City Sets Sights on CRA Funds to Pay for Services : Government: Pressure is growing to tap the redevelopment agency's resources to pay for police and fire operations. Some question legality of such action without legislation.

By FRANK CLIFFORD

Feb. 23, 1992 12 AM PT

TIMES STAFF WRITER

In the midst of the worst budget crisis since the passage of Proposition 13, city officials are under growing pressure to tap the vast resources of the Community Redevelopment Agency--a move that could free millions of dollars for police and other city services, but which could also cloud the CRA’s future.

The CRA’s $400-million annual budget could go a long way toward easing the city’s budget woes at a time when 10% cutbacks in municipal services are threatened. But some argue that diverting the money could be unlawful and jeopardize the council’s control of the redevelopment agency’s funds.

The pressure to use CRA funds to pay for more police is greatest in Hollywood, where the agency has authorized the expenditure of $900 million over the next three decades to rebuild the area’s blighted commercial core. During the past year, Hollywood has suffered a sharp increase in violent crime, particularly street robberies.

Supporters and detractors of Hollywood’s proposed redevelopment agree that unless crime is brought under control, things will get worse, perhaps dashing any hopes for turning the neighborhood around.

For City Councilman Michael Woo, who represents Hollywood and will probably be a mayoral candidate, the situation presents a timely challenge. If he can find the extra money to fight crime in Hollywood, Woo would be able to demonstrate leadership in a crisis, something his critics say he needs to do more often. And his example could help light the way out of the city’s projected $150-million budget deficit.

But Woo has not directly sought CRA funds. Instead, he has lent his support to a bill in Sacramento that would broaden the powers of the CRA to do a number of things, including spend money to fight crime. The bill could take most of the year to wend its way through the Legislature and is similar to one that died in the Assembly a couple of years ago.

Woo maintains that it is illegal to use CRA funds to pay for city services unless such legislation is passed.

In the meantime, Councilman Nate Holden, a second potential candidate for mayor, has drafted a proposed city ordinance calling for the use of CRA funds to supplement police, fire and other essential city services.

And another possible mayoral candidate, Councilman Zev Yaroslavsky, said he does not think legislation is necessary to permit CRA funding of certain city services--ones being provided in parts of the city such as Hollywood, where redevelopment projects are under way.

“It’s not a question of law. It’s a question of attitude,” Yaroslavsky said. “If you’d rather use the money for big-ticket real estate projects than for services, then you’ll say it’s illegal.”

Lately, even the Hollywood Chamber of Commerce, a leading advocate of redevelopment, has appealed to the CRA to do something about the crime problem.

“Until we solve the crime problem, nothing else is going to happen, including redevelopment,” said Brooke Knapp, president of the chamber.

Jim Wood, chairman of the CRA’s board, said he thought it would be possible to use agency funds, at least on a temporary basis, to pay for police services in Hollywood that are not being funded by the city.

“I am not hesitant to use agency resources to address the crime problem if it is an impediment to redevelopment,” Wood said.

But Wood advised against the use of agency money to help bail out the city’s ailing general fund.

“I don’t think using the agency’s tax increment funds to solve the city’s financial shortfall would be appropriate or legal.”

Woo’s more circumspect approach to the issue has angered people in Hollywood, who point out that CRA financing of anti-crime projects in other parts of the city has not required legislation. These projects, including a mounted police detail in downtown Los Angeles, were justified by CRA officials as temporary “pilot projects” that did not constitute regular city services.

“I’ve been in my building 30 damn years, and now I’ve got to move out because there aren’t enough police, and the councilman won’t do anything about it,” said Don Lippman, who has been burglarized three times in the past two years. “It certainly shows you something about a politician’s priorities.”

Crime in Hollywood is up more than 14%, compared with an 8% rise citywide. Robberies in Hollywood are up 25% and burglaries nearly 20%.

Woo’s caution typifies the council’s traditional approach to the financially powerful CRA. Council members have been quick to make the politically popular argument that the agency spends too much public money subsidizing private real estate developers. But when it comes to appropriating CRA funds for other things, the council has tended to heed the advice of its lawyers not to act hastily.

“In redevelopment law there are paragraphs that say crime and other social ills should be addressed, but there is no expressed authorization as far as spending money,” said Deputy City Atty. Dov Lesel.

Any misuse of funds by the CRA could jeopardize the agency’s ability to receive property tax revenue, the source of its financial strength. For years, Los Angeles County and other taxing agencies have laid claim, unsuccessfully, to the CRA’s tax revenue. The CRA could be forced to forfeit its hold over the revenue, Lesel said, if the agency spent the money improperly.

In the hands of the City Council, which oversees the CRA, redevelopment funds are a source of political power, allowing council members to finance major real estate developments, create jobs and subsidize affordable housing projects.

Woo fought hard to land the Hollywood redevelopment project. And now his critics are saying he would rather protect the CRA’s proposed investment in new theaters, shops and restaurants than take an aggressive stand against crime.

“Woo’s approach is a cop-out,” said Norton Halper, a longtime foe of the Hollywood redevelopment project. “I think you could use some of that $900 million for police protection, and I don’t believe it would be illegal to do so.”

Woo said he is basing his approach to the crime problem on the advice of lawyers in Los Angeles and Sacramento who are experts on redevelopment law.

He also said he is suspicious of the motivation behind the push to tap CRA funds for crime-fighting, pointing out that some, such as Halper, would not be unhappy if the Hollywood project were derailed as a result of a misuse of agency funds.