While there is no star for “blight” on the Hollywood Walk of Fame, blight is prominent in the neighborhood.

The Second District Court of Appeal has upheld an amendment to a two-decade-old redevelopment plan for Hollywood. The court accepted the City of Los Angeles’s findings that physical and economic blight still exist in the project area. The court also rejected other challenges to the plan amendment and the city’s administrative process.

The decision marks the second time that the Second District has ruled in favor of the city in a Hollywood redevelopment plan validation lawsuit. Fifteen years ago, inMorgan v. Community Redevelopment Agency, 231 Cal.App.3d 243, the court upheld the original redevelopment plan (see CP&DR Court Cases, July 1991; Deals, November 1990). Some of the same litigants were involved in the most recent lawsuit, and they used some of the same arguments.

In 1986, the Los Angeles City Council approved the 1,100-acre Hollywood redevelopment project. In 2003, the council approved a plan amendment that extended eminent domain power for 12 years, extended a time limit on incurring debt, and updated the land use map and redevelopment plans to conform with the city’s general plan.

Robert and Betty Blue, who own businesses in the project area, and resident John Walsh sued. They argued that the city’s process was faulty, that the city should have formed a new project area committee (PAC), and that the amendment violated the purpose of the Community Redevelopment Law. The opponents also contended that there was not substantial evidence regarding the presence of blight, whether private enterprise alone could redevelop the area, and redevelopment’s economic feasibility.

Los Angeles County Superior Court Judge Andria Richey ruled for the city. On appeal, a unanimous three-judge panel of the Second District upheld the trial court decision.

The court first dealt with the process. The opponents argued that the L.A. Community Redevelopment Agency (CRA) did not make available raw data from a field survey, a move that precluded the public from commenting on the physical condition of the project area. Opponents also argued that they did not have sufficient time to review a report to the City Council.

The court ruled that no statute, regulation or case law required the agency to release raw data to the public. The opponents could have sought such information under the Public Records Act, but they did not, the court noted. The reports and information that were made available satisfied the statutory requirements in Health & Safety Code §§ 33457.1 and 33352, and were adequate to permit public testimony, the court ruled.

The report to the City Council was released about 14 days prior to the public hearing, even though the CRA had said it would provide 30 days for review. Still, “there is no specification as to how long before the hearing the materials must be made available to the public,” Justice Joan Klein wrote for the court. Except for David Morgan (a litigant in the first lawsuit and this one), who asked for an “outlandish” three-year continuance, no one at the public hearing requested more time, the court noted.

“Further, as the trial court noted, plaintiffs and other members of the public submitted extensive comments, which ‘belies their contention that they had insufficient time to review and respond to the materials at issue,’” Klein wrote. Besides oral testimony, more than 2,000 pages of comments were submitted, the court noted in upholding the city’s process.

The court next dealt with the formation of the PAC. State law requires formation of a PAC if a redevelopment plan provides authority for the agency to take by eminent domain “property on which any persons reside,” or if a redevelopment plan will displace a substantial number of low- or moderate-income persons. The CRA argued it did not have to form a PAC because its eminent domain power in Hollywood could not be used to acquire property on which any person lawfully resides. The opponents argued that use of the term “lawfully resides” was a rewriting of state law. The court sided with the city.

The court then reached the issue of blight. The city first argued that it did not have to provide new blight findings (even though it did provide findings) because the original findings from the 1986 project area adoption were final and conclusive. But the court, citing Boelts v. City of Lake Forest, (2005) 127 Cal.App.4th 116 (see CP&DR Legal Digest, April 2005), said that original blight findings are conclusive only until a timely validation lawsuit is brought pursuant to a redevelopment plan amendment.

The court then considered whether substantial evidence supported the city’s new blight findings. Opponents contended the evidence was inadequate because there was no proof buildings in the project area are unsafe or unhealthy for people to live or work in. The court called the argument “unpersuasive.”

“[T]he record reflects 50% of the buildings in the project area are deemed to be in need of at least moderate rehabilitation, and 13% require either extensive rehabilitation or are dilapidated. The report included maps showing the condition of each building and parcel in the project area,” Klein wrote. Based on this information “the City Council reasonably could conclude that physical blight exists.”

The city proved economic blight, the court ruled, by showing that there was little building activity from 1987 to 2001 other than CRA-assisted projects, real estate sales prices were about half that of competing areas, and vacancy rates were high. Similar evidence supported the city’s finding that blight could not be eliminated without redevelopment, the court ruled.

The court further ruled that the city’s finding of economic feasibility was sound, and found no merit in the argument that the plan amendment violated the purpose of state redevelopment law because it tried to capitalize on Hollywood’s entertainment history.

Finally, the court ruled that Walsh and Morgan were liable for about $4,200 apiece in trial court costs. The Blues were not liable because they are property owners, and property owners are exempt from liability for costs in redevelopment validation actions.

In March, Robert Blue, who owns a luggage store at Hollywood and Vine, sued the city over the environmental study for a mixed-use redevelopment project. The CRA is attempting to take his property through eminent domain to accommodate the project. Blue contends the 80-year-old building is historic and the city should restore it.

The Case:
Blue v. City of Los Angeles, No. B180319, 06 C.D.O.S. 2490, 2006 DJDAR 3573. Filed March 1, 2006. Change in judgment issued and publication ordered March 24, 2006.

The Lawyers:
For Blue: C. Robert Ferguson, (909) 482-0782.
For the city: Susan Pfann, city attorney’s office (213) 485-5416.