CRA Girds for Fight to Revive Downtown Plan : Redevelopment: Agency plans to file appeal of ruling upholding $750-million ceiling on urban renewal projects. Former Councilman Ernani Bernardi also stands in the way.

Tireless, curmudgeonly Ernani Bernardi, an 83-year-old former Los Angeles city councilman, has the Community Redevelopment Agency scrambling to save its urban renewal plans for Downtown Los Angeles after scoring a courthouse victory against the agency this month.

Bernardi’s record of skewering, deflating and annoying powerful bureaucracies was amplified when a Los Angeles Superior Court judge sided with the former Van Nuys lawmaker and ruled that California courts cannot undo a 1977 agreement designed to halt the CRA’s ambitious Central Business District redevelopment effort.

For Bernardi, the ruling was a happy milestone. But for CRA board Chairman Dan Garcia, a senior vice president at Warner Bros. and confidant of mayors, it was galling and frustrating.

“So Bernardi thinks he’s smarter than the state of California, the county supervisors, smarter than the mayor and City Council!” Garcia fumed recently. “I question his motivation. This is all about his undying hatred of the CRA.”

“Let’s face it,” said real estate attorney Doug Ring, whose Downtown clients are working on projects with the CRA. “This has a crippling effect on the agency’s ability to do new projects Downtown.”

Dov Lesel, the CRA’s top legal adviser, said the ruling unfortunately vests in Bernardi the power to checkmate the will of the Los Angeles City Council, the mayor and the Board of Supervisors. “It’s an extraordinary decision,” Lesel said.

With so much at stake, the CRA is preparing to file an appeal to rescue its Downtown project from extinction.

The troublesome 1977 agreement is the fruit of a private lawsuit Bernardi brought against the CRA that bars the agency from spending more than $750 million in its 1,549-acre Downtown redevelopment zone, roughly enclosed by the Hollywood, Harbor and Santa Monica freeways and Alameda Street, but not including the Bunker Hill area. The ruling does not affect the CRA’s 22 other projects throughout the city, including the Bunker Hill and Hollywood projects.

Because it has hit the $750-million ceiling, the CRA is barred from engaging in new projects in the central business district although the agency says its job of revitalizing Downtown is not complete.

In its attempt to lift the spending cap, the CRA first received approval from other government agencies, the city, the county Board of Supervisors and the trustees of the Los Angeles school and community college districts, all of which have a stake in the property tax revenue generated in the zone.

Then, the CRA went to Bernardi. Bernardi became a player because, as a private citizen, he sued the CRA in the 1970s to limit its work in the Downtown district. To settle that lawsuit, the CRA and then-Mayor Tom Bradley agreed to the $750-million spending cap that would be “forever binding and conclusive upon the parties hereto.”

But Bernardi, who retired from the City Council in 1993 with a reputation as an irascible, tightfisted fiscal watchdog who attacked and harried powerful City Hall unions, bureaucrats and political contributors, refused to go along, forcing the CRA to go into court without him to seek judicial sanction for raising the cap.

The surprise came when Superior Court Judge Florence Pickard ruled that the courts had no jurisdiction to tamper with the agreement without Bernardi’s approval.

Although the agency is taking in about $45 million a year in tax revenue from the Downtown district, all but a pittance is being used to pay off debts. But if the cap is lifted, the CRA would be able to borrow money to finance its work program.

Don Spivack, CRA director of operations, ticks off a list of potential CRA projects put at risk by the recent ruling:

* The agency would like to develop 3,000 single-room occupancy units for Downtown’s poorest citizens. “A half-dozen major hotels along Spring and 5th streets that are privately owned need rehabilitation to make them suitable for permanent family housing,” Spivack said.

* About 6 million square feet of vacant or underutilized space in the city’s historic core along Spring Street and Broadway need to be revitalized. The agency also wants to address the growing vacancy rate in buildings along 6th and 7th streets between Olive and Flower streets.

* Plans call for making good on a long-term obligation to develop various levels of housing in South Park, a residential complex on the southern edge of Downtown. “Our target, set in the 1970s, was to build several thousand units there,” Spivack said. “We have built about 650 so far.”

* Myriad public facilities need upgrading, including rebuilding the roadway and sidewalks along Broadway, a vibrant center of Latino retail activity.

* Downtown residents need open space. “At present we have two parks serving some 14,000 residents of the central city east area, and neither are more than a third of an acre each,” Spivack said.

But Bernardi disputes the need for the CRA’s continuing involvement Downtown.

The lingering blight there can be eliminated by the private sector with conventional help from the city, he maintains. Moreover, the cash-strapped city needs the tax dollars for basic services, not redevelopment, he said. Finally, the former lawmaker distrusts the CRA’s big plans to help the poor and homeless.

Although the CRA has portrayed Bernardi as waging a selfish personal vendetta against the CRA, Bernardi has said he would accede to lifting the cap if that was the wish of the city’s voters.

Numerous suburban homeowner organizations and the Howard Jarvis Taxpayers Assn. have joined Bernardi to endorse his campaign to put the brakes on the Downtown CRA project. “We need that money to fund fire, police and schools, not pork-barrel CRA projects for big developers,” said homeowner leader Gordon Murley, chairman of a federation of more than four dozen Westside- and Santa Monica Mountains-based homeowner groups.

But Garcia is not impressed.

“Bernardi is not representative of the city, and I’m not sure these groups are either,” Garcia said. “If they really want to stop redevelopment, they should get themselves elected and do something to deal with the reality of poverty.”

(Garcia was recently nominated by Mayor Richard Riordan to head the city’s Airport Commission but in the meantime he continues to head the CRA board).

Meanwhile, Bernardi suspects that the CRA is hoping he will die and that his crusade will die with him. “I might advise them in this regard that I have an uncle who died when he was 103 and an aunt who’s 98 and still alive,” said the man who is fighting to have the last word.