$25-Million Loan to Haagen

Recent letters (July 29) regarding approval by the Los Angeles County Board of Supervisors of a $25-million “float loan” to Coliseum Commission President Alexander Haagen (GDH Haagen Partnership) to restore five former Gemco stores to retail use are unfairly critical of board members.

Citizens’ concerns relate to the source of the funding, the use of the money and the process of awarding the loan. The funds come from the federal Community Development Block Grant program, which is administered locally by the Los Angeles County Community Development Commission. Money allocated but not yet expended--about $30 million in our case--lies dormant in a non-interest bearing line of credit in Washington, D.C. With approval from the U.S. Department of Housing and Urban Development, we can loan these funds out for eligible purposes--namely to benefit low-and-moderate-income people and to eliminate slums and blight.

One letter writer makes a quantum leap in his effort to connect the controversy surrounding the seating arrangements at the Coliseum to efforts to reopen badly needed retail outlets, providing jobs to low-income people. The two issues are totally unrelated. CDBG funds cannot be used for Coliseum improvements; they can be used for jobs as provided by the reopening of the former Gemco stores.

That letter and another questioned the fairness of and the time allotted to the selection process. In fact, the Community Development Commission began publicizing the float-loan program in February, 1986. More than 30 meetings were held with representatives of cities and developers to elicit proposals, but no proposals were forthcoming. We then engaged the National Development Council, which has a successful track record in CDBG float loans, to identify viable projects. Out of nine development possibilities, only the Haagen firm met the strict requirements.

The Board of Supervisors, concerned that there was only one acceptable proposal, directed us to obtain more proposals. This time, more than 200 developers were contacted. Far from showing favoritism to a political contributor as alleged by another letter writer, the board bent over backward to assure impartiality.

Because of the board’s stand, 965 low-and-moderate-income jobs will be created. The county will earn $2 million in interest, which will be used to enhance the county’s CDBG program. These jobs and funds would not have otherwise been available.

DAVID N. LUND

Executive Director, Community

Development Commission

County of Los Angeles