City’s Deal to Avoid Housing Nears Passage : Exemption: Despite criticism, the Legislature seems set to approve a plan to let Industry pay its way around the law requiring a fixed percentage of low-income units.

CITY OF INDUSTRY —  A school-site-for-housing deal stitched together last year by officials from the City of Industry, Diamond Bar and Pomona is expected to come under attack Wednesday in Sacramento.

The little-noticed agreement resulted in legislation--Senate Bill 1718--that will be the subject of an Assembly committee hearing and vote. So far, the measure has sailed easily and its ultimate approval is in little doubt.

Opponents say the bill would allow Industry, alone among cities statewide, to buy its way out of a state requirement to build low- and moderate-income housing. Under the measure, the city would receive an exemption from housing regulations and would pay the state up to $8 million annually for housing to be built in other cities.

“The City of Industry has been in violation of the law for years,” said bill opponent Ken Willis, executive vice president of the Building Industry Assn. of Southern California. “Now they want to change the law.”

Industry was incorporated in 1957 to foster business and manufacturing along its crescent-shaped boundaries that sprawl along the curve of the Santa Fe railroad tracks and the Pomona Freeway (60). Today, the city has only 77 housing units and 631 residents, including more than 200 who live in a sanitarium.

Willis said his group fears that an exception for Industry could set a precedent by which other cities could avoid building housing.

But supporters say the bill’s approval would bring two benefits to the San Gabriel Valley: money for low-income housing and free land for a badly needed high school in north Diamond Bar.

“Industry is a unique kind of city that doesn’t lend itself to housing tracts,” Industry City Atty. Graham A. Ritchie said. “The benefit to the region would be several million dollars a year available for construction of housing.”

Irv Moskowitz, superintendent of the Pomona Unified School District, whose boundaries include northern Diamond Bar, said two of the four high schools in the 84% minority district are already overcrowded.

“Our kids need a boost and we are happy to have someone helping us right now,” Moskowitz said.

The school district’s need for land was the starting point, Diamond Bar City Manager Terry Belanger said.

With voter approval in June, 1991, of a $62.5-million school bond issue, the district began scouting around for building sites. The only available empty land in Diamond Bar was 850 grassy, hillside acres owned by Industry--part of the old Tres Hermanos Ranch bought years ago by the Industry Redevelopment Agency as an investment.

School district and Diamond Bar officials met with Industry representatives and hit on a novel arrangement: Industry, which wanted to avoid building homes within its city limits, would put 122 low- and moderate-income housing units on the ranch land in Diamond Bar.

In exchange, the school district would get 70 Industry-owned acres near the Pomona Freeway and Chino Hills Parkway for the new high school.

Sen. Frank Hill (R-Whittier), who helped fashion the bill and introduced it in February, said his sole interest is the new school.

“That’s the only reason I’m involved in this bill at all,” he said last week. “I don’t care about low-income housing.”

But the Western Center on Law and Poverty, a Sacramento-based activist group, did care about housing. During committee meetings, they succeeded in getting the bill altered.

Now, instead of transferring 122 housing units to Diamond Bar, Industry will pay the state housing department 20% of the money it receives from redevelopment tax increases, an amount that varies yearly between $6 million and $8 million.

The high school site has been dropped from the bill, but Industry officials say they will fulfill their promise to the school district. The Industry Redevelopment Agency recently voted to spend $2 million of the anticipated $4 million needed to stabilize an ancient landslide on the school site.

The revamped bill has coasted through six legislative committees. Its way was paved by two powerful lobbyists and political fund-raisers hired by Industry. The clout wielded by Hill as a member of a joint budget committee also made for smooth passage.

If approved Wednesday by the Assembly Ways and Means Committee, the bill will go to the Assembly floor within a week for almost certain approval.

But opposition has been mounting.

The Industry Civic Planning Assn., a long-term foe of the Industry plan; the state Department of Housing and Urban Development and several chapters of the Building Industry Assn. object. They say wealthy cities such as Industry, with its annual budget of $50 million, should not be allowed to transfer their housing responsibilities to other cities.

“Every city needs a housing element,” said Willis, head of the builders group. “If they are a city, they should be a city and abide by the same rules of every other city.”

Even the Western Center on Law and Poverty, which pushed for changes in the bill, remains opposed. The transfer is only halfheartedly supported by the group, which has tried for years to get Industry to build housing, center lobbyist Christine Minnehan said.

“We sued them. We’ve done legislation. We’ve worked with local city officials and the department of housing. And all that time and public resources hasn’t resulted in one, solitary stick of new housing or rehabilitated housing (in Industry), “ Minnehan said. “Perhaps housing built somewhere (else) makes more sense than having the money just sit in the bank.”

But Hill believes that the transfer is a realistic approach, given the Legislature’s reluctance to put teeth in the state’s often ignored housing requirements.

“The trend is the opposite,” Hill said. “It’s not to force cities to build but to give them more flexibility.”