Proposed Super-Agency Would Coordinate Economic Planning

In an attempt to focus and improve Los Angeles’ business promotion efforts, two top city administrators Friday released their plan to consolidate economic development operations from four departments into a new super-agency.

The Los Angeles Economic Development Department could open as soon as April, if the City Council and Mayor Richard Riordan reaffirm their earlier conceptual approval.

The new agency would take over many responsibilities now assumed by the Community Redevelopment Agency, Community Development Department, Board of Public Works and Mayor’s Office. It would be headed by a commission that would plot a business growth strategy and consolidate loan programs now divided among three offices.

The reorganization plan--designed by city administrative officer Keith Comrie and chief legislative analyst Ron Deaton--could cut the city work force by 42 employees.

Officials said the need for such a centralized operation was demonstrated by another event Friday at City Hall.

The City Council approved a plan to divide $60 million in federal loan funds between housing construction and rehabilitation and programs for economic development.

More telling than the decision, several officials said, was the fact that the economic development component of the program has still not been defined, 11 months after the federal government agreed to loan the city the money.

Such inertia would be averted by the new Economic Development Department, which would function as a clearinghouse for all pro-business initiatives in the city, proponents said.

The agency would be run by a seven-member commission appointed by the mayor and confirmed by the City Council.

Backers said the consolidation would make it easier for business people and others to understand the city’s economic development efforts and for the city to respond to changing conditions.

“This is how we can be far more effective in articulating a vision for economic development and laying out a work plan to do it,” said Councilman Mark Ridley-Thomas, who led the move to streamline the bureaucracy. “It’s a recognition that what we have done to date has been inadequate.”

The City Council’s separate action Friday on the $60-million federal loan fund should also begin to instigate economic activity, council members said.

The federal budget includes $2 billion for cities to borrow against future grants they will receive from the Department of Housing and Urban Development. Rep. Maxine Waters (D-Los Angeles) had been instrumental in creating the program.

Los Angeles’ $60-million share was approved in February for use throughout riot-torn neighborhoods. Since then, little has been done to spend the money, despite the region’s continuing economic deprivation.

The city’s Housing Department stepped into the void, suggesting it could use as much as $40 million of the money to refurbish homes and to build new ones. The proposal was backed by Ridley-Thomas.

But Waters was disturbed that money would be diverted from economic development, which she considers the area’s greatest need. “They had not developed any economic development programs,” Waters said. “It was very frustrating.”

Eventually, Waters and city officials agreed to split the money between the housing programs and economic development. Waters said she agreed to the compromise because the housing work is ready to proceed, while the business plans are languishing.

The housing funds will help rehabilitate about 1,630 houses and apartments and build 375 new homes. Housing Department general manager Gary Squier said the work will have economic benefits of its own, creating jobs.

“This $30 million will enable the Housing Department to substantially turn around deteriorated pockets of the city,”’ Squier said. “And that is essential at a time when the recession is destabilizing our rental housing stock.”

Deputy Mayor Robin Kramer said Riordan’s Administration is looking for ways to use the $30 million in economic development money.

The city does not have much time to dawdle. A specific plan must be submitted by Feb. 28 or HUD will cut off the funds.