Hope Rises at Site of New Blythe Street Apartment Project : Panorama City: A 50-unit project with space for job training classes is due to replace existing dilapidated housing.

A glimmer of a brighter future will come to Blythe Street in Panorama City on Monday when site preparation will begin for a new housing project that its sponsors hope will provide far more than shelter.

With 50 family-size units, a recreation room, basketball court, jogging track and 2,000-square-foot community room, the building will provide many amenities that residents of this neighborhood plagued by crime and poverty have long lacked. Child-care services, job training and English as a Second Language classes also will be offered.

“This is the beginning of a new era,” said Roger Nelson, whose company is a partner in the project. “We’re starting to see the fruits of a lot of sleepless nights and gray hairs. It’s really getting exciting.”

Nelson has been working for more than three years to assemble the financing for the $7-million project. About half of the money is in the form of a loan from the city of Los Angeles and $3 million more will come from federal housing tax credits allocated to the project.

Investors who expect to owe income taxes over the next 10 years pump money into the housing project in lieu of the tax payments. That money, along with the city loan, will allow the Blythe Street Partners to obtain commercial financing for the rest of the project’s cost.

City Councilman Ernani Bernardi, who represents the Blythe Street neighborhood, said the housing project “is a very encouraging” event in the process of trying to overhaul the troubled neighborhood.

“It’s what they need, not only there, but in a lot of other parts of the city,” Bernardi said. “Many, many other areas of the city suffer the same problems.”

The problems on this block of Blythe Street, just west of the defunct Van Nuys General Motors plant, are well-known to city officials. The city attorney’s office last week won an injunction giving it sweeping powers to limit the activities of a gang of violent, drug-dealing youths on the street.

That court injunction prohibits gang members from possessing a wide range of otherwise legal tools and objects, such as beepers, that police and city officials believe help them carry out their drug trade. Police say they are working on a plan to begin enforcing the terms of the injunction.

The new housing, on a 1 1/2-acre lot at 14540-14600 Blythe St., will replace 15 dilapidated apartments that typify living conditions on the street. In the past, residents of those buildings have complained of leaky roofs and windows, holes in walls, balky plumbing and infestations of cockroaches and rats.

On Monday, workers will begin removing asbestos ceiling tiles from the buildings in preparation of bulldozing.

Two-bedroom, 875-square-foot apartments in the project will rent for between $309 and $573, depending on the tenant’s income; three-bedroom, 1,100-square-foot apartments will fetch between $367 and $672.

One potential roadblock to the project is the ailing financial condition of Nelson’s partner, the Latin American Civic Assn. based in San Fernando. LACA, which is the area’s largest provider of Head Start classes, was to have provided child-care classes, job training and English as a Second Language classes at the new Blythe Street apartment building.

But Los Angeles County officials pulled LACA’s funding for the fiscal year beginning in June because of alleged financial improprieties and mismanagement. If LACA is unable to provide the services, the city will help line up another agency to step in, city officials said.

At least one lender asked to provide a construction loan has declined, out of concern about LACA and the general condition of Blythe Street. To make the project more attractive to lenders, the city Housing Department is trying to arrange a $2.8-million temporary loan that would need City Council approval. Bernardi supports that loan, making it almost certain to win council backing.

Times staff writer Julio Moran contributed to this story.