Hollywood advisory group, CRA tangle over funding for Hollywest.

Members of the Hollywood Community Advisory Council, appointed by Los Angeles City Councilman Mike Woo to advise the Community Redevelopment Agency, say they are outraged that they are being bypassed in recent attempts to obtain taxpayer funds for the controversial Hollywest development.

"There's some fundamental problems with this project," said Sharyn Romano, chairwoman of the HCAC's Housing & Social Needs Committee. "There's something very wrong here. This just doesn't make any sense."

But CRA officials say the committee members are mistaken, and that the additional funds being negotiated for Hollywest have always been attached to the project -- it's just the source of the funds that has been changing.

Hollywest is planned to be a mixed-use project, incorporating retail and commercial space, topped by a senior citizen housing project, at the corner of Hollywood Boulevard and Western Avenue.

Developer Ira Smedra borrowed $5 million from the CRA three years ago to get the project going, but he has yet to even tear down the dilapidated Hotel Rector standing on the project site. The CRA recently agreed to pay Smedra $400,000 for housing plans and $4.75 million for air space rights.

Smedra has not made any payments on his CRA loans, and developer Gerald Schneiderman (also an HCAC member) claims that Smedra is in default and that his property should be foreclosed upon.

But Mayor Tom Bradley has earmarked Hollywest for $6 million in federal block grant money, and Smedra has applied for another $4.5 million in government funds, said members of the HCAC.

John McCoy, director of housing at the CRA, said the $4.5 million is money earmarked to "fill the gap" between the cost of building affordable housing and the size mortgage that can be supported by the rent it will generate. When completed, the housing portion of the project will be sold to the Retirement Housing Foundation, McCoy noted.

McCoy said the additional money may come from a federal housing fund through the City Housing Department.

He acknowledged that the CRA also is negotiating with Smedra about a possible commercial subsidy, in the form of a monetary incentive to help convince a supermarket chain to locate a store in Hollywest.

The CRA had placed Smedra's project on its board agenda for May 6, but then withdrew the item before the meeting. It is expected now to come before the CRA board in June.

"The problem is there isn't a deal," said McCoy. "We haven't completed negotiations."

Romano said Smedra has been unable to obtain financing and "doesn't have his ducks in a row."

"This whole project from the outset has never been normal. He keeps coming back for more money," Romano said. "I think we could do a lot more in affordable housing with that money."

The project also has hearings coming up before the City Council and the council's Community Redevelopment and Housing Committee.

Members of the committee say they don't understand why Woo, who appointed them to the HCAC, keeps pushing for the proposal when Smedra is having so much trouble getting it off the ground and all four HCAC committees are opposed to it.

Woo last month sent out letters to his supporters in Hollywood, asking them to send letters to policymakers supporting the Hollywest project.

"For some reason, Woo wants to put this through, and it's so stupid," said Werner Illing, a senior citizen advocate on Romano's committee.

Schneiderman said Woo is "almost campaigning as hard for Hollywest as he is for mayor."

In his letter, and in past statements, Woo said he supports Hollywest because it will bring jobs and housing to a blighted area.

But committee members said once the planned Metro Rail station at that corner is completed, in the next five years or so, the property will be very valuable, and developers will be eager to build there.

Meanwhile, affordable housing can be built less expensively elsewhere in Hollywood, they said.