A LOOK AHEAD * Proposed industrial development site is still a vacant lot seven years after riots. Community leaders cite it as another example of . . . : Promises Made but Not Kept to Watts
In the desperate days that followed the 1992 riots, an empty, weed-choked lot near Lanzit Avenue attracted considerable hope. It was to be the site of the first industrial development project in Watts in more than 15 years.
Instead, much like the neighborhood around it, the property remains neglected.
Los Angeles city officials, under increasing pressure to spark economic revitalization, boasted that the 10-acre project would create up to 300 permanent jobs in fields such as aerospace parts, furniture manufacturing, electronics and upholstery.
But seven years later the project remains in limbo, the victim of a multimillion-dollar dispute between the local nonprofit group that planned to build it and the nation’s third-largest trash hauling company, which had agreed to help fund it.
Community leaders say the project is another example of the unfulfilled pledges of new jobs for South Los Angeles, which in the 1970s and ‘80s suffered the disappearance of thousands of industrial jobs as companies either folded or moved to cheaper labor markets.
“It is very far between the promises and the production of jobs,” said the Rev. Reginald Pope of Bethel Missionary Baptist Church in Watts.
The lingering problems of that community, which still has an estimated poverty rate of 40% and a jobless rate two to three times the regional and national averages, were on national display last month when President Clinton visited. His appearance was part of a cross-country tour to unveil the latest in a series of programs intended to help bring the benefits of the nation’s economic recovery to the pockets of poverty left behind.
The $10-million Lanzit project, proposed by the Lynwood-based Economic Resources Corp., was expected to revitalize one of those pockets by providing jobs that sponsors said would move employees beyond the minimum-wage, service-sector economy.
The development, offering 164,000 square feet of office and light manufacturing space, would also have had space for a child-care center and job training programs. It was to be built on a lot surrounded by railroad tracks and several small manufacturing companies with rusting corrugated metal roofs.
Browning-Ferris Industries, an Arizona-based trash-hauling firm, had agreed to pay a key portion of the construction costs as a condition of winning a lucrative city trash contract--an incentive sometimes used by City Hall.
But officials at Economic Resources accuse Browning-Ferris of breaking the agreement after the firm won two city contracts worth $95 million. The nonprofit group has sued Browning-Ferris, demanding at least $3.9 million in damages.
A spokesman for the trash hauler said, “The lawsuit is without any merit.”
If the project is not built, the ultimate losers will be Los Angeles taxpayers: The city has already spent $5.2 million to buy the property, build streets and sidewalks and install lights on the site.
Watts was once the gateway for blacks moving to Los Angeles, beginning with African Americans from the South early in the century. Today the area is an entry point for immigrants from Mexico and Central America who, along with their children, constitute at least half the population. Blacks account for much of the other half.
Economic Resources has tried to create inner-city jobs since 1968. Its two major successes are a 52-acre business park in Lynwood and the Martin Luther King Jr. shopping center in Watts.
Browning-Ferris teamed up with the nonprofit group in 1990 to bid on several city trash contracts because the city gave preferential consideration to bidders that agreed to invest in creating jobs in the inner city. Economic Resources planned to finance the rest of the Watts project with a bank loan.
According to city documents, Browning-Ferris agreed to invest $1 million in Economic Resources, plus $500,000 for every contract the trash hauler was awarded. In addition, Browning-Ferris offered to give the nonprofit group 5% of the profits from each contract.
In 1993, the city gave Browning-Ferris two trash contracts. Based on the value of those, Economic Resources officials say the trash hauler owes the nonprofit $2.6 million.
Arnie Berghoff, a Browning-Ferris spokesman, said the company did not provide the money because Economic Resources broke the agreement by failing to create an investment fund that included contributions from other investors.
Paul Hofmann, a manager at Economic Resources, said the investment fund was not required under changes made in the agreement in 1996.
Dutch Ross III, president of Economic Resources, said market surveys show that the industrial space is sorely needed. He said his group needs to resolve the dispute and build the project soon because he fears the economy may turn sour.
“We feel fairly confident that we can lease this if we can get it built before the next recession,” he said.
Ross also blames the city for the Lanzit fiasco, saying it should be forcing Browning-Ferris to honor its agreement. He suspects that officials are not pressuring the company because it has contributed heavily to the campaigns of most City Council members.
Deputy City Atty. Chris Westoff said the city intends to hold Browning-Ferris to its promise to invest in the inner city. But he said the city contracts do not require Browning-Ferris to work with Economic Resources.
Westoff said the seven-year delay is regrettable. “There’s plenty of blame to go around on this one.”
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