AGENCY RUNS AMOK, BLOATED AND BROKE.

Byline: Walter N. Prince

Which city agency was created in 1948 with the exclusive power to condemn private property to remove ``blight'' throughout Los Angeles but has failed miserably in this task?

Which city agency has the exclusive power to snatch away and spend on itself billions of dollars in property taxes that otherwise would go directly to the city, county and school district treasuries?

Which city agency owes a whopping $640 million to bondholders, and doesn't have enough money to pay rent, utilities and salaries to its own 210 employees for the next 12 months?

Which city agency is frantically hatching a scheme to pull itself out of debt by declaring 6,835 acres in the northeast portion of the San Fernando Valley as ``blighted'' so it can seize more than $1.1 billion in property taxes from that area over the next 45 years?

Which city agency wants the City Council to disband an elected committee of residents who caught on to the scheme and know that their homes and businesses may be seized by the agency under the power of eminent domain?

The answer to all these questions is the same: the Los Angeles Community Redevelopment Agency, which now is in firm control of more than 34 ``redevelopment'' and ``revitalization'' areas in Los Angeles, encompassing an astounding 20,000 acres of privately owned Los Angeles real estate.

And now the CRA wants to move into the Valley in a big way, taking control of 6,835 acres of ``blighted'' real estate that encompasses 1.1 million square feet of brand-new commercial and industrial buildings at the old GM plant in Van Nuys, the Panorama City mall that includes the hugely successful La Curacao and Wal-Mart discount stores, and the giant, sparkling-clean Galpin Ford facilities in North Hills.

In attempting to take control of these and thousands of other privately owned properties in the Northeast Valley, the CRA is just doing what comes naturally.

The CRA's Northeast San Fernando Valley Redevelopment Project, as it is known, started innocently enough in October 1993 when then-Councilman Richard Alarcon asked the CRA to create a study area in the Northeast Valley to identify any areas that were ``blighted'' and, more important, not reasonably expected to be redeveloped by private enterprise or through the City Council's use of alternative financing methods.

Before the study could really get under way, the Northridge Earthquake devastated the Valley in January 1994. In the months that followed, Los Angeles learned that federal money was slow in coming, and Valley residents were clamoring for help anywhere they could get it.

When the City Council signaled that it was anxious to assist, the CRA pushed aside the Northeast San Fernando Valley Redevelopment Project and instead launched into a dazzling sales pitch that promised the moon. Among other things, it wanted to change the term ``study area'' to the new definition of ``disaster area,'' which by law allowed the agency to fast-track the project and forgo many of the formalities that were necessary with a full-blown redevelopment project.

City Council blessing

The City Council took the bait and gave its blessing to the CRA's creation of a 2,914-acre Pacoima-Panorama City Project that was supposed to help restore the 1,151 damaged structures in the disaster area. The CRA's estimate of the total repair costs for these sites was $29.8 million, and most of the property owners were not insured. The main selling point of the proposal was the CRA pledge to provide local homeowners and other property owners with up to $12.9 million in restoration funding over a five-year period.

By the time the sales pitch ended, the confused and uneducated City Council gave the fast-talking CRA the right to borrow an astonishing $200 million from bondholders, secured by private property in the 2,914-acre area. To make matters even worse, the befuddled council also allowed the CRA to keep up to $626.5 million in new property tax revenues the revitalized area was supposed to generate for the next 45 years. This is money that would otherwise have gone directly to the city, county and schools.

The five years is now up, and the record is dismal. On the productive side, the CRA loaned $2 million to four businesses at no interest, convinced the city to put up $125,000 to buy 10 homes repossessed by the Department of Housing and Urban Development, and showed a new organization called Pacoima Partners how to apply for and obtain non-CRA Proposition A grant money to plant trees along the Pacoima Town Center on Van Nuys Boulevard.

But other than these minor accomplishments, the CRA's activities to date have pretty much been limited to paying lots of money to itself and its consultants for market studies, planning studies and design studies.

Other than non-CRA grant money from the federal government, the current CRA budget reveals the fact that the agency does not intend to spend one dime in the disaster-assistance area for an additional four years, at which time it says it will cut loose $429,000 to ``create incentives'' for homeowners to borrow money to fix up their homes, and an additional $936,000 to help find tenants for empty buildings near Hansen Dam. Some rightly argue that this should have been done five years ago.

