North Hollywood Project Is Kept Alive : Redevelopment: Panel continues plan until 2019 and lifts the spending cap from $89 million to a maximum $535 million.

Following a contentious three-hour hearing, a Los Angeles redevelopment panel kept alive a plan to extend a controversial North Hollywood redevelopment project that is set to expire next year.

The plan would continue the project until 2019 and lift the spending cap from $89 million to a maximum of $535 million. The power to condemn property within the 750-acre project area would also be extended to 2007.

The Community Redevelopment Agency’s board of commissioners voted 4 to 1 to send the plan to the Planning Commission and ultimately to a joint meeting of the CRA and the City Council for final consideration.

The decision represented a change of attitude for some board members, who expressed concerns with the plan at a previous meeting due, in part, to what appeared to be overwhelming community opposition.

But Thursday the voices of 25 CRA opponents were diminished by the testimony of some of the 70 supporters who attended the hearing, some carrying placards that stated: “We Say Stay CRA” and “12 More Years.” One supporter from North Hollywood literally sang the praises of the CRA to the board.

“I was somewhat reassured to hear some support,” said CRA board Chairman Dan Garcia, who expressed concern over the financing and community opposition to the plan during a meeting last month. “I think it would be a significant mistake” to kill the plan.

But the show of support did not sway CRA Commissioner Bobbie Fiedler, a former San Fernando Valley congresswoman who voted against the plan, saying taxpayers have subsidized development in the area long enough.

“I’m just concerned that if this is going to make it it’s going to make it with private funds,” she said. “We have put enough public funds into it.”

In fact, financing for the project has generated the most criticism for the project.

Since the project was adopted in 1979 to revitalize areas of blight in North Hollywood, the CRA has funded about $77 million in improvements, mostly through bond measures 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.

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The project has rehabilitated 836 houses and apartments for low- and moderate-income families, built 865 new units and constructed 469,000 square feet of office, retail and parking spaces, according to a CRA report.

But CRA officials proposed the extension because they said the 16-year-old project has been hampered by the recession and, most recently, the Northridge earthquake.

The proposed spending increase would help finance 29 new projects, including the rehabilitation of about 240 houses and apartments, funds to upgrade street lighting and subsidies for commercial development, among other improvements, according to CRA officials.

Under the extension plan, the CRA could divert up to $535 million in tax increment from the area. But if long-term bonds are the only means of financing, only about $185 million would go toward improvements, with the remaining $350 million going to pay for interest on the bonds.

During the hearing, opponents and supporters vehemently debated the merits of the project and argued over the benefits of extending it.

One CRA opponent said the agency has failed to meet its goals and lifting the spending cap would be equivalent to giving a raise to a baseball player with a lousy batting average.

Continuing the sports metaphor, Sharon Pfeiffer, a supporter of the project, compared ending the project to shooting a race horse with a sprained ankle. “We must fix the ankle and go on with the race,” she said.

Another supporter, Diana Liekus, a North Hollywood resident and former USO singer, penned a song about the virtues of the CRA, which she sang to the board. “We’re wonderful, we’re marvelous and North Hollywood needs the CRA,” she sang.

Representatives for Councilmen John Ferraro and Joel Wachs, who each represent parts of the North Hollywood project, said they support the extension to continue to fight blight in the area.

But Mildred Weller, a longtime CRA critic, said she worries about the agency taking in more debt at a time when Los Angeles County and other government agency are plagued with financial problems.

“Can the city afford to do this with borrowed public funds?” she asked. “It’s the cost of half a billion dollars that worries me.”

Opponents also submitted letters from several adjoining homeowners’ associations and elected officials, including state Sens. Cathie Wright (R-Simi Valley), Tom Hayden (D-Santa Monica), Quentin L. Kopp (I-San Francisco) and Herschel Rosenthal (D-Los Angeles). All four senators said in their letters that they oppose increasing the spending cap in light of dwindling tax revenues to the city, county and state.