A plan to dramatically extend the life of a massive redevelopment project in North Hollywood appeared in jeopardy Thursday after several Los Angeles redevelopment officials questioned whether there is the tax base and public support to proceed with it.
"If this thing has any chance of being salvaged, it has to be dramatically reformed," Dan Garcia, chairman of the Community Redevelopment Agency, told the agency staff that recommended the extension. "Will that be enough to save it? I don't know."
The comments from Garcia and other CRA members are the first sign that the powerful agency is considering pulling the plug on the controversial 16-year project that was adopted in 1979 to revitalize the blighted 750-acre community.
Without the so-called plan amendment, the project would run out of funds sometime next year. But if approved, the amendment would lift the spending cap from $89 million to $535 million and continue the project until 2019. The power to condemn property, which expired in 1991, would be renewed until 2007.
Since it was first adopted, 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 a CRA report.
The proposed spending increase would help finance 29 new projects, including rehabilitating about 240 homes and apartments, upgrading street lighting and subsidizing commercial development, CRA officials said.
Longtime critics of the project expressed cautious optimism that the CRA is finally listening to their pleas to end the project.
"It's very hard to believe that they will give us consideration because they haven't given us consideration in the past," said Maria Fant, a member of the North Hollywood Area Committee, an elected citizens advisory panel for the project that has opposed lifting the spending cap.
"It's a step in the right direction," said Mildred Weller, a longtime CRA critic and co-chair of the advisory panel.
After expressing concern over the plan amendment, the CRA board voted to delay for at least two weeks a decision to certify the plan's environmental report to give agency staff more time to address the board's concerns.
A final decision by a joint meeting of the CRA and the Los Angeles City Council is expected in August or September.
The change in tone of the board appears to have come with Garcia's appointment to the board in November. Garcia, the former chairman of the city's Planning Commission, said after the meeting that as chairman of the board he plans to put tough questions to the agency staff.
"This is a new day," he said.
Among other concerns, CRA members questioned whether the North Hollywood area can generate the property taxes to pay for the extension.
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 among the county, local school districts and the city.
But if only tax-increment financing is used, the amendment would raise only $185 million for revitalization projects, with the remaining $350 million going to pay for interest on the bonds.
For years, critics have blasted the redevelopment project, saying it has diverted millions in tax dollars and has condemned dozens of parcels of private property and yet has largely been unsuccessful at eliminating the blight in North Hollywood.
Criticism of the North Hollywood redevelopment plan has gotten so nasty that it has resulted in lawsuits, scuffling matches at redevelopment advisory panel meetings and even death threats.
Last year, the CRA's offices in North Hollywood were temporarily closed because the project's manager received numerous death threats, culminating in the arrival of a hearse. New security measures were installed when the office reopened.
For what appears to be the first time, Garcia has added his voice to the criticism, calling the $535-million spending cap "absurd." He said that he doubts that property taxes from North Hollywood can finance the extension. Garcia said CRA projections that the tax base can support such an increase are "pie in the sky."
He also criticized a section of the plan that gives the CRA the power to condemn private property if the property owner refuses to abide by the conditions of the plan. Garcia called the section "gunboat diplomacy."
After listening to about 10 CRA critics and North Hollywood business owners assail the plan, other board members said they were concerned about the amount of opposition to the plan.
"I'm really surprised by the strength of the opposition to the plan," said recently appointed CRA member Alfred E. Osborne Jr.
CRA member Shelby Jean Kaplan Sloan drew applause from CRA critics at Thursday's board meeting when she said it is important for the CRA to have community support before moving ahead with the plan.
Garcia instructed the CRA staff to calculate how much money the CRA has siphoned so far from North Hollywood properties to pay for the redevelopment project. He also instructed the staff to notify North Hollywood community leaders that the board will meet again in at least two weeks, giving both sides an opportunity to express their support or opposition to the plan.