Sunday, January 23, 2011
GOP Assemblyman Chris Norby is a former Orange County supervisor with a longtime and deep aversion to California's 425 redevelopment agencies. Some redevelopment zones may eliminate blight and provide low-income housing as originally intended, he concedes, but redevelopment also allows billions of tax dollars to bankroll the building of a lot of half-empty shopping malls, as well as sweetheart deals that pad the pockets of well-connected developers.
As Norby put it, redevelopment served as an "unknown government" that feeds "the most wasteful, the most fraudulent and the most abusive" spending in California government.
When Democratic Gov. Jerry Brown was mayor of Oakland, he was a big redevelopment booster. Now that he's the governor of a state facing a $25 billion shortfall, Brown has found common ground with Norby. The governor is proposing steering $1.7 billion away from redevelopment agencies and into schools, counties and the state.
As Brown told the League of California Cities last week, when he was mayor, he "liked redevelopment. I didn't quite understand it. It seemed kind of magical. It was the money that you could spend on stuff that they wouldn't otherwise let you spend."
Translation: The system rewards local pols whether they spend the money wisely or do not. While boosters say that redevelopment fosters economic growth, the nonpartisan Legislative Analyst's Office recently reported, "we find no reliable evidence that this program improves overall economic development in California."
A 1998 Public Policy Institute report found that redevelopment agencies "generate only slightly more than half of the property tax revenues they receive each year."
So what's to like?
California passed redevelopment laws to combat urban blight, with an added mandate that 20 percent of funds go toward affordable housing. Yet a Los Angeles Times investigation found last year that 120 cities spent more than $700 million on housing without building a single new unit. Cities have declared acres of empty farmland as blight, and some agencies have torn down houses -- like some dilapidated cottages across the street from the home of the mayor of Avalon, on Catalina Island -- without replacing them.
Which gets to a point that sticks in Norby's craw -- some redevelopment agencies use the power of eminent domain to destroy modest homes and shutter blue-collar businesses.
When Brown was mayor, Oakland City Hall voted to seize small downtown businesses -- businesses like the un-tony Revelli Tire -- under eminent domain so that a private developer could build apartments on the land. First-generation American car repairman Tony Fung stood up against Oakland's legion of lawyers, but told me, "There's no way a small guy like me is able to fight that."
These were not blighted businesses -- Brown admitted as much to me at the time -- they were simply small enterprises that were bulldozed, he said, for "a greater good."
No doubt that greater-good spirit has moved more than a dozen cities to fast-track redevelopment projects before -- if -- Sacramento acts. Working on Martin Luther King Day even, Fremont officials approved $133 million for a project near a new BART station.
Can Brown move the Legislature to act against this powerful lobby, which has the support of some pro-business Repubs and some big-government Dems?
"I think everyone agrees that at the redevelopment mechanism has been useful and created jobs," Democratic Treasurer Bill Lockyer said. But: "The last I heard, the University of California and California schools create jobs."
The bad news: Brown also told the League of Cities Wednesday, "You may win on redevelopment and then we take something else away."
Mark Hedlund, spokesman for Senate President Pro Tem Darrell Steinberg, framed the issue well -- it's a choice between "a subsidy for public and private development" and $1.7 billion for education, public safety and child welfare.
So then you dump the corporate welfare. In a report "Redevelopment: The Unknown Government" Norby wrote that the redevelopment status quo "encourages retail developers to expect public handouts."
Enough. Besides, cities still will have the power to push for smart construction projects -- they just won't have a money pot that makes it look free.
Last question: How can you tell if redevelopment funds bankrolled a building? It's new, big and mostly empty.
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See Other Commentary by Debra J. Saunders .
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