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Bernardi Gets Court Victory Over CRA : Downtown: The ex-Valley official jolts agency's renewal plans.

October 12, 1995|JOHN SCHWADA | TIMES STAFF WRITER

Ernani Bernardi, the 83-year-old retired dean of the Los Angeles City Council, has scored an extraordinary court victory over the Los Angeles Community Redevelopment Agency, a surprise legal jolt that has top officials scrambling to save future renewal plans for the Downtown business district.

A Los Angeles Superior Court judge last week sided with Bernardi, ruling that California courts are powerless to undo a 1977 agreement the former councilman forced on the CRA that called for the agency to end its ambitious redevelopment effort in the central business district after it had spent $750 million.

For Bernardi, who represented the central San Fernando Valley for three decades, the ruling was a milestone win for his anti-CRA campaign, funded in part by the sale of videotapes of 1940s-era swing bands and operated out of his document-cluttered Van Nuys home.

It was a victory big enough to gall and frustrate Warner Bros. Senior Vice President Dan Garcia, CRA board chairman and confidant of mayors.

"So Bernardi thinks he's smarter than the state of California, the county supervisors, smarter than the mayor and City Council!" Garcia fumed sarcastically. "I question his motivation. This is all about his undying hatred of the CRA."

"Let's face it," said real estate attorney Doug Ring, whose Downtown clients are working on projects with the CRA. "This has a crippling effect on the agency's ability to do new projects Downtown."

Dov Lesel, the CRA's top legal adviser, said the ruling vests in Bernardi the power to checkmate the will of the Los Angeles City Council, the mayor and the County Board of Supervisors.

"It's an extraordinary decision," Lesel said. "The judge in effect said that no court in all the land has the authority to modify the agreement [unless] all the parties agree to such modifications."

With so much at stake, the CRA is preparing to file an appeal to rescue its Downtown project from extinction.

The 1977 agreement bars the CRA from spending more than $750 million in its 1,549-acre Downtown redevelopment zone, roughly enclosed by the Hollywood, Harbor and Santa Monica freeways and Alameda Street. The ruling does not affect the CRA's 22 other projects scattered throughout the city, including its North Hollywood and Hollywood projects, as well as Downtown's other redevelopment project on Bunker Hill.

Bernardi also has his hand in the North Hollywood zone. Later this month, the City Council is scheduled to decide whether to extend the life of the North Hollywood project for another 12 years. If the extension is granted, as is expected, Bernardi has vowed to help lead a homeowner effort to rescind it by putting the issue before the voters.

For now, though, Bernardi's court win hits the CRA hard because the agency has reached the $750-million spending ceiling in its premier Downtown urban renewal zone. Without an increase in the ceiling, the agency is effectively barred from engaging in new projects in the central business district.

And the CRA contends that its job of revitalizing Downtown is not complete.

At least hundreds of millions of dollars in additional spending are needed to finish the job, including plans to build low-income housing and a hotel complex next to the city's vast new Convention Center, say agency officials, Mayor Richard Riordan's office and Councilwoman Rita Walters, who represents the area.

Redevelopment agencies principally raise money by using the additional property tax revenue--called tax increment funds--generated by rising property values inside the zone.

In its attempt to lift the spending cap, the CRA first got approval from other government agencies, the city, the County Board of Supervisors and the trustees of the Los Angeles school and community college districts, all of whom have a stake in the property tax revenue generated in the zone.

After winning the support of these other taxing jurisdictions, the CRA went to Bernardi last for approval. Bernardi is a key player because, as a private citizen, he sued the CRA in the 1970s to limit its activities in the Downtown district. To settle that lawsuit, the CRA and then-Mayor Tom Bradley agreed to the $750-million spending cap.

In part, the 1977 agreement said its terms would be "forever binding and conclusive upon the parties hereto."

Bernardi, who retired after 32 years on the City Council in 1993 with a reputation as an irascible, tight-fisted fiscal watchdog, refused to sign off on lifting the cap, forcing the CRA several months ago to go to court to get its way--without Bernardi.

The surprise, however, came last week when Superior Court Judge Florence Pickard ruled that the courts had no jurisdiction to tamper with the agreement without Bernardi's approval.

Garcia and others believe it is unjust that Bernardi can single-handedly frustrate the will of several government entities and their elected officials.

"We're hopeful we can win on appeal," an exasperated Garcia said this week.

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