CRA Backs Spending for North Hollywood Redevelopment Plan : Project: Citizens advisory panel urges board not to raise the amount, arguing it has been a waste of money.

Despite opposition from a citizens advisory group, a Los Angeles redevelopment panel took the first step Thursday to dramatically increase spending limits at a North Hollywood redevelopment project and extend by 12 years its power to condemn property.

Without the spending increase, the controversial 16-year project that was designed to revitalize the blighted 750-acre community would run out of funds sometime next year.

But if approved by the Community Redevelopment Agency and the City Council, a so-called plan amendment would lift the spending cap from $89 million to $535 million and continue the project until 2019. The power to condemn property would be extended to 2007.

Members of a North Hollywood Project Area Committee, an elected citizens advisory panel, urged the CRA board not to lift the spending limit, saying the CRA’s work thus far has largely been a waste of taxpayer money.

Maria Fant, the committee secretary, compared the spending increase to members of a losing baseball team who nonetheless get an enormous pay raise. “It just doesn’t make sense,” she said.

Ann Hoyt, a longtime North Hollywood resident, told the CRA board that she is “fearful of giving the CRA power of eminent domain for another 12 years.”

But CRA chairman Dan Garcia tried to assuage the critics, saying the board’s action merely distributes the proposed amendment to all agencies that collect taxes in North Hollywood. “It’s a procedural move,” he said.

A final decision by a joint meeting of the CRA and the council is expected in June.

The CRA has funded improvements in North Hollywood through bond measures that are financed with property taxes generated by new development, a method known as tax-increment financing. Normally, property taxes are split up among the county, local school districts and the city.

Critics of the amendment are most worried about the cost of further work in North Hollywood.

If only tax-increment financing is used, the amendment would raise $185 million for revitalization projects, with the remaining $350 million going to pay for interest on the bonds.

But Lillian Burkenheim, the project manager, said $350 million is the maximum that would be spent on interest. She said that amount could be reduced if other financing options are used, such as grants and private financing.

“We don’t anticipate spending that much but we have to look at the most expensive scenario,” she said.

Because the CRA’s power of eminent domain ran out in 1991, Burkenheim said the amendment would extend the power to condemn property by 12 years, beginning on the day the plan is adopted.

The proposal comes at a time when the CRA faces financial problems due to dwindling tax revenues brought about by the recession, a diversion of about $100 million in CRA funds to help bail out the city and the state and legal challenges to a central business project.

In fact, the CRA is developing an early retirement incentive program to help cut about 41 positions.

An inch-thick CRA report justifies raising the North Hollywood spending limit by saying: “Progress has been substantial, but much remains to be done to complete the goals of the North Hollywood Redevelopment Project. Blighting influences remain throughout the project area, inhibiting further private investment.”

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Burkenheim said the redevelopment project has been hampered by the recession, an increase in the cost of real estate and the loss of several major employers in the Valley, including the aerospace and automobile manufacturing industries.

Nonetheless, since it was first adopted in 1979, the redevelopment project has rehabilitated 836 homes and apartments for low- and moderate-income families, built 865 new units, and constructed 469,000 square feet of office, retail and parking space, according to the report.

The proposed spending increase would help finance 29 new projects, many of which, Burkenheim said, were proposed as the result of suggestions offered at community workshops.

According to the CRA report, these projects include loans to rehabilitate about 240 homes and apartments for low- and moderate-income families, funds to upgrade street lighting, subsidies for commercial developments, money for business attraction programs and $49 million for public improvements, such as street widening and landscaping.