Recovery Plan Greeted by Divergent Responses : Valley: Economic and political factors may explain why quake projects aren’t welcomed in all areas.

Despite a massive infusion of federal and local emergency aid, insurance settlements and disaster funding to repair earthquake damage in the hard-hit Sherman Oaks/Studio City area will fall up to $120 million short of repairing all the area’s damage, according to a new study.

So why have 2,100 residents of the well-to-do area, which suffered nearly 20% of the city’s damage, signed a petition and threatened to sue to block the city’s latest quake recovery effort?

And why has that same recovery plan received a warm welcome in the working-class communities of Pacoima, North Hills, Sylmar and Sun Valley, which suffered only 3% of the city’s total damage and face a funding gap of up to $20 million?

Development experts, community activists and city lawmakers cite a combination of factors to explain why two communities recovering from the same disaster have dramatically divergent assessments of the same recovery effort:

* The recovery plan itself. The city of Los Angeles proposes using redevelopment powers in six hard-hit areas of the Valley and Hollywood to provide repair funds. Other redevelopment plans in the city have been plagued by controversy and lawsuits.

* Income levels. Sherman Oaks and Studio City residents earn almost twice as much as residents in the northeast Valley, making it easier for them to qualify for disaster loans and more likely to oppose additional tax-funded programs.

* Trust in elected lawmakers to watch over the plan. Sherman Oaks and Studio City will be without a council member for the first seven months of the project because Councilman Zev Yaroslavsky leaves Dec. 5 to take a seat on the Los Angeles County Board of Supervisors.

The plan for a redevelopment project in Sherman Oaks and Studio City was adopted by the City Council last week over strong community opposition. The plan for the northeast Valley is expected to be adopted today with little opposition.

The plan envisions the six redevelopment zones generating nearly $160 million in low-interest loans and funds to repair streets, parks and other city facilities, such as libraries and police stations. But because funding is created by diverting a fraction of property taxes over a 30-year period, little, if any, money will be offered for nearly a year after the projects are adopted.

Despite this drawback, backers of the plan say the plan provides a “last resort” source for aid for quake victims who fail to get funding from other disaster agencies.

“If we can make a difference in one person’s life, it’s worth it because it’s not going to hurt anyone,” said Yaroslavsky, who took fiery criticism from residents for spearheading the redevelopment plan.

Although some business owners in Sherman Oaks and Studio City supported the plan, a vocal group of homeowners opposed it, submitting petitions and threatening to file a lawsuit after the City Council adopted the plan.

Critics cited the controversial history of redevelopment programs in other areas of the city and blasted the work of the city’s Community Redevelopment Agency, which some critics compared to an invading army.

They noted that other projects in North Hollywood and downtown Los Angeles have sparked lawsuits and charges of overspending, waste and bureaucratic delays.

To hear some Sherman Oaks and Studio City residents tell it, quake-ravaged buildings in that community are quickly being repaired and a new government aid program is not needed.

“If you could take the chance to drive through Sherman Oaks, I think you would see why I personally feel we don’t need” the redevelopment plan, said Sherman Oaks resident Barbara Stumpf. “There is tremendous construction under way.”

But in fact, 10 months after the quake, the owners of nearly 60% of damaged buildings in Sherman Oaks and Studio City have yet to get permits to begin repairs, according to the city’s Building and Safety Department. In fact, the damage repair shortfall citywide is estimated at nearly $1.2 billion, according to a study by Keyser Marston Associates Inc., a Los Angeles-based economic consultant hired by the CRA to assess the need for the redevelopment project.

In contrast to Sherman Oaks and Studio City, there has been little opposition from Pacoima, North Hills, Sylmar and Sun Valley residents who have attended public hearings on the matter. Many thanked city officials for offering the redevelopment plan, saying they expect it will provide hope and jobs for economically depressed neighborhoods.

“People don’t understand the opportunity the CRA will provide,” said Steven Martinez, a Pacoima activist. “The truth is we need some help.”

Income was one of the factors at play in molding public opinion on the plan, some city officials and disaster assistance experts suggest.

Sherman Oaks and Studio City are home to television studios, hillside mansions and a thriving business corridor along Ventura Boulevard. Residents enjoy an average household income of more than $73,000, well above the citywide average of $45,700. Less than 10% of the population lives below the poverty rate.

Well-to-do residents are more likely than poor residents to have the cash to make quake repairs and therefore are less inclined to support additional tax-funded recovery programs, the officials say.

In contrast, Pacoima, North Hills, Sylmar and Sun Valley are mostly working-class neighborhoods that are struggling to eliminate gang crime and blight. The average household income is less than $37,000 and nearly 20% of the population lives below the poverty line.

Councilman Richard Alarcon, who represents Pacoima, North Hills, Sylmar and Sun Valley, cited income as one of the factors that shaped his constituent’s support for the plan.

“The people in my district, they know that they don’t have the resources,” he said.

But others discount income as a factor, saying a more important factor is how sensitive residents are about development issues and how much control they fear the CRA will have over construction in their neighborhood.

The biggest bugaboo of redevelopment has been the power of eminent domain it bestows on the CRA, allowing it to condemn private land within project areas to make way for redevelopment.

But in the earthquake redevelopment zones, the power to condemn will be strictly limited to abandoned properties.

Bobbi Fiedler, a member of the CRA board of commissioners who attended many of the public hearings on the redevelopment plans, said she believes some Sherman Oaks and Studio City residents oppose the redevelopment plan because they fear they will lose some control over local development.

In contrast, residents in Pacoima, North Hills, Sylmar and Sun Valley hunger for new development to occupy empty, trash-strewn lots and have opposed few, if any, proposals to build new housing or commercial ventures.

With the redevelopment plan, “they don’t feel like they have anything to lose and for the first time they have something to gain,” Fiedler said.

Irene Tovar, head of nonprofit the Latin American Civic Assn. in Pacoima, agreed.

“We need affordable housing and centers where people can meet,” she said. “We have the least amount of development but the greatest need for certain types of structures.”

William Carlson, executive director of the nonprofit California Redevelopment Assn., said he has seen opposition for redevelopment plans sprout in poor and rich neighborhoods alike throughout the state. But he said support is most likely to come if residents trust their local officials to monitor the program.

Indeed, critics of the redevelopment plan in Sherman Oaks and Studio City say they oppose the plan because Yaroslavsky’s seat will be vacant for seven months until a successor is elected in July.

Matt Epstein, a vocal opponent of the redevelopment plan in Sherman Oaks and Studio City, suggests that residents in the northeast Valley support the plan simply because they haven’t studied it enough to see the flaws in it.

Esptein said that his group hired lawyers and others to review the redevelopment plan in Sherman Oaks and Studio City and are aware of its pitfalls. “We did our homework,” he said.

Alarcon said he was offended by Epstein’s suggestion that his constituents support the plan out of ignorance. He said residents in his district packed community hearings and asked intelligent questions before forming an opinion.

Leslie Yamashita, head of the Panorama City West Neighborhood Assn., which is included in the northeast Valley plan, said her group decided to support the redevelopment idea after talking to community leaders and people involved in other redevelopment projects throughout the city.

“The feedback has been more positive than negative,” she said. “Basically, the people in our area have not taken the personal approach of worrying what it’s going to do for them but for what it will do for the entire community.”