Salvation Army drops Long Beach project

For four years, Long Beach leaders have pinned hopes for turning around a troubled central city neighborhood on the Salvation Army’s plan to build a world-class community center there.

Then, last week, Salvation Army leaders announced that the project — which was to be funded largely by $76 million from the estate of Joan Kroc, the widow of McDonald’s entrepreneur Ray Kroc — was not financially viable. They cited insufficient local fundraising, escalating costs and liability concerns.

Although the charity’s Western territorial leaders have agreed to meet Friday with city and Los Angeles County officials, they insist the decision is final.

“We are not entertaining an appeal at that meeting,” said Cindy Foley, a Salvation Army major. “The Salvation Army does not feel that we will ever be willing to accept responsibility for this site.”

The decision has stunned city and county officials, who said they did not realize that the project was in jeopardy and only learned about some of the issues in a May 4 letter that terminated the project.

“This center is really important for the city,” said Mayor Bob Foster, who said he asked for “an opportunity to personally intervene here and see if we can resolve whatever problems that they perceive exist.”

The decision by the Salvation Army’s Western Territory board of directors also surprised local members, who said they believed that progress had been made since a new fundraising team had been put in place earlier this year.

The project has struggled to raise funds from the community, something Foley said Joan Kroc wanted in order to demonstrate local support for the center.

When Kroc died in 2003, she left the Salvation Army more than $1.5 billion — one of the largest charitable gifts in the nation’s history — to build a series of community centers to help transform blighted neighborhoods across the U.S. There are now eight in operation with plans for about 25 in all.

The Long Beach center would have had swimming pools, soccer fields, a fitness center, performing arts complex, art studio, culinary arts center and computer learning lab, all located in one of the city’s poorest and most diverse neighborhoods.

“This is something that would really transform people’s lives,” said John Edmond, chief of staff for City Councilman Dee Andrews, who represents the district where the center would have been built. It would also create jobs and attract businesses, he said.

The Kroc money was to be split — $38 million for construction and $38 million for an endowment to operate the center. To satisfy Kroc’s desire for local support, the Long Beach Salvation Army in 2006 undertook to raise at least $23 million, Foley said. Last fall, when officials scaled back the project the amount was reduced to $15 million — half of which Foley said had to be raised by the time the board held a review April 30.

Local Salvation Army leaders, she said, were warned in a letter that failure to meet their fundraising targets on time could result in cancellation of the project.

David Neary, who chairs the Salvation Army’s local advisory board, said just under $6 million in pledges had been secured, most of them since February. But he said he was told by a private foundation that the project could expect an additional contribution of at least $3 million when its board meets May 20.

“It seems kind of premature in my mind to cancel such an impactful project for the community because we are a couple of days away from getting a formal written pledge,” Neary said.

But Foley said some of the pledges were not counted since they were conditional on the Salvation Army acquiring the land. The acquisition of the 19-acre site, located near Pacific Coast Highway and Walnut Avenue, has proven complicated and costly because it is a Los Angeles County flood control basin.

The projected cost of transferring the land and preparing it for construction was initially estimated at about $5 million but has grown to $9.2 million, according to the letter.

Furthermore, Foley said, the Salvation Army is not indemnified from liability should there be an accident related to the flood basin, something its legal counsel advised was an unacceptable financial risk.

City and county officials said those are issues that could be resolved.

“The one thing that we can’t walk away from are the regional flood control responsibilities,” said Los Angeles County Supervisor Don Knabe, whose district includes Long Beach. “That is an issue, but it can be overcome.”

alexandra.zavis@latimes.com