`Rebuild L.A.' Group Rebuilds Itself - Again

Organization's problems show how hard it is to revive inner cities

THE organization set up to help rebuild Los Angeles after the riots of April 1992 and touted as a possible national model for urban revitalization is now taking a hammer and saw to itself.

Amid dwindling corporate commitments and enduring criticism over its effectiveness, RLA (formerly Rebuild L.A.) is changing its leadership and focusing more on helping small business.

The moves are drawing favorable responses from some in the minority and business community who have been critical of the organization in the past. But the group continues to stir controversy over what it has and hasn't done 18 months after the worst civil unrest in US history - and serves as a prism for a broader debate over how to rejuvenate impoverished inner-city America.

``Let's face it, urban governments everywhere are having a difficult time doing anything that will stimulate development,'' says Melvin Oliver, a poverty expert at the University of California, Los Angeles.

RLA's evolution underscores the difficulties of reviving blighted inner-city neighborhoods after decades of decay. The task has been particularly tough in the face of a stubborn recession and the limited availability of federal and state funding.

Perhaps as is inevitable after such a cathartic and catastrophic event as a riot, RLA was controversial almost from the start. When former Olympics czar Peter Ueberroth first agreed to chair the private-sector effort, there was an initial flush of enthusiasm in some quarters for the investment it might draw to South Central. But, simultaneously, there was also rancor that RLA under Mr. Ueberroth, a wealthy white businessman from Orange County, couldn't relate to the city's diverse neighborhoods.

Eventually, Ueberroth stepped aside, replaced by an ethnically diverse group of four co-chairmen. Earlier this month, the organization decided to go back to a single head. A search is under way for a new chief.

RLA officials portray the move as a natural evolution of an organization coming out of a politically sensitive year and narrowing its economic focus. Others see it more as a tacit admission that the group's complex, hydra-headed structure - in addition to four co-chairs there is a 13-member executive committee and 96-member board of directors - was too unwieldy, and that urban woes require different tonics.

``There is no corporate salvation for inner cities,'' says Jon Goodman, director of the entrepreneurial program at the University of Southern California. ``It takes folks working with small businesses and community groups to create jobs one by one. It is like digging trenches with a teaspoon.''

Agreeing with the idea of a leaner RLA leadership is Los Angeles's new mayor, Richard Riordan. His office is involved in the search for a new head for the organization. It is also nudging the nonprofit agency to focus more on entrepreneurship, particularly among minorities, and to move away from social programs and trying to lure large manufacturers, which has been difficult.

RLA is doing some of that. Last month, it opened a loan fund geared to small businesses seeking to expand. While the group still intends to buttonhole corporate America, it will concentrate on stabilizing and encouraging bantam-weight businesses.

``In the long term, it is the small businesses that will help build a healthy community,'' says Linda Wong, one of RLA's leaders.

In 18 months, the group has helped bring in some $500 million in corporate pledges, though $200 million of that has not been spent yet by companies. Defenders credit the group with being an important behind-the-scenes broker and helping to draw some businesses to the inner city.

Still, many of the city's riot-zone areas remain in disrepair, and the group has achieved only a fraction of what its own consultants said would be needed to revitalize neglected neighborhoods: $6 billion and the creation of 75,000 to 94,000 jobs.

Many minority and community leaders applaud the reorganization and RLA's new emphasis.

``It is a step in the right direction,'' says Mark Whitlock, who directs another inner-city economic development program.

Others, though, remain dubious. State Sen. Tom Hayden (D) believes that going back to a single chair, if it turns out to be an elder statesman of the corporate community, would only mark a ``return to the patriarchal plantation of the old guard.'' He faults relying mainly on small business to uplift the inner city. He suggests corporations that abandon urban areas be charged an ``exit fee'' to rebuild the ``social debris they leave behind.''

Others such as Dr. Oliver advocate investing in public infrastructure - post offices, theaters, bus systems - to help South Central overcome its economic isolation.