COUNCIL GIVES GREEN LIGHT TO NEW DOWNTOWN PROJECT.

Byline: Rick Orlov Staff Writer

The next phase of downtown Los Angeles renewal - creating a new redevelopment area in the city's central core - won preliminary approval from the City Council on Wednesday.

The 13-0 vote for the proposal came after nearly three hours of testimony in which the only concern mentioned was the potential loss of social programs for the homeless and the poor who now inhabit the area, roughly bounded by Second Street and the Santa Monica Freeway, the Harbor Freeway and San Pedro Street.

``This is about housing in all categories,'' Community Redevelopment Agency Administrator Jerry Scharlin said. ``And we will continue our commitment to social programs.''

Councilwoman Jan Perry, who represents most of the area, said the new Central City plan is different from the Central Business District redevelopment effort in which most of the downtown high-rises were built through the tax-increment funding available under redevelopment law.

``This is not an attempt to continue generating revenue from completed projects,'' Perry said. ``All the money flowing to the agency will be spent within the project area ... for a dedicated income stream to improve the downtown area.''

The Central Business District project was long a subject of controversy over the diversion of funds to various programs, and a lawsuit by former Councilman Ernani Bernardi capped its spending at $750 million - a figure met several years ago.

Jon Coupal, head of the Howard Jarvis Taxpayers Association, said his group has general concerns over the creation of redevelopment projects.

``We haven't studied this particular project, and it might be worthwhile, but we think cities are better off not using redevelopment projects because it diverts property tax revenue,'' Coupal said.

Property tax revenue for all other local government purposes is frozen in a project area, and any increases in property tax revenue goes to the redevelopment agency for its programs.

``We think a city is always better off ... creating a business-friendly environment with tax incentives than losing that money for an extended period of time,'' Coupal said.

Community Redevelopment Agency officials, however, said the agency can offer incentives and use its powers of eminent domain to put together parcels of properties for development.

Perry said the goal in the city's core is to develop housing and encourage completion of projects such as the new Cathedral of our Lady of Angeles, renovation of the county Hall of Justice and construction of the new Caltrans facility.

Other aims in the first five years of the 30-year program include getting a supermarket built, revitalizing the downtown area and historic core through rehabilitation of buildings, converting some commercial buildings into housing and improving the jewelry, toy, flower, produce and fashion districts.

``A strong downtown is important to the entire city,'' Perry said. ``Almost two jobs in Los Angeles outside of downtown exist for every job in downtown.

``City residents who work downtown come from all parts of the city ... - from northeast Los Angeles, from Hollywood and from the San Fernando Valley.''

Jack Kyser, chief economist for the Economic Development Corp., called the plan a logical extension of what the redevelopment agency has done and what is needed to boost investment.

``Unfortunately, one of the problems we see with investors is the image of blight they have of the downtown area,'' Kyser said. ``This is something that is long overdue.''