Hollywood scenario for redevelopment faces new challenge.

Tinseltown's $1 billion redevelopment plan, which appeared destined for a Hollywood-style happy ending after its main legal challenge was resolved last summer, may be in for a rewrite.

Hollywood camera store owner David Morgan and five other redevelopment critics have asked the U.S. Supreme Court to direct California's high court to review its decision upholding the movie capital's redevelopment plan.

So far, the federal justices have not agreed whether to hear the case, though Morgan optimistically predicts it will be on the docket some time in the first half of 1992.

"We feel the (U.S.) Supreme Court has been increasingly tightening abusive land-use practices and there is a great likelihood they will rule in our favor," Morgan said in an interview last week.

Last August, the state Supreme Court let stand a lower court decision supporting the legality of the 30 year, $992 million plan to breathe social and economoc life into Hollywood. The ruling ended five years of legal challenges by community activists suspicious of the way the plan was crafted and nervous about the effects of gentrification on small business owners and residents.

In their Nov. 19 filing with the U.S. Supreme Court, Morgan's group contended Los Angeles City Hall and the Community Redevelopment Agency illegally "rammed through" the redevelopment project by failing to give adequate notice about a 1983 community election. The vote was for members of a so-called "project area committee," a citizens group required by law when a large number of low-income residents could be displaced because of redevelopment.

Morgan says the PAC was formed but was dominated by pro-development, non-Hollywood residents.

In addition, Morgan argued, only 5 percent of Tinseltown structures were blighted when the urban renewal plan was being mulled, 75 percent below the level of dilapidation needed to declare an area in need of public renewal.

"In ramming through the Hollywood Redevelopment Project so as to grab tax increment money and eminent domain power," the CRA and the city "ran roughshod over the protective requirements," the 65-page petition stated. ". . . How come Los Angeles is holding elections without notifying the voters? How come billions of dollars of sound properties are found to be in slum condition?"

CRA spokesman Chuck Sifuentes said the agency is confident Morgan's efforts will founder.

"Mr. Morgan has every right to appeal the state Supreme Court decision. However, the agency remains confident the U.S. court will rule in favor of the CRA," Sifuentes said. "We've won at every level with the Hollywood redevelopment plan and don't see any change in that."

The Los Angeles City Council approved the Hollywood project in 1986, though legal action blocked any major new developments or the collection of valuable tax increments.

Many of Morgan's allegations were contained in earlier lawsuits against the city and CRA.

Until now, Morgan has been best known for leading the charge against a proposed tax on commercial property owners near Metro Rail depots. Morgan said he expects the U.S. Supreme Court to make a decision on his filing within the first few months of the new year.