Use of CRA for Quake Rehab OKd : Rebuilding: Despite angry protests, council approves redevelopment powers in the repair of hard-hit areas.

Redevelopment powers will be used for the first time to aid in the repair of earthquake-damaged neighborhoods under a plan approved Tuesday by the Los Angeles City Council over the objections of angry residents.

In a unanimous vote, the council established an emergency redevelopment zone on about 700 acres of hard-hit commercial and residential neighborhoods along Ventura Boulevard and adjacent neighborhoods in Sherman Oaks and Studio City.

It is the first of six such zones being considered for quake-ravaged neighborhoods in the San Fernando Valley and Hollywood. The zones use property taxes to provide residential and commercial loans and money to repair public buildings and streets.

Responding to opposition from local residents, Councilman Zev Yaroslavsky, who represents the area, dramatically modified the Sherman Oaks/Studio City plan to immediately initiate a repair program for condominiums but delay all other elements of the program for 11 months, giving the council an opportunity to abort the effort later.

Under the plan, an appointed citizens committee can also vote to oppose elements of the plan. The committee’s decisions can only be overturned by a two-thirds vote of the City Council.

But the modifications did not appease 25 residents who picketed in front of City Hall prior to the council meeting and threatened to sue the city to halt the program.

Critics said they do not trust the city’s Community Redevelopment Agency to spend their tax dollars and wield the power to condemn private property. They said the agency has a controversial history that makes them uneasy.

“Once they get in, you can never get them out,” said Lynn Solky, a Sherman Oaks resident who joined the group that picketed on the steps outside City Hall. One placard labeled the CRA the “Community Robbery Agency.”

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Opponents said they plan to sue, saying that the city has failed to prove that the redevelopment plan is needed and that no other funds or programs are available to repair the quake damage in Sherman Oaks.

Some complained that no one will watch over the CRA once Yaroslavsky leaves his post Dec. 5 to become the newest member of the county’s Board of Supervisors. His council seat will be left vacant until a successor is elected in July.

“For seven months there will be no one to watch over this,” said Roberta Weintraub, a former school board member and a candidate for Yaroslavsky’s council seat.

But in an emotional appeal during the meeting, Yaroslavsky blasted critics, saying the plan is a “last resort” source of aid for quake victims who fail to get funding from other disaster agencies.

“Does the establishment of a redevelopment project help anyone? Yes,” he said, nearly shouting. “Does the establishment of a redevelopment project hurt anyone? No!”

Within the proposed boundaries of the redevelopment area, about 200 businesses and approximately 500 residential buildings comprising 8,000 dwelling units suffered damage, according to city officials.

The 717-acre project will generate just under $18 million to provide low-interest loans to home and business owners. Redevelopment guidelines require that 20% of the housing funds be set aside for tenants with low to moderate incomes, who may be housed within the project area or elsewhere in the city.

The CRA and the council would have limited powers to condemn abandoned and blighted property--a provision that makes many property owners nervous.

A private consulting firm hired by the CRA estimated that the properties within the project area suffered between $50 million and $120 million in damage that will not be covered by insurance money or federal and state grants and loans.

Although a community panel has been working for three months to modify the redevelopment plan, strong opposition from residents has persisted, prompting Yaroslavsky to dramatically rewrite the plan himself last week.

“It has become clear to me that for some people no amount of compromise will be sufficient,” he said.

The plan will provide immediate help for condominium owners because, Yaroslavsky said, many quake victims cannot make repairs to common facilities in a complex after other condo owners have abandoned their units.

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Under the plan, the CRA can buy abandoned condos and make repairs so that the units can be sold. For condo owners who have not abandoned their units, the city’s housing department already offers low interest loans of up to $35,000 per unit.

The other elements of the program--including the sale of bonds to provide home and business loans--will be delayed until at least Oct. 1, by which time a successor to Yaroslavsky will be elected.

In addition to delaying most elements of the plan, Yaroslavsky also reduced the size of the proposed zone by 183 acres by cutting out dozens of Studio City neighborhoods.

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