City Explores CRA Role in Earthquake Projects : Recovery: L.A. council orders the redevelopment agency to study the use of property taxes in the rebuilding effort.

Residents and business owners who were hit hard by the Northridge quake could find themselves part of a redevelopment project by year’s end, based on a Los Angeles City Council decision Tuesday.

The council voted unanimously to instruct the Community Redevelopment Agency to study the possibility of establishing emergency redevelopment areas where property taxes could be used to help rebuild neighborhoods and businesses.

The cities of Santa Monica, San Fernando and Santa Clarita have already turned to the redevelopment process to help in quake recovery. Redevelopment areas also were established in San Francisco after the Loma Prieta quake and in Coalinga after its 1983 quake.

The exact size and location of the redevelopment areas in Los Angeles have yet to be decided, but nine council districts in the San Fernando Valley, Hollywood and central Los Angeles will be studied.

Some council members have already broached the idea with constituents during community hearings, but the city is moving ahead cautiously, clearly aware that redevelopment projects have long generated controversy, and in some cases, litigation.

In fact, soon after the city of Santa Clarita set up an earthquake redevelopment area, it was stung by two lawsuits from a local water agency, which said the plan would siphon off tax dollars needed to repay water agency bonds and other debts.

“Whenever you talk about redevelopment there are people who are vehemently opposed,” said Erin Rodewald, press deputy to Councilman John Ferraro, whose district includes the 12-year-old North Hollywood redevelopment project that has had a stormy history.

The emergency provisions of the state’s redevelopment law allow city redevelopment agencies to establish areas in disaster zones without the time-consuming environmental study required to establish traditional project areas.

Under the law, local redevelopment agencies can keep all the additional property tax generated by new construction in a project area, then use that money for improvements such as new streets and sewers, and even loans for quake victims.

Because the proposal falls under state emergency provisions, such areas must be established quickly--in this case by October or November.

But CRA critics have already blasted the proposal, saying the emergency redevelopment areas will only lead to added bureaucracy and overspending on improvements.

“The bureaucracy of the CRA makes whatever they do cost three times as much,” said Mildred Weller, a longtime CRA critic and head of a North Hollywood-based marketing company. She also is vice chairwoman of the citizens advisory panel for the North Hollywood redevelopment project.

But the biggest fear among CRA critics is the agency’s power to condemn and take over private property.

City officials have stressed that under the quake proposal, those powers of eminent domain would be available only for seizing abandoned property or land that has become a nuisance, where the owner will not or cannot rebuild.

Councilman Mark Ridley-Thomas, whose south Los Angeles district includes three redevelopment projects, acknowledged that redevelopment is often controversial. But he said such projects also can be powerful tools for recovery if public participation is invited.

“You must attempt to facilitate lots of involvement so that there isn’t anything done unbeknownst to the public,” said Ridley-Thomas, chairman of the council’s committee on housing and community development.