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Panel Urges State to Save Redevelopment, Kill 'Blight'

May 20, 2011

Plenty of people who live and work in West Los Angeles have zero firsthand knowledge of redevelopment. So a hotel in Brentwood probably doesn't provide the most appropriate venue for a discussion thereof. Nevertheless, the Westside Urban Forum gave it a good shot this morning and the results were telling. 

With any issue as controversial as redevelopment, you'd expect a panel with four members to represent a balance between pro and con. In these times, the pro-redevelopment argument would contend that the current doing peachy, thank you very much. If it wasn't, why would nearly 400 agencies been allowed to proliferate across the state and control billions of dollars in public funds? The opposition would say that it's all a bit, corrupt waste of money. 

Among the four panelists -- State Controller John Chiang; L.A. County Supervisor Zev Yaroslavsky; Bill A. Witte, president of Related California; and Michael Dieden, one of the founders of the California Infill Builders Association -- not a single one spoke in favor of the status quo. 

I don't fault the organizers for assembling an imbalanced panel. I just don't know if anyone, anywhere thinks the current system -- the one that Gov. Jerry Brown thinks is beyond salvation -- is any good. When the status quo has no friends, you know something is terribly, terribly wrong. 

If recommendations were bricks, you could build a football stadium out of the ideas that have been advanced for the reform of redevelopment. A few interesting ones popped up this morning. 

Yaroslavky, who may be run for mayor of Los Angeles in 2013, took the hardest line against redevelopment, calling it "welfare for the rich." He said he has looked for blight in cities like Arcadia and Industry -- both of which have RDAs -- and has yet to find it. Regarding projects like L.A.'s Bunker Hill, which now features gleaming Class A office buildings, he asked, "How long do you keep pouring money in?"

Yaroslavsky bemoaned the evolution of redevelopment from a blight-fighting tool to a development tool. He noted that some cities in L.A. county have no blight and that some have even proposed legislation in Sacramento to do away with the requirement to find blight, because, he said, it only invites cities and developers to make bogus findings. Yaroslavky's opposition is predictable, of course: the tension between cities and counties over diverted tax increments is as old as redevelopment itself. 

Chiang hesitated to pass judgment on the concept of redevelopment but instead said that agencies have failed to prove their own worth. According to a survey of 18 agencies that he oversaw in March, not one of the 18 agencies had filed proper paperwork to disclose all of their activities and finances. Chiang thus issued a plea for agencies to be more transparent and, indeed, more competent. 

Witte, like Yaroslavsky, said that the blight requirement is a sham, "because blight is whatever you want it to be." Witte recommended that RDAs become more like other city agencies: a core function but without the legal charade associated with findings of blight. Witte recommended that redevelopment be recast to cover three situations: 1) economically distressed areas that currently produce no tax revenue; 2) areas with such poor infrastructure or contamination that private-sector developers cannot make viable; 3) production of affordable housing. 

Dieden referred to a forthcoming white paper to be published by the California Infill Builders Association that describes comprehensive reform measures that would provide the state with $1 billion in the first year and $500 million in the following years. He also favored replacing designations of blight with those of "challenged" and providing agencies with the legal framework for addressing "challenged" parcels. 

Tellingly, one of the most prominent reform measures that is getting attention in Sacramento seemed like a non-starter. The California Redevelopment Association has proposed that agencies voluntarily turn over a portion of their TIF, so as not to run afoul of Prop. 22. And yet Yaroslavsky cautioned that such a move would be penny-wise and pound-foolish: "A voluntary $1 billion will be the victory and reform will be the causality."

The panelists presented ideas with the sort of sobriety and thoughtfulness you would expect from thinking people who are aghast at a public policy disaster. It's quite a different tone than that which persisted seven months ago, when advocates of redevelopment were talking tough and pushing Prop. 22, which promised to preserve the sanctity of TIF financing for all eternity. Of course, Prop. 22 has backfired. By thwarting the state's ability to appropriate any TIF monies, it forced the governor to propose the elimination of the entire system. Had supporters of redevelopment been talking seriously about reform last year -- or even longer ago -- the current crisis might never had befallen them. 

It's worth noting that, to my knowledge, this morning marks the first time that there has ever been an event on the Westside dedicated to a broad discussion of redevelopment. And you wonder how we got into this mess in the first place? 

--Josh Stephens

Correction Appended: An earlier version of this post erroneously identified Bill Witte as an executive with Caruso Affiliated.  William B. Witte is with Caruso; William A. Witte, who was on the WUF panel, is president of Related California. CP&DR regrets this error. 

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