LOS ANGELES -- Property owners along a glitzy but disaster-plagued portion of Hollywood Boulevard are organizing a mass tax assessment appeal that could affect the city's $900 million Hollywood redevelopment project.

Leaders of the appeal movement say they are signing up hundreds of commercial and residential property owners in hopes of gaining a 40% tax reduction.

"The redevelopment agency is in big trouble," said Jerry Schneiderman, president of the Hollywood Boulevard Property Owners Association. "If we get 40%, we wipe out the Hollywood redevelopment project."

Schneiderman said the appeal is based on declines in property values due to the recession, the Jan. 17 Northridge earthquake, the 1992 Los Angeles riots, and recent subway construction problems that have caused portions of Hollywood Boulevard to crack and sink.

The property owners hope to file an official application for reassessment within three to five months.

To guide the massive undertaking, the owners have enlisted the help of former Los Angeles County tax assessor Alexander H. Pope, now a private attorney in Century City.

Pope said the outcome of this case could have a significant impact on more than $48 million in tax increment bonds issued in t992 by the Los Angeles Community Redevelopment Agency's Hollywood project area.

"I suppose it would be very serious for those bondholders," Pope said, "They might be waiting a long time to get paid."

RedeVelopment officials said they are not worried about the solvency of the 1,100-acre Hollywood project.

Peirre Lorenger, the agency's deputy finance administrator, said the Aaa-rated bonds are insured, and that the predicted 40% tax reduction is nonsense.

"I'm not spending any nights awake worrying about it," Lorenger said.

Moody's Investors Service confirmed that the 1992 bond issue is insured by the Municipal Bond Investors Assurance Corp.

The purchase of the insurance policy triggered an upgrade from A to Aaa, the agency's highest rating, said Cheemee Hu, a Moody's vice president.

If the redevelopment agency Could not repay the bonds for any reason, the debt service would be paid by MBIA, Hu said.

The Hollywood redevelopment project, established in 1986, is one of 17 project areas operated by the community redevelopment agency. The project generates roughly $8 million in annual tax increment.

The assessed valuation of property in the project area has increased from $1.2 billion in 1986 to more than $2 billion last year.

The area is bounded by Santa Monica Boulevard and Franklin, La Brea, and Serrano avenues a neighborhood that includes such historic tourist attractions as the Walk of Fame and Mann's Chinese Theater.

In recent years, the Hollywood area has suffered a number of setbacks, beginning in the 1970s and 1980s when many entertainment-related businesses moved north to the San Fernando Valley.

The riots and the earthquake also took a large toll. But, according to some property owners, it was the most recent subway construction fiasco that finally sparked the tax appeal movement,

Construction of the Metro Rail Red Line beneath Hollywood Boulevard was halted on Aug. 18 when portions of the street cracked and sank more than nine inches.

"Over the years, Hollywood has had a feeling of being dumped on, whether it's redevelopment, or Metro Rail, or something else," said Chris Shabel, president of the Hollywood StakeholderS, a coalition of 28 local community groups, many of which have agreed to support or join in the tax appeal.

"Even now, the boulevard is still sinking," Shabel said. "We're just fed up."

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