Advocates of Poor Assail Plan to Revamp Downtown

If the question were put to Los Angeles taxpayers, would they approve spending almost $2 billion in property taxes to finance downtown luxury condos, glittering night-time plazas and multimillion-dollar face lifts for private industries like the garment district?

Or would taxpayers approve such a spending plan downtown if it were paired with $2.1 billion for low-cost rental housing citywide, plus several hundred million for child care?

Many city leaders, led by Mayor Tom Bradley, say yes.

The Legal Aid Foundation of Los Angeles, Congress of California Seniors, National Coalition for the Homeless, L.A. Homeless Health Care Project and many others say no.

The two sides--the powerful forces of City Hall and the not-so-powerful forces representing renters, working families and the poor--are squaring off over one of the nation’s costliest plans to funnel public money into downtown revitalization.

The twist in this $4.25-billion conflict is that taxpayers have no direct say.

If the mayor in coming months can persuade a judge to change a court-imposed limit that prevents the city from spending more than $750 million to redevelop downtown, an extra $4.25 billion will flow like so much honey to the Community Redevelopment Agency over the next 20 years.

Bradley and John Tuite, the CRA’s administrator, believe that Angelenos share their downtown vision of a gentrified residential zone, a bustling historic district and a towering commercial cityscape. Recognizing that there are problems elsewhere, they also plan to spend $2.1 billion for citywide rental housing and homeless programs, plus millions for child care.

“This could be a 24-hour downtown rivaling any world-class city, with beautifully preserved historic buildings alongside glass and marble towers,” Tuite said. “We will build it so that downtown workers--professionals as well as the poor--can choose to live there as urban pioneers. . . . And nobody can possibly do that job but us.”

But that vision has galvanized an outspoken coalition of critics who say that, in this sharply divided city of ragtag homeless camps and sumptuous mega-mansions, it is unthinkable to spend billions on programs for the affluent.

Public interest groups, many of them joining forces as the Campaign for Critical Needs, want all $4.25 billion spent on pressing human needs like low-cost housing. Moreover, they question the wisdom of handing control of a massive housing program to the CRA, the biggest builder--and biggest demolisher--of low-cost housing in Los Angeles.

“How can they talk about publicly financed penthouses when working people can barely meet the rent and we’ve got families living in cars?” asked Charles F. Elsesser, a Legal Aid attorney.

The $4.25 billion would come from property taxes churned out over two decades by the new skyscrapers and condos taking shape downtown. Without the CRA’s intervention, the taxes would flow to the county, city and schools. But in the 1990s, under the Gann spending limits, the money would begin reverting to taxpayers.

Giving up those billions is seen by local officials as something akin to scattering it at sea. By diverting the taxes to the CRA, the city can sidestep the Gann limits.

With so much money and power up for grabs, the normally insular redevelopment agency is undergoing unprecedented public scrutiny, and is being held to answer for its uneven record on housing and its perceived arrogance in dealing with the poor and middle class.

Next month, the mayor’s blue-ribbon committee on affordable housing is expected to call for creation of a public body to oversee all housing programs. And in the coming days, a City Council committee will consider a plan to put the nearly autonomous CRA under direct control of the City Council.

At volatile public hearings in recent weeks, CRA officials have been confronted by standing-room-only crowds and denounced by speaker after speaker.

One elderly man, whose apartment downtown will soon be bulldozed under the CRA’s eminent domain powers, told a cheering audience, “I call them the Community Robbery Agency.”

Councilman Filed Lawsuit

In the midst of this political stew is maverick City Councilman Ernani Bernardi, who with Los Angeles County sued the CRA in 1977 during a stormy controversy over downtown redevelopment. In settling, the city reluctantly agreed to a $750-million spending cap for downtown after Bernardi claimed the plan did not serve most city residents, could soar to $7 billion and deserved a citywide vote.

Today, the county is considering going along with the mayor’s plan if the city makes it an attractive financial offer in return. But Bernardi is not yet wavering in his support for the settlement.

