L.A. Facing Historic Struggle in Apartment Dispute.

The battle over Sherman Oaks apartment complex Chase Knolls Gardens has rekindled the debate over how growth and development are managed in the city of Los Angeles.

Chase Knolls emerged at the center of the controversy several months ago when Legacy Partners announced plans to demolish the complex and put up a luxury apartment building in its place. Legacy says that without the new housing, Los Angeles runs the risk of losing its business base.

Preservationists argue that the city's tear-down mentality is turning L.A. into a city without a past.

But as the debate heats up, a more fundamental question is emerging: How can L.A. deal with an acute shortage of affordable housing while meeting the increasing demand for new luxury housing for a growing segment of the population?

"The city clearly needs both types of housing desperately," said Paul Jennings, chief executive officer of PCS, another development company that has built a number of Valley apartment complexes. "But traditionally, affordable housing requires the participation of the government to subsidize, and candidly; I don't think enough money is being spent there."

Even L.A. city officials, who have sought to block Legacy's development or at least force a study to determine whether Chase Knolls should be torn down, admit that the city's development needs have come to a crossroads.

"It's a daunting problem," said Jane Blumenfeld, chief of staff to Los Angeles City Councilman Michael Feuer. "This is existing affordable housing. When you take down affordable housing, it's very difficult to make it affordable new housing."

Seeking to halt the redevelopment, Feuer, who represents the district that includes Chase Knolls, has moved to obtain historic monument status for the complex. The city's Cultural Heritage Commission can grant historic monument status to noteworthy structures, either because of their architectural value or their significance to the city's social, cultural or economic roots.

Not exactly a treasure

Nearly everyone associated with the controversy concedes that Chase Knolls, a nondescript structure built around 1949 with an eye toward function rather than form, isn't much to look at. But the complex is representative of the so-called "Garden City Movement," which sought to create apartments with the kinds of communal features found in neighborhoods of homeowners.

"It is based on clustering units together surrounded by lush landscaping and common areas," said Ken Bernstein, director of preservation issues for the Los Angeles Conservancy.

A similar complex, the Village Green Apartments in the Baldwin Hills area, has been included in the National Register of Historic Places.

The Los Angeles City Council is expected to rule on the historic monument status application for Chase Knolls sometime in July. If successful, the move could scuttle Legacy's plans or force an extensive analysis to determine whether the complex should be renovated instead of demolished.

Preservationists say history has never found a place in L.A.'s public policy the way it has in other cities, and much of the city's heritage has been lost as a result.

Some 26 historic monument applications were reviewed by the Cultural Heritage Commission in the past year, and 20 of those did receive historic monument status. But much of L.A.'s architectural history, such as the Victorian homes that once occupied Bunker Hill, has already been lost to redevelopment, preservationists say.

"Los Angeles has a tradition since the 1920s of considering itself a disposable city," said city historian Marc Wanamaker. "L.A. people and developers have always looked toward the future, and it doesn't cross their minds that cities are based on roots of individuals who live and work in buildings."

Low rents don't pencil out

Developers counter that it is not just Chase Knolls' place in history, it is also the dilemma that the complex poses in the present day.

Many of the 260 units in Chase Knolls rent for $400 to $500, well under current market rates, which average $810 per month, according to real estate brokerage Marcus & Millichap. Developers say that, at today's land costs, they simply can't afford to build such low-cost housing unless the government subsidizes the projects or relaxes the rules on density to allow for more units.

"We are exploring whether it could pencil out," said Richard Lichtenstein, president of Marathon Communications, which handles public relations for Legacy Partners. "Rehabilitating the property was never something (Legacy) considered when they purchased the property."

Legacy contends that its plans for Chase Knolls strike a balance between the demand for luxury housing that will keep jobs in Los Angeles and the need to accommodate lower-income residents. In the redevelopment plan, Legacy has set aside 40 units for senior citizens, who would pay in the $700a-month range for one-bedroom units, about half the $1,300 Legacy plans to charge for such apartments in the rest of the complex.

Satisfying the need for luxury housing is just as important as meeting the demand for affordable housing, Legacy and other developers say, because businesses choose to locate where they have a large supply of workers. And companies that employ educated, professional workers will look elsewhere if they can't find a sufficient employee base within the city limits.

"Businesses choose to relocate to districts where there are no housing problems," said Lichtenstein.