City Diverted $500,000 From Pacoima Study

A study to revitalize the economy of Pacoima, ordered by the Los Angeles City Council more than two years ago, was never begun because the city agency in charge of conducting it rerouted the $500,000 appropriation.

The Community Redevelopment Agency, which said the money was needed more urgently for earthquake recovery and other projects, said it still plans to conduct the study in the next fiscal year, which begins in July. The City Council is expected to appropriate the funds again today.

That doesn’t mollify Councilman Richard Alarcon, who represents Pacoima and surrounding neighborhoods and made the proposed study one of his campaign promises to win election.

“The study takes 18 months, and to find out now that it hasn’t been done is frustrating,” Alarcon said this week.

In October 1993, three months after Alarcon was elected, the council instructed the CRA, at the councilman’s request, to study potential strategies to draw new firms to Pacoima and rejuvenate existing businesses.

Pacoima, a mostly Latino community in the northeast San Fernando Valley, has the Valley’s lowest income rate and suffers from a poverty rate that hovers between 25% and 40%--about twice that of the rest of the city, according to 1990 census figures.

But last year the CRA diverted the $500,000 the council had set aside for the Pacoima study and failed to inform Alarcon about the status of the study at the time.

CRA officials defend the decision, saying the agency fell short of funds last year and needed the money to pay for studies to set up five earthquake recovery projects in the Valley and Hollywood and three new redevelopment projects elsewhere in the city. While the Pacoima study has lingered in limbo, two additional projects are expected to be adopted this month.

One of the earthquake projects was established in and around Pacoima.

“We all recognize [the study’s] high priority, but we are trying to balance fiscal realities with all the needs,” said Don Spivak, the CRA’s director of operations.

Spivak said the CRA board voted last week to set aside new funds to complete the Pacoima study in the fiscal year beginning in July. He said he is not sure when the study would begin.

As for Alarcon’s complaint that the council was left in the dark about the CRA’s decision to postpone the study, Spivak acknowledged that perhaps the CRA did not do a good job on keeping the council informed.

“It was part of the budget package adopted last year,” he said. “Maybe it was something that wasn’t sufficiently highlighted.”

Alarcon and Spivak agreed that in reallocating the money, the CRA was acting within its authority.

Spivak added that the Pacoima study was in part a victim of bad timing, because all the new projects recently adopted were proposed in response to the damage caused by the 1992 riots and were in the pipeline before Alarcon called for the Pacoima study.

On the other hand, the five earthquake projects were proposed after Alarcon requested the Pacoima study but took priority because of the nature of the damage they address, he said.

Alarcon said he understands the CRA’s financial limits but is still angry that the Pacoima study was brushed aside without his knowledge. He added that he has been pressing the CRA for months to launch the study.

Under a traditional redevelopment project, a portion of the property taxes collected in an economically depressed area is diverted to the CRA to repair streets, sidewalks and parks and to provide low-interest loans to businesses. The CRA also uses the power of eminent domain to acquire private property to make way for housing or commercial projects.

An earthquake recovery project also diverts property taxes to the CRA, but the money can only be used to repair quake damage to residences and businesses. The CRA’s power of eminent domain is also used in earthquake projects but is limited to certain special circumstances.

In Pacoima, some longtime business owners who have complained that the community has been treated like a neglected stepchild by the city said they were not surprised the study had been put on hold.

“Because it’s such a poor area, it seems to be at the bottom of the totem pole when it comes to getting any help,” said Al Gold, owner of Gold’s Graphics, a firm that produces banners and signs in Pacoima. “Whatever can be done to help the area is sorely needed.”

For instance, Gold said he has fought for about 20 years to have the city repave a five-block section of San Fernando Road near Osborn Street that is so torn up that half of the street has become a dirt road.

“There are a lot of situations like that in Pacoima,” he said.

Pacoima is one of 34 communities in the state designated as enterprise zones, making it eligible for state tax breaks to businesses that operate in poor neighborhoods.

There is, however, no recent data on which to judge the success of the zone, and some business leaders say the zone’s record has been mixed.