Projects fighting for survival

To the Los Angeles Community Redevelopment Agency and its counterparts across the state, Gov. Jerry Brown's plan to shut them down is a mystery.

But it's one that threatens their survival, and so they are fighting it with every political and legal maneuver they can muster.

Brown, looking for cash to help balance the $25 billion shortfall the state is facing, has proposed eliminating the 398 redevelopment agencies in California.

"We can't figure out why he decided to focus on redevelopment," said Chris McKenzie, executive director of the California Redevelopment Association in Sacramento, which lobbies for CRAs around the state.

"What we see is he is going to abolish 398 agencies that operate now and replace them with 398 new agencies, with 398 new oversight boards, made up of people who have no idea what they will be doing. It's a recipe for disaster."

McKenzie added the association, which has been running a radio advertising campaign "My Vote Counts" to oppose the governor, is prepared to go to court to block the governor as soon as legislation is adopted.

"Voters have been very clear that they want to keep local money local," McKenzie said.

H.D. Palmer, spokesman for the Department of Finance, said the governor's plan is part of his broader policy of returning to local government more responsibility.

"The issue is changing the state's role, which to this point, has been financing local economic

empowerment," Palmer said. "Clearly, one of those aspects is removing the CRAs and another is eliminating the enterprise zones tax credit."

Palmer questioned how many jobs have been created through redevelopment, saying the state Legislative Analyst's Office has disputed many of the assertions of local officials.

"Their studies suggest it is not substantiated," Palmer said.

The Los Angeles City Council last week, with the support of Mayor Antonio Villaraigosa, took the first step to encumber more than $930 million worth of existing projects as a way to prevent the state from getting the money.

Villaraigosa, who has opposed the governor's plan from the start along with mayors of all the major cities in California, has been lobbying legislators to get them to soften the position on redevelopment agencies.

"There are a number of proposals floating around in Sacramento and the mayor wants to see what develops," spokeswoman Sarah Hamilton said. "What he is trying to stress (is) that, in Los Angeles, the CRA has rebuilt blighted areas. Just look at Pacoima with the Home Depot and Walmart.

"The mayor believes we cannot abandon these areas where there are real economic problems.

Councilman Herb Wesson, a former Assembly speaker, has taken the lead for the city in dealing with the issue and admits he is confused by what is occurring in Sacramento.

"I have never seen a thing like this," Wesson said. "And, I have been involved in some serious issues in the past. No one seems to know what is going on or how it will come out."

The legislation that has been proposed would eliminate the seven member CRA/LA board now appointed by the mayor and confirmed by the City Council.

In its place a new agency would be formed that would effectively give seven seats to Los Angeles County and one to the city.

CRA/LA Executive Director Christine Essel said the agency is trying to preserve as many options for the city as possible.

"Unfortunately, we're dealing with a lot of unknowns and the likelihood the Legislature will approve at least some budget cuts."

Essel said the city wants to create a successor agency that will preserve the projects under way as well as the 206 workers employed by CRA/LA.

"The current bill language creates more problems than it solves," she said. "It dissolved CRAs overnight with fire sales for billions of dollars in assets, it makes no provision for employees and it gives spending control to oversight boards with no accountability."

One of the criticisms of redevelopment projects is the amount of time it takes to get the new, higher property values back on the books. �

The first major redevelopment projects were created under former Mayor Tom Bradley in the mid-1970s. It is only this past year that its properties came on the tax roll.

The Bunker Hill project is even older. It was created in 1969 and is scheduled to come back on the full tax rolls in January 2012.

Officials say the length of time is needed in order to pay off the bonds of the agencies.

Redevelopment agencies are funded by deferring new tax revenue into the project area to pay off bonds and finance other programs, such as affordable housing.

David Abel, publisher of the Planning Report which follows issues such as redevelopment, said the problem belongs squarely with the state.

"It is an outgrowth of the state's failure to fix its state/local fiscal unbalance of authority after the passage three decades ago of Prop. 13," Abel said.

"This year we have the state trying to eliminate the last remaining and significant local revenue source."

Abel said he believes the dispute will continue until some form of compromise is reached where the city give some money back to the state from CRAs.

Jules Asner Paz Vega Brittny Gastineau Drea de Matteo Emmanuelle Chriqui