Plan Mixes Condos, Public Housing : Urban Renewal: The L.A. Housing Authority wants to replace an aging housing project with a combination of private and public units.

In an unusual public-private partnership, the Los Angeles Housing Authority is negotiating with developers who want to raze the Normont Terrace housing project in Harbor City and replace it with a mix of privately owned condominiums and city-owned public housing units.

The developers say their proposal would mark the first time in this country that a conventional urban housing project has been redeveloped to incorporate condominiums.

And Los Angeles officials say that, if the negotiations are successful and the condominiums are built, the new Normont Terrace could pave the way for similar redevelopments elsewhere in the city’s 21-project public housing system.

“This is a new and exciting development for Los Angeles,” said Carl D. Covitz, chairman of the Housing Authority’s board of commissioners. “It’s an opportunity for the tenants there to be able to live in an environment that will be far better than it is today. . . . They will have an opportunity to live there (like) any homeowner.”

The 400-unit Normont Terrace project, on a 37-acre tract of land that runs along Pacific Coast Highway not far from the Harbor Freeway, was built in 1942 as temporary military housing. Tenants say the old World War II barracks are in need of serious repairs and are so old-fashioned that the bathrooms don’t have showers--only tubs.

City officials have been talking about redeveloping Normont Terrace for several years. Gary Squier, acting executive director of the Housing Authority, said Normont Terrace is an especially good candidate for redevelopment because of its prime location; it sits on a knoll and even has a “water view” of nearby Machado Lake in Harbor Regional Park.

In May, the Housing Authority began evaluating bids from private developers. Two weeks ago, after narrowing the choices to two, housing commissioners selected the bid of a consortium, which calls itself Normont Community Housing Partners.

The group--composed of Santa Monica-based D & S Development Co. and The Related Companies, which have offices in San Francisco, New York and Miami--now has the exclusive right to negotiate with the city for 150 days. It has proposed a 1,200-unit complex on the Normont Terrace land, with 800 condominiums that would be sold by the developers to private owners and 400 apartments that would be given to the Housing Authority when construction is completed.

Byron Lasky, president of D & S, said the developers envision “a park-like environment” with two- and three-story buildings, day-care centers and parking underneath the apartment buildings. He said the complex would have mostly two- and three-bedroom apartments but also would have some four-bedroom units.

Lasky said the public housing units would be interspersed with the condominiums and would include the same amenities. The condominiums would be priced lower than the prevailing rate, in order to counter any fears investors might have about buying in a project that includes public housing tenants.

With its lower prices, the project may also offer opportunities for home ownership to those who might not otherwise be able to afford it. Lasky said the consortium is predicting a price of $150,000, with an estimated completion date two years away. Currently, Harbor City condominiums sell for anywhere from $140,000 to $180,000, according to another partner in the project.

“We’re convinced that, if you offer sufficient value, owners will be more than willing to live in an integrated environment with public housing tenants,” Lasky said. “It’s kind of an experiment in many ways. It’s a unique opportunity to show what can be done around the United States.”

Similar, although not identical, ventures have been tried elsewhere in the country, most notably in Boston, where the 1,500-unit Columbia Point housing project is being converted into a 1,200-unit complex with 800 market-rate apartments and 400 subsidized units.

But unlike the Normont Terrace plan, that project--now called Harbor Point--received considerable government subsidies and also eliminated 1,100 public housing units. A Boston Housing Authority spokesman said construction is not yet finished, and it is too soon to tell whether the project will be a success. But he added that some of the public housing tenants have apartments with beautiful views of Boston Harbor and the Atlantic Ocean.

And in Montgomery County, Md., the public housing agency has for the last decade been buying existing condominiums for use as public housing units. “It’s terrific,” said spokeswoman Joyce Siegel. “The whole country is looking at it.”

Los Angeles housing officials, meanwhile, say they believe the Normont Terrace proposal contains a key ingredient for success: the backing of the tenants who live there.

Janetta Dobbins, who chairs the Normont Terrace Coordinating Council, said her group has met frequently with the developers and has endorsed the project, even though residents would be displaced during construction, which would take place in phases.

“I know it’s going to be a disruption, but I’m looking forward to returning to something new and up to date,” Dobbins said. “We have leaky roofs, the plumbing’s bad, the wiring’s bad, termites are eating the place up, and they’re not putting any money into fixing the place up. . . . The only thing we ever had was a paint job.”

However, Dobbins said the residents have some worries, particularly about how they will be treated by the condominium owners. That was such a big concern, in fact, that the coordinating council initially favored the proposal of another developer, whose plan called for market-rate apartments, rather than condominiums.

“As renters, we felt threatened,” she said, adding that tenants worried “mainly that the buyers would have more say in the community than the renters do.”

But Lasky said that would not be the case: “There will be no second-class citizens.”

And Squier, the Housing Authority’s acting executive director, said the city intends to ensure that it has a strong voice in the condominium association so that the rights of public housing tenants are protected.

Squier said he is confident that, during the 150-day negotiating period, the city and the developers can reach agreement on that and other issues, such as whether the Housing Authority would own or lease the land. If an agreement is reached, he said, it would probably be at least another year before construction begins.