CSUN RETAIL PLAZA A GREAT IDEA : UNIVERSITY SMART TO CASH IN ON VALLEY'S ENTREPRENEURIAL CLIMATE.

Byline: David Honda

A unique project proposed by California State University, Northridge, exemplifies a new entrepreneurial attitude in which cash-strapped public institutions bring business savvy to long-term survival strategies, and the San Fernando Valley seeks to diversify its jobs and revenue base as a key to its recovery from fiscal and natural disasters.

Indeed, both the San Fernando Valley and the highly regarded university are responding to respective economic challenges with aggressive, proactive approaches.

The Valley has been buffeted over the past years of economic uncertainty.

A national recession, which began tightening its grip on California in the late 1980s and held on relentlessly through the turn of the decade, hit the San Fernando Valley hard. The virtual collapse of the area's core industry - aerospace - cost the region thousands of jobs. Massive downsizing set off a ripple of depressing losses as suppliers and other local businesses, which catered to the plants and their employees, were stranded in the vacuum. Additional losses like the closure of the General Motors auto plant in Van Nuys compounded the hurt.

Yet another cruel blow struck the Valley in the early dawn hours of Jan. 17, 1994, as the Northridge Earthquake, mere seconds in duration, left a landscape of heartbreak and chaotic destruction. Total losses to the temblor were later estimated by the Governor's Office of Emergency Services at $25 billion to $27 billion, with the Valley bearing the brunt of the damage to scores of homes and businesses.

Cal State Northridge, too, suffered heavy seismic damage, forcing the closure of several campus facilities.

Even before the earthquake, however, CSUN has felt some of the same economic pressures experienced by the Valley as a whole. The statewide recession cut deeply into state revenues, which in turn reduced revenues allocated to the university system. Increases in student fees, a 180 percent jump over the past 10 years, have not bridged the gap. Monies for one of the nation's most comprehensive public university systems have dropped 9 percent in the past five years. Meanwhile, student population at CSUN has continued to grow - about 7 percent in the past two years alone.

Faced with challenges to their continued economic viability, both the Valley and the university have responded with innovative strategies designed to shore up and replenish their respective economic bases. The economic forces of Valley and CSUN leadership are similar on key points: Diversification of revenue sources, flexibility to keep pace with new market demand, and, more importantly, better capitalizing on existing strengths and resources.

A high level of cooperation and collaboration has produced abundant signs of economic recovery for the Valley. New jobs in the entertainment industry and small business are slowly replacing those lost in the recent recession. This revival of economic activity, particularly among small and midsize businesses, is contributing to a recently crippled local tax revenue base.

The Economic Alliance resuscitated the formerly dormant North Los Angeles Visitors and Convention Bureau last year, signaling a renewed commitment to nurture the potential of the rapidly growing entertainment industry in the Valley and capture a bigger share of the $21 billion tourism industry in Southern California.

Projects, such as the planned expansion of Universal Studios, which could create an additional 13,000 jobs in the Valley over the next 25 years, and the development of the NoHo Theater District, which is luring tourists into a once-neglected community, are part of the new economic resurgence in the Valley.

The proposed transformation of the old General Motors plant into a bustling retail complex, the reopening of the Northridge Fashion Center and the formation of several local Business Improvement Districts are also testament to Valley prospects for renewed investment. And to these developments must be added a proposal by Cal State Northridge, which supports the Valley economic strategy and enhances its own ability to respond to economic pressures.

Seeking to address the deepening problem of shrinking resources as state support of the University declines, CSUN has taken a step, mandated by state legislation, to optimize state land resources. In partnership with a private developer, CSUN proposes to enter into a long-term ground lease of a 20-acre site owned, but not used, by the university, for development of the upscale University MarketCenter. Featuring a contemporary Mediterranean ``village'' design of plazas and pedestrian walkways, the MarketCenter will fill an unmet retail need in the area.

University revenues from the MarketCenter will help close the gap left by declining state tax support. By attracting private investment for a project which is responsive to market demand, the university is meeting squarely its own new funding realities and plays a role in the Valley strategy for economic recovery. The retail development will create more than 300 full- and part-time jobs for the local community and infuse nearly $1.25 million annually in tax revenue to the City of Los Angeles.

After years of downturns and cutbacks, proaction by the Valley and the university are stimulating prospects for the future.

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PHOTO Money to be made: Project director Frank Wein estimated CSUN would collect up to $1 million a year from a retail center.