“I am more than worried, I am downright suspicious over this raising of the spending cap,” Bernardi said. “If I hadn’t locked the CRA in to $750 million, you would not hear them asking for $5 billion. They wouldn’t bother to ask. And you certainly wouldn’t hear them offering extra money for housing.”

Bernardi questions how much good the mayor’s $2.1 billion for housing--distributed over 20 years--will do the hundreds of thousands of renters who need help now. He also questions how much of what the CRA promises today will actually be built tomorrow.

Councilman Zev Yaroslavsky, Bradley’s likely challenger for mayor next year, also does not want the agency controlling a program affecting the homeless and tens of thousands of renters.

“I don’t believe they’re going to change their (developer-oriented) ways over there,” Yaroslavsky said. “I want to see what I call ‘civilian control’ of housing, because I don’t believe the CRA has an ability or willingness to do it.”

Councilman Robert Farrell, however, defended the agency at a public meeting, saying it “has a long track record of building more affordable housing in this city than anybody.”

No matter who ultimately controls the money, the mayor’s office conceded that $2.1 billion for housing, without meaningful boosts in federal and state help, will not be enough to rescue the city from a high-rent crisis that has put an economic chokehold on working-class and poor families.

“If the cap were raised, we would get $80 million to $90 million for housing each year--about matching what we have now,” said Gary Squier, Bradley’s housing coordinator. “But to be honest, we need $300 million a year just to maintain the terrible housing situation out there today.”

Bradley failed to respond to numerous requests for his comments on the city’s rental crisis, and is known to be awaiting the report of his blue-ribbon committee. However, the mayor has said that if the city does not proceed quickly on low-cost housing, “it will be too late.”

The City Council, which must approve Bradley’s $4.25-billion plan, is not likely to side with the Campaign for Critical Needs when a decision is made next year. The council already supports the concept of using $7.1 billion to redevelop more of downtown.

Development Questioned

Even so, outside the confines of City Hall, some observers are asking why a downtown core draped in architectural finery is of such compelling importance to Los Angeles.

“My great fear is that Bradley and Tuite are driven by this crazy dream--I don’t know where they got it--that everybody in Los Angeles wants to spend billions to yuppify downtown while the county is fighting to keep things like trauma centers open and average people can’t buy a home,” said Allan Heskin, a professor of urban planning at UCLA and a supporter of the Campaign for Critical Needs.

Such critics are bucking the opinion of some economists and urban planners, who say tax-supported downtown revitalization--while often creating windfalls for developers and campaign slogans for politicians--can benefit a whole region if done wisely.

“Downtown workers will be able to live near their jobs, and that’s dealing with our traffic problems and our air pollution,” said Deputy Mayor Mike Gage. “And the poor will get low-skilled but well-paid jobs we and the CRA hope to see.”

Gage said the money could be used to help the garment industry and flower markets upgrade their operations, and expand the fish-processing industry. A large portion, perhaps as much as several hundred million, could go to child care programs.

But Bernardi and many others say that the rapidly transforming downtown needs no more help from taxpayers.

“Downtown will recover by itself, but the only question is when?” Gage countered. “And who is hurt while we wait? A lot of poor folks, for one thing.”

However, critics question how much help the CRA really provides to those who live with blight. In particular, the agency is dogged by its role as the city’s biggest destroyer of low-cost housing, which it has torn down on street after street to further redevelopment.

According to city records, the CRA has caused the citywide destruction of 11,240 low-rent units, and has built 10,700, for a net loss after more than a decade of construction effort.

Beatrice Kressner, 75, said she will “never forgive the CRA in all my life” for tearing down a house and apartment owned for three decades by her family, to make way for a Pep Boys complex in the Pico-Union area. The property had afforded Kressner and her niece a small living from rents, which also helped pay off a renovation loan.

