Redevelopment Plan for Quake Repairs Debated : Recovery: Opposition at community meeting suggests an uphill struggle for the proposal to use agency powers to rebuild.

Supporters and opponents of a proposal to use redevelopment agency powers to rebuild quake-damaged neighborhoods clashed Wednesday at a Sherman Oaks community meeting, forecasting an uphill struggle for Los Angeles redevelopment officials who are pitching the idea.

The meeting--the first of several scheduled throughout the city during the next month--drew a crowd of about 50 residents and business owners to Millikan Middle School to hear redevelopment officials explain the proposal and field questions.

Under the proposal, a stretch of commercial and residential blocks along Ventura Boulevard and adjacent neighborhoods in Sherman Oaks and Studio City would form one of six proposed emergency redevelopment zones throughout the San Fernando Valley and Hollywood.

The proposal takes advantage of emergency provisions in state law that allow local redevelopment agencies to establish project areas in disaster zones without completing the usual time-consuming environmental studies.

The law allows the agencies to keep some of the property taxes generated by new construction in a project area and use that money to pay for improvements such as new streets, parks and sewers, as well as loans for earthquake victims.

The instructional meeting quickly turned into a forum for opponents and supporters of the redevelopment plan to debate its merits.

Most of the opponents said they fear the plan will only siphon more taxes away from vital city services without producing much-needed fixes. Supporters, on the other hand, argued that the proposal would give the city another tool to restore damaged commercial and residential neighborhoods.

Matt Epstein, chairman of the Sherman Oaks Homeowners Assn., said his group opposes the plan, in part because there is no limit to how much the city’s Community Redevelopment Agency can spend on administrative costs.

“All I want is to tighten this plan up,” he told the audience.

But Fred Gaines, a Sherman Oaks attorney, argued that the proposal will guarantee that tax dollars will be spent in Sherman Oaks instead of going to the city’s general fund to pay for city services on the other side of town.

“The bottom line is that this is just another tool to rebuild the area,” he said.

If approved, the Sherman Oaks redevelopment zone could generate as much as $18.7 million, most of which would provide loans to rebuild housing in the area. However, the redevelopment guidelines require that 20% of housing repaired with the funds be set aside for tenants with moderate or low incomes.

The final decision on whether to establish the zones is expected to be made Nov. 16 at a joint meeting of the City Council and the Community Redevelopment Agency.

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The most controversial element of traditional redevelopment projects elsewhere in the city has been the power redevelopment officials have to condemn and acquire private property. To quell fears about the abuse of such powers, city officials have promised that the power to condemn properties in the proposed quake rehabilitation zones will be used only in extreme cases.

But that did not appease many speakers at the hearing. Some suggested that the city give residents and landowners some authority over the rebuilding efforts.

Chuck Betz, who owns apartments in Sherman Oaks, said he feared that the CRA would condemn apartment buildings if the owners want to delay rebuilding until the demand for housing increases.

“We feel these people have a right to wait for a market to come back and not be forced to go into debt when there is no market,” he said.