State to Buy Broadway Site : Renewal: Officials plan to renovate old department store complex Downtown for government offices.

The much-delayed plan to rehabilitate decaying Downtown buildings as offices for state workers gained momentum Wednesday as officials announced an agreement to buy the long-vacant Broadway department store complex at Broadway and 4th Street.

Now scarred with graffiti and invaded by squatters, the eight-story structure will have desk space for about 1,700 government employees when an overhaul is completed by 1999. Officials hope the purchase will be the first of several similar state projects in the city’s struggling heart, bolstering other revitalization efforts.

“We are making a major investment in the Downtown core and cleaning up the blighted landscape that the corner of 4th and Broadway has been for 30 years,” said Kevin Eckery, the deputy secretary of the State and Consumer Services Agency who was a key player in the purchase agreement.

Saying it eventually would save money and improve efficiency, the state government announced plans two years ago to move as many as 3,000 employees from rental offices throughout Los Angeles County to central Downtown near the newly constructed Ronald Reagan State Building on Spring Street. Wednesday’s announcement heartened Downtown boosters who feared the plan might have died because of opposition from some resentful state workers and from property owners outside the urban core.

The state is to pay $1.8 million for what was once the flagship of the Broadway department store chain and then spend about $61.5 million from a bond issue for renovation, officials said. Constructed in 1913 and expanded in 1923, the building has been tangled for several years in complicated bankruptcy cases. Its current owner is a financial group headed by the Resolution Trust Corp., although many people still refer to the structure as the Luby Building, after developer Roger Luby, who failed in an overhaul attempt in 1990.

“It’s hard for people who don’t work and live in this part of Downtown to realize the negative impact that building has had on the Broadway corridor. It’s been a block-long slum that divides the Broadway shopping corridor in half and causes enormous dislocation,” developer Ira Yellin said of the former department store, vacant since 1966. The state purchase, he added, “will bring an extraordinary benefit to the economy of the historic core.”

Half a block to the north on Broadway, one of Yellin’s own projects is likely to be a main beneficiary. The $60-million Grand Central Square development, which includes the rehabilitation of Grand Central Market and the Million Dollar Theater Building , is to be finished later this summer, he said. Tenants already are moving into some of that project’s 121 apartments.

Peggy Moore, a commissioner of the Los Angeles Community Redevelopment Agency, said she was excited by the state’s news. The purchase dovetails with the agency’s upcoming restoration of the Angels’ Flight funicular railway linking Bunker Hill to the Red Line station at 4th and Hill streets, she said. The agency and the Metropolitan Transportation Authority are backing $44 million in bonds for Grand Central Square.

The state originally said it wanted to restore three aging Downtown buildings and possibly build another new one near the Reagan complex, which opened in 1990. The Broadway building was chosen as the first because of its proximity to the subway and its large size, open floor plan and 13-foot-high ceilings, which can accommodate telecommunication cables and air conditioning, Eckery said. Studies of other neighborhood buildings will get under way this summer, he predicted.

State offices in Glendale, Pasadena, the Mid-Wilshire district, Cerritos and other locations are expected to move into the Broadway building despite some employee fears spawned by Downtown’s unsavory reputation.

Among the state agencies likely to relocate are the Department of Alcoholic Beverage Control, the Department of Corporations, the Environmental Protection Agency, the Department of Social Services and the Department of Rehabilitation. The ground floor is expected to include retail stores.

Meanwhile, a recent lawsuit brought by a state employees union seeks to close the Junipero Serra State Office Building at Broadway and 1st Street, which an engineering report warned could collapse in a magnitude 7 earthquake. The 1,700 workers in that building should be moved now, the union says. The state, contending that the seismic risk is small, says it may take five years to move the employees to other Downtown locations.

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Boost for Downtoown The state government’s purchases of the long-vacant Broadway department store building is seen as a major step toward moving about 3,000 state empolyees from offices around the county into Downtown Los Angeles historic core. It is hoped that the move will help other revitalization efforts in the area. *

1. Broadway Building: Being purchased for $1.8 million and expected to provide space for 1,700 government employees after a $61.5- million overhaul. *

2. Grand Central Square: Including Grand Central Market and the Million Dollar Theater Building. Completion of $60- million project, with 121 new apartments, is expected by summer’s end. *

3. Bradbury Building: Architectural gem built in 1893 is another structure the state is examining for purchase or lease. *

4. Broadway Spring Center garage: Could serve many state employees. *

5. Ronald Reagan Building: State office building opened five years ago as the anchor for the improvement of the Spring Street corridor.