The greed grows

It is said that true greed knows no bounds. As if to prove this, three years after the Northridge disaster, the CRA convinced then-Councilman Alarcon that the 2,914-acre earthquake area should really have been 6,835 acres. Since most damaged properties had already been repaired without CRA help, and it would look a little silly to expand the 1994 disaster-assistance area in 1997, the

Northeast San Fernando Valley Redevelopment Project was resurrected instead. And this time it included such ``blighted'' areas as the old GM plant, the Panorama Mall and Galpin Ford. All pay high taxes, which is what the CRA is really after.

The projected payoff to the CRA for the new cash cow is $1.1 billion in diverted property taxes for the next 45 years. The projected loss to the city, county and schools is $1.1 billion that they otherwise would have been able to spend for services to residents of the entire city.

Unfortunately for the CRA, the state law dealing with redevelopment projects requires the formation of a Project Area Committee, called a PAC, to look at plans proposed by the CRA. In most communities, the PAC panel is carefully nurtured by the CRA to rubber-stamp anything placed in front of it. But in this case, the elected Northeast Valley PAC didn't like what it saw.

When the PAC compared the CRA's unfulfilled promises with actual CRA deliveries for the first five years after the earthquake, and also realized that almost nothing would be done for the next five years as well, it began to question the CRA's motives for recommending the formation of another project area.

The PAC also has questioned why the project area needs to be enlarged, and points out that the oversized project area does not even focus on truly blighted neighborhoods, including the ones the CRA was supposed to help under the disaster-assistance plan.

Since there are no details of any particular projects, the PAC has also demanded to see specific lists of where and how the money will be spent. So far, the CRA has not complied.

An education

As word spread of the Northeast Valley PAC's refusal to approve the new project, disgruntled residents of other areas controlled by the CRA throughout the city began showing up at meetings to give moral support and to tell their own horror stories about CRA interference and indifference to the needs of their own communities.

Attendees at the PAC meetings have now learned that sellers of homes in the project area will have to disclose that property can be condemned and seized by the CRA. They learned that remodeling and repair costs to their homes will increase dramatically because prevailing wages must be paid for any improvements to buildings in the area, even if the owner pays with his own funds.

They learned that the CRA can prevent a property owner from obtaining a building permit if the building does not conform to the CRA's idea of a ``design for development'' that may not even be adopted at the time the permit is requested.

They learned that the city, county and schools are shortchanged by millions of dollars of property taxes each year, with the confiscated funds going directly to the CRA as part of the CRA's own $340 million budget. And they learned that the CRA has now added insult to injury by asking the city to give it $9 million out of the general fund each year, to help the mismanaged CRA make payroll and rent payments.

When the CRA finally released the long-awaited environmental impact report on Oct. 9, the community officially learned that the project could result in the the bulldozing of 49 houses, the relocation of 196 residents, the demolition of 430,258 square feet of commercial and industrial buildings, and the permanent loss of 430 jobs in the proposed redevelopment area. It also shows a massive increase in traffic, ``unavoidable significant adverse impacts'' on air quality and utilities, and the loss of fire protection services and parkland. And these are just CRA estimates, because there still is no firm master plan approved for the proposed area.

CRA attacks PAC

When the CRA learned of the PAC's growing disenchantment and resistance, it recommended to freshman Councilman Alex Padilla that the elected PAC be disbanded and replaced with a hand-picked panel of appointees ``that better reflects other views.''

To his credit, Padilla so far has politely declined the suggestion. Meanwhile, vacant seats on the PAC will be filled during a mid-December election, if the CRA does not persuade Councilman Padilla in the meantime to allow the CRA to hand-pick the new members and forgo an election.

The Northeast Valley PAC and the residents of the proposed area are to be congratulated. They have taken on the burdensome task of becoming familiar with the workings of the CRA, and they don't like what they see.

City Councilman Padilla should follow their lead and stop the CRA from making another large land grab to confiscate over a billion more dollars of property tax money that is better spent for the needs of the entire city. Padilla would best serve his constituents, and the whole city, by asking the City Council to terminate the 2,914-acre earthquake-disaster project and turn thumbs down on the proposed 6,835-acre Northeast San Fernando Valley Redevelopment Project.