Riordan Expands Subsidies to Help Revive Inner City

The mayor’s office says that it is ahead of schedule in bringing back to life a group of large, vacant inner-city parcels that it has targeted, and is therefore expanding its efforts to draw developers to Los Angeles by offering them a variety of public subsidies.

The efforts, known as Genesis L.A., began a year and a half ago when Mayor Richard Riordan announced that his administration would focus on 15 major unused or under-used industrial, office and retail sites.

At that time, Riordan set goals of generating $250 million in private investments and creating 5,000 jobs at the sites by next spring.

Saying those goals have already been met with the actual or planned revivals of five of the properties, the mayor is scheduled to announce today that he is adding six more parcels to his development target list.

“Our inner city is the next frontier for economic development, and with Genesis L.A., we are creating hope and opportunity where little existed before,” he said.

Added to the list, the mayor’s office said, are:

* A debris basin in the northeast San Fernando Valley, at Bledsoe Street and Encinitas Avenue, that will be the home of a Sylmar biotech firm that had been planning to move out of the city to Santa Clarita.

* A former railroad freight yard on the east side of downtown that will be the site of a new campus for an architectural university, SCI-Arc, that plans to relocate from Marina del Rey.

* A site at Pico and San Vicente boulevards where a two-story building housing both a Home Depot and a Costco is planned.

* A retail center already under construction at Western and Slauson avenues in South Los Angeles to be anchored by Home Depot and a Ralphs supermarket.

* And two industrial parks: one at 930 E. 111th Place, which does not yet have a developer, and the other, a former dump site, at San Fernando Road and Branford Street in Sun Valley.

Deputy Mayor of Economic Development Rocky Delgadillo said subsidies are necessary to help make the costs of developing such sites comparable to the costs of developing never-used land in outlying areas. Some of the inner-city sites are polluted and developers face increased cleanup costs. At others, existing structures have to be demolished.

But he said the biggest problem the city faces in interesting developers in such sites is “the perception that there isn’t a market here. . . . In some cases, we’ve had to drag these guys through the analysis” to show them they are wrong.

The mayor’s office publicizes a variety of subsidies, including various state and federal tax credits. However, Jeffery Walden, director of the mayor’s business team, said that, on the original five properties, $305 million in private investments was generated with only one public subsidy: a $1.6-million federal grant.

The mayor’s office plans to use the services of a for-profit investment firm, Shamrock Holdings Inc., which the mayor’s office said expects to finish raising $100 million within two months to invest in low- and moderate-income areas. Its principal investors include major banks.

It also relies on corporate donations to a nonprofit, Genesis L.A. Economic Growth Corp., which Riordan hopes will continue the work after he leaves office next year.

The mayor’s office said it would announce today that McDonald’s Corp. has become the first retailer to donate $1 million to the nonprofit--an amount that will enable it to hire a staff. Banks have previously made pledges.

Delgadillo said the initial job creation and private investment goals were reached through developments at:

* Taylor Yards, former railroad yards adjacent to Cypress Park, where Federal Express has built a distribution center, a name-plate maker has built a factory and an industrial park for telecommunications firms and a multiplex theater are planned. Nearly 500 of a projected 2,000 jobs are already in place.

* A former defense industry plant at 16555 Saticoy St. that has been purchased by a developer. Light manufacturing businesses at the site are planning expansions projected to yield 1,350 new jobs.

* A mixed-use site surrounding the Fedco at La Cienega Boulevard and Rodeo Road that was looted in the 1992 riots. A Target department store is under construction and a McDonald’s restaurant is planned, and at least four “dot-com” companies have committed to locate in new campus-like structures. More than 1,300 jobs are anticipated.

* The historic Southern California Auto Club Building near USC, where new investments have created 275 new jobs.

* And the former United Parcel Service distribution center at Washington Boulevard and Soto Street, which has been retailored to suit smaller distribution firms already in operation and providing 175 jobs.

Progress at the 10 other sites among the original 15 has been mixed, Delgadillo said. “Some may not happen,” he said. “We do not count them as successes unless there is a signed deal that is anticipated to deliver a certain amount of jobs and investment.”

The mayor’s efforts got generally favorable reviews from economists.

Jack Kyser, chief economist at Los Angeles County Economic Development Co., praised the efforts to recycle “what I would call difficult sites . . . that might have just sat there . . . getting them into the main stream, creating tax revenue, creating jobs.”

David Runsten, an economist at UCLA who has done recent studies on redevelopment in Los Angeles, said that the basic idea of redeveloping inner-city industrial land is sound, but that the public should be consulted on the type of redevelopment if public subsidies are used.

“If there’s no public subsidies going into them, who’s to object?” he said. “It’s just a normal real estate development in Los Angeles. If the mayor’s office is facilitating that, fine. But if we’re going to put large amounts of public money in it, we should have public discussions.”

Although the mayor’s office said only $1.6 million in public subsides had been used in the first five projects, Runsten said he had identified $85 million in public money that the mayor’s office had targeted for its original list of 15 sites.