Planned Senior Citizen Units May Be Scuttled : Housing: Officials want to scrap a proposed 190-apartment complex, saying it will take millions of dollars more for development in a location that isn’t very suitable.

Over the years, community redevelopment projects in Hollywood have generated nearly as much commotion as who should get the next star on the Boulevard.

There was the decision to beautify Hollywood Boulevard by replacing mature ficus trees with palms. Then the Los Angeles Community Redevelopment Agency proposed spending $175,000 for street paintings that would soon be erased by traffic. Oh, and there was the $500,000 to resurface a quarter-mile of Hollywood Boulevard with something called glassphalt, to make it glitter.

Now controversy has beset another redevelopment project--a planned 190-unit senior citizens housing development at Hollywood Boulevard and Western Avenue.

Three years ago, the CRA authorized $5.1 million in loans and other funding to begin a commercial and senior citizens housing complex on the three-acre site. The mix of retail and residential space was touted as a model for redevelopment that would transform one of Hollywood’s bleaker corners.

But today, with all the money disbursed, officials want to scuttle the housing portion of the project, concluding that millions of dollars more will be needed to build the units and that the location was never suitable for senior citizens housing.

“It was a stupid deal to begin with,” said Sharon Delugach, chief deputy to Councilwoman Jackie Goldberg, who is attempting to scrap the plan. “What was the point of having a major housing development at a corner that wasn’t right and in a project that didn’t qualify for matching federal funds?”

The project, to be built by a group called Hollywest Associates, originally called for 190 units to be built above the commercial space--an 88,000-square-foot retail complex that would also include a supermarket and drugstore. It was pushed by Goldberg’s predecessor, Mike Woo, who left office earlier this year in an unsuccessful campaign for mayor.

Goldberg, who won the 13th Council District seat in July, has been attempting for months to devise a plan that enables most of the commercial development to proceed and redirects the housing to other areas of her district. The first step in that plan will come before the CRA on Jan. 6, when officials review terms of the housing loan to Hollywest’s developer.

Although Goldberg’s office and others have criticized the development of the overall project, Delugach says they do not blame the developer, Ira Smedra. “It’s not his fault,” she said, adding that officials should never have committed so much public money to a private development.

To date, officials say, the $5.1 million distributed for the project has gone for land acquisition and other work that will still be important to make way for the commercial endeavor. That work includes the demolition in July of the 72-room Hotel Rector, a ramshackle boarding house that was closed after being damaged in a 1989 earthquake.

Although the need for affordable housing remains, Jack Gardner of the Hollywood Community Advisory Committee agrees that the city should scuttle the planned housing at Hollywest.

“We had concerns about the previous project because it seems like the housing cost per unit was too expensive, the (CRA) subsidy was excessive, the design was not compelling, and the location was not a great one for senior housing,” Gardner said.

“I see Jackie (Goldberg’s) proposed revision to the project as a positive one,” he added.

But under Goldberg’s proposal, which must still be finalized, the money that would have been spent to build housing at Hollywest--more than $14 million--could be redirected to other smaller projects that unlike Hollywest could qualify for federal matching funds from the Housing and Urban Development Department. In that way, they say, up to three times as many affordable units could be built and dispersed, in smaller projects, to benefit several neighborhoods, not just one.

Now, Delugach said, the plan is to develop smaller senior citizens projects--of 70 units or less--that are eligible for HUD funds. “So the CRA and housing department are happy because we saved about $7 million (of their funds) for senior housing somewhere else,” Delugach said. “And we are happy because the money we do spend will be better used--We can get that money on a 3-to-1 ratio, so we will be leveraging $7 million to get $21 million.”

Moreover, Delugach said, the housing will be spread throughout the community, not concentrated in a site where crime problems are common. “That project would have become a senior citizens’ prison,” she said. “No one would have ever wanted to go outside.”

Although Delugach and others said the revised plans for Hollywest should result in a better project, no one is arguing that mistakes didn’t lead officials to the current plan.

“I think,” Delugach said, “we are making the best out of a bad situation.”