Proposals to create redevelopment project areas for earthquake-damaged neighborhoods in the San Fernando Valley are coming before the Los Angeles City Council for deliberation, sparking controversy over whether redevelopment is an appropriate tool for rebuilding efforts. The strongest protests, thus far, have come from Sherman Oaks, where about 40 demonstrators paraded in front of Councilman Zev Yaroslavsky's field office Monday to oppose a 900-acre project proposed for Sherman Oaks and Studio City.

Hours of angry testimony during a Tuesday public hearing then delayed a City Council decision on the project.

The delay signaled an uphill battle for five additional redevelopment area proposals for "ghost town" communities throughout the Valley and in Hollywood, as residents and City Council members expressed concerns over the Community Redevelopment Agency's poor reputation in managing previous projects.

Is redevelopment an effective tool for earthquake recovery?

Nancy Schmidt, president of the Sherman Oaks Chamber of Commerce:

"Many multifamily dwelling owners in the 'ghost town' areas of Sherman Oaks cannot obtain adequate financing to restore their property. If (the buildings) just sit there, they'll be occupied by vagrants or become a nuisance. The CRA is one of the many ways to rehabilitate property. There will be at least $12 million available. The whole agenda is to restore the neighborhood to what it was on Jan 16. Why discard a financial resource to help get us back there?"

Matt Epstein, co-chairman of the CRA Investigative Committee in Sherman Oaks:

"I've spoken to at least 1,000 home and business owners about redevelopment, and maybe a dozen support it. The Sherman Oaks plan allows the CRA eminent domain, which gives them authorization to go in and seize property, putting them in the real estate business. Once they own the property, the (developer bidding process) requires an agency to have prior experience with redevelopment. This excludes private investors and favors major contractors. The CRA reports that there are 800 multifamily residential units and 200 commercial buildings in need of assistance in Sherman Oaks. Our own survey determined 47 multifamily units and seven commercial buildings await repairs. Numbers shouldn't be exaggerated to cause hysteria."

Harry B. Coleman, co-chairman of the North Valley Property Owners Coalition: