GARDENA — Six years ago, businessman George Anthony unveiled plans to construct a 16-story hotel here, claiming that the structure would attract corporate clientele and become the town's crown jewel.
Then the problems set in.
Interest rates climbed, investors could not be found, a major bank withdrew its support and, in late 1984, the city failed in its bid to win a $3.5-million federal urban development grant for the project. Anthony doubted that the hotel would ever be built.
But now Anthony, who owns the Eldorado Card Club here, believes that the tables have turned in his favor.
Last month, in a dramatic departure from fiscal policies that have governed Gardena since it was founded 56 years ago, the City Council issued $17 million in tax-exempt bonds, $11.5 million of which were earmarked to build a parking structure for the hotel. Anthony predicts that bulldozers will break ground on the project this spring.
"I probably would have had to give up" on the project without the bonds, Anthony said last week.
For the 72-year-old Anthony, the city's decision to sell the bonds could turn out to be the boost he and his partner, Beverly Hills investor William Peeler, need to make the hotel a reality. For city officials, the decision is part of what they call a larger move on their part to shed Gardena's tradition of fiscal conservatism and lure developers into the 5.5-square-mile city.
"We are going out and using whatever resources or ingenuity we can conjure up," said Paul Tsukahara, a dentist who was elected to the City Council in 1980. "We are using every mechanism that is available."
"The people and council have been very conservative fiscally and their philosophy up to now has been not to get involved in any kind of financing," said City Manager Kenneth Landau, who was appointed last year after serving as assistant city manager for three years. "But the council understands the next five years are very important to Gardena if it is going to increase its tax base."
Pay as You Go
City officials say Gardena has long prided itself on adhering to what boils down to a pay-as-you-go policy with no outside interference or aid. That philosophy was so deep-rooted that Ed Russ, a former councilman and mayor, recalled that it was not until the late 1960s or early '70s that city officials decided to begin applying for and accepting federal grants. "At first they wouldn't even take the grants" he said.
"I think the old home rule applied to that period of time, a feeling of doing everything yourself," Councilman Mas Fukai explained. "They didn't want the state or federal government involved. They didn't want anybody to dictate anything except the City Council."
Fukai and other city officials said it has been a source of pride for city officials and residents that Gardena had managed to avoid any bonded indebtedness over the years. Fukai recalled that when he was first elected to the council in 1974, the city found itself $2 million in debt because it had paid cash for a number of Civic Center improvements. The council had studied the possibility of issuing bonds for the projects, but abandoned the idea in the wake of criticism by some citizens who did not believe it would be a wise move, he said. The city took out a short-term note to cover the deficit.
Residents have also raised objections to the creation of a redevelopment agency that would have allowed Gardena to use tax-increment financing to revive ailing areas in the city. In 1977 voters rejected a proposal to form such an agency by a 2-1 margin. The effort to defeat the measure was led Gwen Duffy, who now serves on the council.
Cash From Card Clubs
Fukai and others say part of the reason for the conservatism of both citizens and city officials was that the city was financially sound, thanks largely to the six card clubs it licensed to operate. Gardena card clubs held a monopoly in Los Angeles County from the 1930s until about six years ago, and have historically provided the city with 25% of its total budget.
But that has changed in recent years as the card clubs experienced competition from bigger casinos in neighboring communities. In the past five years, the portion of the city's $25-million budget derived from the club revenues has dipped to about 8% and is expected to decrease even more in coming years, Landau said. Of the six clubs that had been licensed to operate in the city, only three remain, he said.
Landau said that because of declining card club revenues, the lack of a redevelopment agency and the passage of Proposition 13 in 1978, which severely limited the abilities of cities to raise revenue by increasing taxes, the city has long recognized that it would have to turn to other means to attract new investment.