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Among the good news coming out of Sacramento this week was the Sacramento Bee’s report that Gov. Jerry Brown wants to eliminate the hundreds of redevelopment agencies that suck money from the schools for the benefit of land developers.
Redevelopment is a huge boondoggle. I learned that in the ‘90s from my friend and news source, the late Norton Halper, who used to drag me over to the Hollywood Denny’s and force-feed me the redevelopment story. Norton was the greatest of L.A.’s city hall gadflies, badly missed today.
Redevelopment was conceived as a way of clearing so- called slums. Too bad Norton is not alive. He would have loved visiting Chinatown, where the Los Angeles Community Redevelopment Agency has actually created slums. Two old, once-popular restaurants, Little Joe’s and the Velvet Turtle, have long sat there, rotting and abandoned, while the CRA and the developers are engaged in an incomprehensible dispute that will certainly cost the taxpayers money.
City redevelopment agencies acquire such land either through purchase or condemnation. They do this by labeling the land “blighted.” Developers then can buy the land cheap from the redevelopment agencies . The redevelopment agencies float bonds to pay for streets, sewers and other infrastructure. If the land increases in value, the increased property taxes pay off the bonds. If the deal doesn’t work out—as so many don’t—then the redevelopment agency and the taxpayers are on the hook. The agencies claim to create jobs but can’t prove how many.
The most famous example of a phony redevelopment deal was in the City of Industry. The city annexed huge amounts of largely rural land , declared it blighted and made it a “redevelopment area.” Hotels, warehouses, office buildings and a possible National Football League stadium are the beneficiaries. The losers are the impoverished school districts around Industry, deprived of property tax revenue that is being used to pay off the bonds. In L.A., Hollywood was declared blighted, and developers there benefited from huge undeserved redevelopment subsidies. The fact is, Hollywood, being on a subway line, would have redeveloped by itself.
Governor Brown is on the right track. Close down all the redevelopment agencies. Let redevelopment beneficiaries like billionaire Phillip Anschutz, who owns downtown’s LA Live and Staples Center, finance their own projects. If we end the subsidies, we can put the money to better use—the schools.
