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SEE CORRECTION APPENDED; Organizer's name--The last name of an organizer from the Los Angeles Alliance for a New Economy was reported incorrectly in a March 18 Column One on community groups seeking concessions from developers. Her name is Lizette Hernandez.
The light industrial park that Randall Roth plans for a weed- strewn corner of the San Fernando Valley will yield more than sturdy new buildings and freshly paved parking spaces.
Roth also will pay for a youth center and drainage improvements. Tenants will hire locally, and Roth has promised that 70% of jobs at the site will pay the city's living wage--a substantial premium over minimum wage.
The extras are among a long list secured by a coalition of residents and labor and community activists. It is the third Los Angeles neighborhood benefits deal negotiated in the last year, placing the city at the front of a burgeoning national movement to demand more in return for the billions of dollars in annual economic development subsidies.
For decades, government economic development strategies were aimed largely at promoting business expansion, with the assumption that jobs and other benefits would follow. Now, those receiving public dollars increasingly are being called on to deliver improved wages, health benefits, subsidized housing, child-care centers and parks.
Not surprisingly, the new demands are causing some grumbling among developers. Saddling their projects with more fixes for civic problems drives up the cost and frequently sends them looking for even more public subsidies.
"There is a cost that could be too high," said Larry Kosmont, a consultant whose Los Angeles-based Kosmont Cos. is working a dozen development deals across California, each with a proposed public subsidy of $5 million to $15 million.
But community groups, increasingly supported by politicians, say it's payback time.
Cities hungry for jobs and higher sales taxes long have offered free land, tax breaks, sidewalks, street lights and power hookups to entice new development. Billions more has been spent on sweeteners to prevent companies from border-hopping to neighboring cities or states.
States paid more than $26 billion in grants, tax abatements, low- interest loans and other incentives in 1996, said political scientist Kenneth P. Thomas, a fellow at the Center for International Studies, University of Missouri-St. Louis.
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