In what has become a tragic standoff, the two women have for six years refused to accept a $126,000 legal buyout from the CRA, saying it was not enough to replace the buildings. But with their rental income gone, their renovation loan has not been paid and mounting interest is eating up the $126,000. It sits, untouched, in a court-protected account.

Elsesser, the Legal Aid attorney, said the CRA “has never been any good at working with people who don’t fit their system.”

Threatened to Sue

He said that when the city forced 400 poor families from their homes this year to make way for expansion of the Convention Center, “We had to threaten to hold the whole project up with a lawsuit” before the CRA agreed to build replacement rental units that gave the previously overcrowded families normal amounts of space.

“They were dead set against it . . . and their attitude was, ‘We don’t have to do this, this is not required by law,’ ” Elsesser said. “Our leverage was to try to hold up the Convention Center, which really got their attention.”

Supporters of the CRA, like Planning Commissioner Daniel Garcia, say tearing down aging neighborhoods is an inevitable part of rebuilding a downtown area.

“They are either going to be razed for commercial or for housing, because downtown property is hot,” Garcia said. “At least the CRA is willing to commit to housing, when everyone else wants to do commercial.”

Jona Goldrich, whose building firm, Goldrich & Kest, owns thousands of federally subsidized and CRA-financed apartments, said that without the agency’s help on projects like the elegant Promenade Towers on Figueroa Street, “I just would not be building housing in downtown. Why take the risk?”

James Wood, chairman of the CRA, has said that while the critics “talk about housing, we are producing housing.”

There is little question, however, that the CRA has only reluctantly accepted the mantle of the city’s de facto housing agency. Critics say the agency does not fully grasp the interwoven problems of rising rents and land speculation, down-zoning and slow-growth movements that are making the city one of the most expensive in America.

“They’ll pour another $2 billion into downtown, tear down whole areas of affordable housing, then turn around and rebuild that housing someplace else for 10 times the cost of what they’ve destroyed,” said Kimberley Kyle, of the Campaign for Critical Needs. “If that makes sense to you, you should run for City Council.”

Heskin, of UCLA, said he once met with a CRA official to suggest creating low-cost housing in the empty floors of an old Art Deco building in Hollywood.

“A guy from the CRA came out and was real excited about it, but I got the feeling he was not hearing what I was saying,” Heskin said. “Finally he nodded and said that it would be great for artists’ lofts. . . . Artists’ lofts? I couldn’t believe it.”

Bernardi still bristles over a bitter fight he waged to force the CRA to set aside $2 million a year to maintain beds for the homeless on Skid Row.

To get his way, Bernardi three years ago blocked the city’s plans for the 73-story Library Tower--a pet project of the city’s, now under way, that will be the tallest building on the West Coast.

Angrily pounding his fists, Bernardi said: “The CRA accused me of blackmail--as if I had something to gain! Am I yelling? I’m sorry I’m yelling, but I just get so damn mad every time I think about the CRA.”

Most recently in September, Legal Aid lawyers embarrassed the CRA by releasing a report showing that the agency was touting as publicly financed “family housing” what turned out to be thousands of Skid Row hotel rooms--and even sleeping cots--for homeless men.

In the CRA’s defense, Tuite said the agency is required to use misleading government jargon that describes living spaces either as “family housing” or “elderly housing,” regardless of whether they are cots, bachelor units or one-bedroom or two-bedroom units.

But the problem goes beyond a quirk of record-keeping. Lacking guidance from city leaders, the CRA simply has not required developers to create housing based upon size needs.

Tuite said the agency picks projects that “get the biggest bang for the buck.” Thus, of 10,700 low-rent units built, only 525 have three bedrooms or more--the size most sought by low-income families.

Requested Anonymity

The CRA also has a hold over developers, who rely on it for public funds and are reluctant to criticize its policies. More than a dozen builders and neighborhood leaders requested anonymity from The Times when discussing the CRA. With few exceptions, they voiced the fear that the agency would strike back by denying the funds they need to build low-cost housing.

