in Alarcon’s district. But they expect some improvements thanks to the new energy he is injecting into several stagnant economic renewal programs.

“I think some improvements can be made,” said Alex Nuno, city coordinator of the Northeast Valley enterprise zone, a state program that uses tax incentives to promote economic revival. “The councilman has the right approach. He’s looking at the enterprise zone as one tool of many to stimulate the economy.”

Indeed, Alarcon’s efforts in his first six months in office have focused on re-energizing and reorganizing several economic renewal programs that have been in place years before he was elected.

These programs include the enterprise zone; a revitalization zone established after the spring riots that also uses tax incentives to promote business renewal; a $5-million trust fund created by the city to pay for improvements in communities around the city-owned Lopez Canyon landfill; a transportation corridor program to build transportation centers, and a task force to find a new occupant for the vacant General Motors plant in Panorama City.

One example of Alarcon’s efforts was his move to restructure an advisory committee for the enterprise zone by forming eight subcommittees to concentrate on topics such as transportation, infrastructure and marketing of the zone.

“Alarcon brings new energy to it all,” said Penny Flynn, a Canoga Park-based planning consultant and member of the advisory group. “He’s working hard to get all the components of the community involved.”

Businesses in enterprise zones can obtain tax credits totaling $19,110 over five years for each unemployed person they hire from certain government-sponsored job training programs. Additionally, manufacturers can deduct from their state income taxes an amount equal to the state sales taxes they pay on equipment purchases, and banks can get a tax break for lending to businesses in the zone.

Thus far, however, the enterprise zone has had mixed success, creating only 212 jobs in its first four years and providing only eight low-interest loans, totaling about $1.4 million.

Alarcon also plans to make changes in the General Motors task force by adding the owners of nearby businesses to the group. The task force currently only includes government representatives in its membership.

But he has also backed new efforts, such as a proposal to spend $500,000 to have the city’s Community Redevelopment Agency study ways to revitalize Pacoima and adjacent areas. That idea was approved in October by the City Council.

It remains to be seen whether the study will lead to a full-fledged CRA project. Such a designation would give redevelopment authorities the power to acquire property through eminent domain proceedings and take a share of property tax revenues from the areas to finance improvements.

Although Bernardi was notoriously leery of government programs such as redevelopment projects, Alarcon said he is willing to consider any idea to revitalize his district and he wants the various programs to work together, not separately as they have in the past.

“I am an elected official of a government agency and it’s my job to use all the tools available to me,” he said.

Alarcon also is considering establishing commercial transportation centers near the Metrolink railroad tracks along San Fernando Road near Sunland and Van Nuys boulevards. The city, he said, may qualify for federal grants to develop commercial and housing projects around the rail centers.

The councilman said he also hopes to improve conditions for residents by using his position as chairman of the City Council’s Public Works Committee to see that his district gets more street lighting and street maintenance.

He has said that only 30% of streets have street lights in his district, compared with 50% citywide. Alarcon says he also wants to concentrate on such blights as abandoned cars. In the past two or three months, he said, 850 abandoned cars have been towed from his district.

“So much of what government is supposed to do doesn’t get done here,” Alarcon said.

During a tour of his district, Alarcon tried to break the negative stereotype of the Northeast Valley by pointing out some positive features such two golf courses, a baseball center built by volunteers on land donated by a developer and Mission College, a community college with a well-manicured campus.

He also spoke proudly about several large firms in his district, such as Siemens Pacesetter Inc., a leading producer of pacemakers and other medical equipment, Kaiser Permanente’s regional laboratory in North Hollywood and Precision Dynamics Corp., a San Fernando firm that makes disposable medical products.

“If they are in my district, there must be something good going on,” he said.

But clearly Alarcon has his work cut out for him.

His district has the lowest average annual household income level in the Valley at $36,892, compared to $45,701 citywide, according to 1990 census figures. The district also has the highest poverty rate in the Valley, with 19.2% of households living under the poverty level, according to the census. In addition, the census figures show the district had the highest unemployment rate in the Valley, with 9.1%, compared to a citywide average of 8.4%.

The district also suffers from overcrowded housing because the price of housing is beyond the reach of many residents. Census figures say Alarcon’s district has the highest number of people per household, 3.9, compared to 2.8 people per household citywide.

Business owners and others say Alarcon’s efforts and the economic renewal programs may help spark some improvements, but they say the Northeast Valley will only pull out of its depressed state if there is a strong turnaround in the entire state’s economy.

“Are tax incentives enough to solve the economic problems of the entire area? Probably not,” said Jonathan Goldhill, vice president of the Valley Economic Development Center, a nonprofit effort to provide businesses with training and financial assistance.

Goldhill and many business owners in Alarcon’s district suggest federal tax breaks be offered in addition to the state tax incentives to attract new businesses to the area. The city also should provide low-interest loans to start new businesses in economically depressed areas, they suggest.

Yet a recurring complaint business owners make about the enterprise zone is that few business owners--even those within the zone--know about the tax incentives that are available. It is a problem Alarcon vows to address through the advisory group.

But Alarcon points to one company that has taken advantage of the benefits--a company that he said is an example of what can be accomplished in his district. That company is Pacoima-based Ricon Corp., the nation’s largest manufacturer of wheelchair lifts.

Andrew J. Loduha, president of Ricon, said his company has been growing steadily since it was founded in Van Nuys in 1969. It was moved to Sun Valley in 1980, but when the business outgrew its facility several years later, Loduha said he and his partners considered moving out of the state.

States such as Ohio, Tennessee and Missouri tried to lure Ricon away with financial incentives, Loduha said. That is when the partners learned about the tax incentives available in the Pacoima enterprise zone.

So far, Loduha said, the company has accepted tax breaks for 15 employees and has invested about $250,000 on improvements to buildings, saving the company about $40,000 in taxes--enough to buy a new metal-cutting machine.

Besides the incentives, Loduha said he found a building on Montague Street with rent almost three times lower than it would have been elsewhere in the city. And it was still close to where most of his employees live.

Since Ricon moved to the 40,000-square-foot building in Pacoima in 1989, the company has doubled its operation by leasing out a second building on the same block. And its manufacturing output has jumped from 2,500 wheelchair lifts annually in 1987 to 15,000 this year, Loduha said. The company now has offices in England, Norway, Australia and Canada.

Business has increased so much that Loduha said he and his partners are considering buying an entire lot in the next five years to establish a 100,000-square-foot headquarters. And, he said, the facility will probably remain in the enterprise zone.

“We have no intention of leaving the Valley,” he said.