FEDERAL FUNDS HEADING FOR NEEDY FIRMS.

Byline: Rick Orlov Daily News Staff Writer

The first $35 million in seed money to community groups to provide loans to inner-city businesses and revive those areas will be made this week, U.S. Treasury Secretary Richard Rubin announced Monday.

Rubin, speaking at the public issues forum Town Hall Los Angeles, said the money is part of the department's Community Development Fund, to provide capital to small banks and credit unions to make loans to businesses in depressed areas.

The program is part of a wider effort by the Clinton administration to rebuild inner cities that have not shared in the economic revitalization experienced across the country.

``What is also true . . . is that there are too many people and too many places in our inner cities that are in trouble and that are not reached - or reached far too little by our improved economy,'' Rubin said.

``We need a true marshaling of national will and effort . . . as a critical economic concern for all of us. Success with our inner cities requires sustained economic growth that increases jobs and, through a high level of demand for labor, increases incomes.

``Too often, I think that those focused on the issues of the poor do not focus adequately on the imperative of a good economy for their purposes,'' Rubin said.

As another example of Clinton efforts, Rubin said the administration has introduced legislation to name 100 additional areas in the U.S. ``empowerment zones'' or ``enterprise communities,'' to provide tax incentives to encourage businesses to locate in poorer areas.

While Rubin boasted of the national economic recovery under Clinton - a 50 percent reduction in the deficit and the creation of 10 million jobs - he said more needs to be done to make sure the growth helps all people.

Rubin cited figures from the Committee for Economic Development, a business policy group, that shows one-third of the neighborhoods in the nation's 100 largest cities are considered distressed or in danger because of low incomes, and that U.S. children who live in poverty are poorer than children in most other western industrialized nations.

To solve these problems, Rubin said support is needed for education programs at all levels - from kindergarten and Head Start programs to worker retraining - as well as increasing public safety and providing access to capital.

The Clinton administration has supported several such efforts, such as changes in the Community Reinvestment Act, to ease restrictions on financial institutions to increase loans in the inner city, Rubin said.

Another example, he said, is the planned opening today of the Community Development Bank in Los Angeles, which will bring together government, local banks and the community to provide investment loans in poorer areas of the city.

Also, he said, the administration has been involved in trying to revitalize areas that have been abandoned by industry.

As part of that, Rubin announced the Clinton administration was providing $2 million to clean up the LANCER site once designated for a trash-to-energy project.

Rubin said the money will be used to create a new community-based organization called California Center of Land Recycling to help communities work with private industry to clean up abandoned sites.