Tuite said the CRA has never done anything to frighten people who rely upon its board for funding.

Nevertheless, the non-elected body has engendered a climate of fear. One nonprofit builder, waiting recently to speak on behalf of CRA at City Hall, whispered, “I’m one of those who doesn’t want to be here. I’d rather get up and say they could run things a lot better.”

Despite such criticisms, a handful of anti-poverty groups have stepped forward to support the agency.

Ruth Schwartz, director of the Shelter Partnership, believes critics are too hard on the mayor and CRA, especially in light of President Reagan’s slashing of housing funds and Gov. George Deukmejian’s vetoes of numerous housing bills, which has left California near the bottom in funding housing.

“Bradley’s $2 billion is the most progressive thing to happen in Los Angeles on housing ever,” Schwartz said. “This is a field where money attracts money, which means the mayor’s $2 billion will bring in investors who have stayed away from housing. It’s a fantastic opportunity.”

Schwartz said that because the CRA has the most experience building housing of any city agency, it is best suited for the job.

John Maguire, the CRA’s housing deputy administrator, said the agency has hired the Center for Law in the Public Interest, a group sympathetic to the poor, to help draw up its $4.25-billion plan. Also, the mayor has asked Tuite to select an advisory body of critics and supporters to lay the groundwork for the spending package.

Maguire pointed to the CRA’s many voluntary decisions to build and renovate housing, not only for the homeless, disturbed and elderly, but for families who cannot pay more than $400 in rent--”Housing that nobody else is building.”

The agency is particularly proud of founding the Single Room Occupancy Housing Corp. in 1984. The nonprofit organization renovates and manages old hotels in Skid Row for the homeless and recovering alcoholics, and already operates more than 1,000 rooms.

Although much of its housing has been required by state law or resulted from local pressure, there is no doubt that, compared to many other California cities, the CRA’s housing record is a good one.

Glendale, for instance, spent millions redeveloping its downtown while a severe shortage of housing for the elderly worsened. But because state law did not require low-cost housing to be built by cities which began redeveloping before 1977, the city ignored such needs. Just 575 senior units exist in Glendale, all erected by builders with federal help.

Now, a new state law requires such cities to begin setting aside redevelopment funds to build low-cost rentals, and leaders in Glendale and scores of other communities are grappling over how to go about it.

“Places like Glendale make the Los Angeles CRA look better, there’s no question,” said Larry Gross, of the Coalition for Economic Survival. “But it’s easy to look good when other places are sitting on their thumbs.”

While the CRA has done much more than other cities in sheer numbers, it also faces deeper troubles. The agency’s headquarters on tattered Spring Street is in the midst of the second-largest homeless population in the United States.

With extreme poverty still entrenched in downtown more than a decade after redevelopment began, the CRA is under increasing fire for building housing for the well-off.

According to city records, 40% of the housing financed by the CRA, or more than 7,200 units, was created for those with comfortable incomes, and even the well-to-do.

One study by Legal Aid found that the CRA has built 2,866 luxury apartments and condos on Bunker Hill alone, with many apartments renting for $1,000 to $1,450 per month. Condos are priced at more than $200,000.

High Rents

City records show the agency has built 5,200 luxury units and 2,000 so-called “moderate” units citywide. Although the city considers moderate units to be “affordable” housing, they are built for people making 120% of Los Angeles median income, and rents are too high for many. (For a family of four, median income is $35,500.) The CRA prices its one-bedroom units at $670, and two-bedrooms at $800.

“There’s a lot of mysticism in the CRA’s numbers,” said Heskin, of UCLA. “They like to say: We built 20,000 apartments, we renovated 10,000 homes. But c’mon now, for whom are they really built?”

Downtown luxury buildings have often encountered vacancy and sales problems. The Promenade West condos on Bunker Hill did not sell in the early 1980s and had to be rented out for many years. The Skyline I condos in South Park stirred little interest and took three years to sell.

