Boost for an Area That Needs One

The Vermont Village Plaza Project, currently stalled by City Hall politics, would make the dream of owning a home come true for 36 families who otherwise would be priced out of the market. The new development also would include commercial space to encourage stores to take root at 81st Street and Vermont Avenue. Mayor Richard Riordan should drop his opposition to this project, which would benefit a neglected corner of South-Central Los Angeles that was hit by the 1992 riots.

First Interstate Bank deserves credit for largely financing the $15-million venture and sponsoring a competition that attracted 60 proposals from outstanding architects and others for the old Pepperdine University site. To meet community concerns, the bank scaled back the project from 130 low-income rental units--anathema to some nearby homeowners--to 36 owner-occupied townhomes; it added six stores too. Obviously, Vermont Village Plaza is no public housing project.

First Interstate also deserves praise for refusing to abandon its commitment despite a debilitating and counterproductive political tug of war. On one side are Riordan and Rep. Maxine Waters (D-Los Angeles) and on the other is City Councilman Mark Ridley-Thomas. Ridley-Thomas, Riordan’s most vocal critic on the council, is pushing this project. The project has been criticized by Waters, a resident of Vermont Knolls. Both Waters and Riordan have a relationship with Ridley-Thomas that’s chilly at best. Though politics surely played a part in Riordan’s decision to oppose the project, the mayor cites opposition from some residents of the nearby Vermont Knolls neighborhood who would prefer strictly commercial development on the site.

Riordan legitimately questions the cost of the high-quality project. The city would pay just above $1.76 million for the nearly two acres and provide a $90,000 federally funded subsidy for construction of each town- house. Public subsidies are commonly allocated to inner-city housing developments to make the units affordable. Commercial developments also often require higher subsidies to entice business to set up in disadvantaged, minority neighborhoods. This subsidy would “buy down” the price of the property and allow buyers to acquire the townhomes for $88,000 to $132,000 instead of the $199,000 cost of the units. The buyers would not be able to profit from the subsidy in a subsequent sale. The grant, in essence a silent second mortgage, would remain with the property even if the unit was sold or refinanced. That’s an appropriate use of federal housing funds in a disadvantaged area.

A little compromise--for example, greater commercial development--could induce Riordan to withdraw his objections. Otherwise, his veto is likely to be overridden by a turf-conscious City Council this week. Community development experts not involved in the messy politics of the Vermont project say this is an objectively good public-private partnership. It merits the city’s--and the mayor’s--support.