Showdown nears in battle over Chinatown Redevelopment zone. (Up Front).

L.A. County is going to court next week to prevent the Chinatown Redevelopment Project from raising spending limits -- and thereby siphoning off property tax revenues that would otherwise go to the county.

The county maintains that the increase is not needed because development is taking place in the area without the Community Redevelopment Agency's help. In a broader sense, the litigation touches upon the issue of whether the agency is more hindrance than help in shaping neighborhood redevelopment.

"Developers are buying property," said Martin Zimmerman, assistant division chief for the Los Angeles County Board of Supervisors. "If the private sector is buying property, you don't need a redevelopment zone."

Developer Geoff Palmer, who is putting the finishing touches on the 297-unit Orcini apartment complex at Sunset Boulevard and Figueroa Street in the Chinatown zone, said CRA involvement held up the project for an additional year because the site needed a zoning change. By contrast, said Palmer, principal of G.H. Palmer Associates, his 600-unit Medici apartments just west of the Harbor (110) Freeway were entitled in 120 days.

The CRA sees the issue differently.

The reinstatement of the original spending cap would prevent the creation of more than 1,000 housing units and 500,000 square feet of planned construction or redevelopment -- about half of the activity that's currently on the drawing board, said Len Betz, Chinatown project manager for the CRA.

"We've run out of tax increment revenue to complete the projects originally contemplated in the plan," Betz said. "It's a very negative message to be sent out to the development community."

Betz insisted that private development efforts remain the exception in Chinatown. "What you're seeing is 20-plus years of (CRA-related) developments that have made a change, and all the changes we've been promoting over these past years are doing what they're supposed to be doing," he said.

As for Palmer's experience with the Orcini project, Betz pointed to the need for citizen input. "Palmer came out with a better looking project as a result of the meetings," he said.

New CRA Chief Executive Bud Ovrum would not comment about the Chinatown situation, but he has acknowledged general problems with the agency's bureaucracy and has made addressing them a priority.

"I need to change the culture of bottom line productivity," said Ovrum said in an April 9 interview. "We're good at activity, we haven't been as good at achievement."

This is not the only squabble involving the county and the redevelopment agency. Last year, the county filed a lawsuit against the CRA, objecting to the inclusion of 30 acres of parking lots near Staples Center in the CRA's new City Center zone. That case is pending.

Since 1982, the CRA has begun work on 48 projects in Chinatown and completed 36. Of the total, 21 involve public improvements, such as signage and streetscape upgrades, or institutional projects like parks or community centers.

The county filed its lawsuit in October 2001, one month after the City Council quadrupled the CRA's spending cap in the Chinatown district to $230 million from $57 million. A hearing is scheduled for April 28 in L.A. Superior Court.

The suit makes three main claims: that the amended CRA plan required a new environmental impact report, that the plans for the new spending cap were inadequate, and that the CRA did not negotiate with the county over tax increments in good faith. The court ruled in favor of the CRA on the first count last July.

The original $57 million spending cap, in place since 1980, is likely to be reached at the end of this year or early next year.

Running battle

Meanwhile, privately financed projects in Chinatown seem to be moving ahead more quickly than the ones that rely on the CRA.

The site of the former Little Joe's restaurant remains vacant while long-term negotiations between a developer and the .city drag on, said Kim Benjamin, president at Manhattan Beach-based Laeroc Partners Inc., which owns the property at College Street and Broadway.

"Nobody wants to deal with the CRA," Benjamin said.

The mixed-use project would include a bridge to the soon-to-be-opened Gold Line station. He declined to identify the potential buyer.

Laeroc sold the 50,000-square-foot Dynasty Center retail complex nearby for about $350 a square foot, Benjamin said.

Meanwhile, with downtown revitalization efforts edging north of the Santa Ana (101) Freeway, other real estate investors and developers are beginning to migrate to Chinatown -- regardless of public funding.

Besides Palmer's Orcini, two complexes totaling 150 affordable housing units will be completed by August. The 101-unit Castellar Apartments, on Chavez Avenue between Hill Street and Hill Place, was developed by Westlake Village-based Amcal Multi-housing Inc. without CRA funding (although Amcal did receive $525,000 from the city's housing department for the $17 million Amcal). The smaller Cesar Chavez Gardens, developed by the Chinatown Service Center and Little Tokyo Service Center, received CRA funding.