Under Bradley’s $4.25-billion proposal, the CRA wants to subsidize even more high-end housing, arguing that the downtown will fail if it is home only to the poor.

The CRA has asked that more than $200 million be earmarked to help build luxury units--nearly as much as they suggested for homeless shelters and programs.

Gilda Haas, of Legal Aid, called the idea “grotesque.”

“If private developers with their own investment dollars want to compete in the luxury market, that’s the way this country works,” she said. “Some lose their shirts, some make lots of money. But it is unconscionable for the city to be doing it.”

Most of the units would be built in the CRA’s long-planned South Park community, envisioned as a mixed, but mostly gentrified, residential zone in what is now a largely dilapidated area south of 8th Street.

“If you don’t make housing for all kinds, you will keep the rich on the Westside and the poor downtown,” said Jona Goldrich. “The professionals will all leave here at 6 p.m. and you will have all the dark buildings and the crime,” said the developer, who with CRA’s help is building the rose-colored Grande Promenade tower on Bunker Hill, where one-bedroom apartments will rent for up to $1,000 a month.

Former County Assessor Alexander Pope, a longtime resident of the CRA-backed Bunker Hill Tower condos, said people thinking of moving downtown will find the atmosphere has already changed from what it was a few years ago.

Walking Distance to Shows

“Our life style is terrific, from going to shows at MOCA, (Museum of Contemporary Art) which we can really walk to just down the way, or to productions at the L.A. Theater Center,” he said.

Pope is among many upscale downtown dwellers who support the mayor’s $4.25-billion plan. But before it can work, he believes the CRA needs to change its basic approach. If the agency does not welcome its critics to the table, Pope said, the plan will serve as a rallying point for those who fear the agency is unable, or unwilling, to attack the housing ills that blight the city.

“The CRA has a 20-year legacy of not addressing people’s problems,” Pope said. “They have never understood that when you tear down even a bad residential neighborhood, it just destroys some people. They’ve got to learn to work with these groups.”

Tomorrow: The homeless, the most visible sign of the affordable housing crisis. HOW OTHER CITIES ARE ATTACKING THE CRISIS IN AFFORDABLE HOUSING EXACTION FEES HOW IT WORKS Cities require that developers erecting large commercial structures pay $5 or $6 per square foot into a fund for affordable housing, or build the low-cost housing themselves. WHERE USED Boston expects to draw $70 million from 34 major development projects. So far, the city has built 1,830 low-rent units. Similar programs exist in San Francisco, Washington, D.C. and Santa Monica. REAL ESTATE TRANSFER TAX HOW IT WORKS A fee is paid into a fund dedicated to low-cost housing whenever transferring real estate. WHERE USED Dade County, Fla., has raised more than $40 million for housing through its commercial real estate transfer tax. Maine, New Jersey and numerous cities have residential or commercial real estate fees. HOTEL TAX HOW IT WORKS Part of the room tax paid to cities by hotels is earmarked for affordable housing. WHERE USED In San Francisco, a hotel tax generates $2.5 million each year to build low-rent housing. CONDOMINIUM CONVERSION TAX HOW IT WORKS Developers who convert apartments to condominiums must pay into housing trust fund. WHERE USED Montgomery County, Md., has a tax on conversion of apartments to condos and has raised $30 million for low-income housing. HOUSING PARTNERSHIPS HOW IT WORKS Corporations and foundations combine money with city funds to produce affordable hou sing. WHERE USED Boston, Chicago and New York all have large and successful housing partnerships. BENEVOLENT LENDING HOW IT WORKS Corporations, churches, foundations and individuals are invited to lend money at low interest rates of 3% or so. The money is used by nonprofit groups to build low-income housing. WHERE USED Jubilee Housing of Washington, D.C. has raised $2 million from 400 small lenders, and Enterprise Foundation of Baltimore has raised $4.5 million, also from mostly small lenders.