When you are hog butcher for the world, you become Chicago. When you make bacon and sausages for Southern California, you face a rather different fate.  Assembly Speaker John Perez introduced last month AB 46, a bill that would take the singular action of forcing the disincorporation of a city that many consider noxious in more ways than one: the Los Angeles County city of Vernon.  For over 100 years Vernon has operated more as an industrial park than a traditional city, and city leaders have vowed to fight -- and even sue -- to maintain cityhood and its distinctive business environment.  Vernon's 1,800 or so businesses employ over 50,000 workers in factories, warehouses, food processing plants, and, perhaps most pungently, a Farmer John meat packing plant. Amid this industrial landscape live scarcely more than 90 citizens, who live in a handful of apartments, mostly owned by the city, among the railroad tracks and factories. They comprise Vernon's entire electorate, and as the landlord the city can determine who they are.  "It's nothing we would recognize as a city government, providing basic services to thousands of people," said Raphael Sonenshein, a scholar of Los Angeles-area policy and chair of the Cal State Fullerton Department of Political Science. "Basically it's kind of a holding company for the local businesses."   The 5-square mile city has faced vicious criticism over the decades, and especially over the past few years, for operating more as a fiefdom for a small number of public officials than as anything resembling a democratic entity. Charges of corruption, nepotism, election-tampering, and other forms of malfeasance have abounded, and city officials are currently facing indictment. In introducing AB 46 Speaker Perez has indicated that the city is inherently beyond reform.    "In any other city in California, this situation would be met with outrage by voters," said Shannon Murphy, spokesperson for Speaker Perez. "But Vernon is unlike any other city. Every resident lives in city-owned housing, so you don't really have an independent electorate."  AB 46 would force the disincorporation of "all cities with a population of less than 150 residents," according to the text of the bill. The text goes on to acknowledge that the legislation would affect only the City of Vernon. If AB 46 passes, the city will be absorbed as an unincorporated area of Los Angeles County. The bill provides that the county board of supervisors may keep the city incorporated if they so choose.  AB 46 has received support from over 90 co-sponsors in the Legislature and a raft of civic entities, including the city councils of neighboring cities and the Los Angeles County Board of Supervisors. The Los Angeles City Council voted 12-0 to support the bill. Several unions and business groups associated with Vernon oppose the bill.  Murphy maintained that AB 46 had precedent in the past disincorporation of at least two California cities since the creation of the Local Agency Formation Commission system of incorporation in the 1960s. However, this would be the first time that the Legislature has forcibly disincorporated a city that could be considered a going concern. In the 1972 residents of the City of Cabazon approved their own disincorporation, and in 1973 Hornitos was disbanded by statute mainly because the Mariposa County hamlet had turned into a ghost town.  "The Vernon bill is entirely separate from that and completely different because it's imposing a forcible dissolution...presumably against the will of the city leaders and some business owners in the city of Vernon," said Paul A. Novak, executive officer of the Los Angeles County LAFCO.  Thus, this would be the boldest such move in recent memory, and the first disincorporation of any kind since the 2000 update of the Cortese-Knox-Hertzberg Act, which governs incorporation of cities and special districts throughout the state.  Vernon city leaders deny that such extreme measures are warranted.  Fred MacFarlane, public information officer for the City of Vernon, said that city leaders are pursuing a variety of reform measures. They include the establishment of an independent housing authority and other measures to ensure that Vernon government is sufficiently transparent. Former state Attorney General John Van de Kamp is leading a study of ethics reforms that can be implemented if the city remains intact.  A recent report commissioned by the city contends that Vernon businesses pay out over $4.5 billion in annual wages and hundreds of millions in state and local tax revenue. The report suggests that--because of anticipated changes that county supervisors would impose--the passage of AB 46 would result in the loss of over 11,000 of those jobs and $420 million in wages.  "The businesses in Vernon look to the city to provide a structure to enable them to be competitive and profitable," said MacFarlane. MacFarlane pointed to the city's Class I fire department, which, he said, provides a level of service rivaled by only a few dozen other departments across the country.  He said that Vernon businesses enjoy lower insurance rates because of the safety that the fire department provides. Similarly, Vernon's city-owned utility provides energy at a lower rate than do utilities in surrounding areas. If these, and other, industry-friendly amenities were to disappear, MacFarlane said that businesses would be harmed.   Others say that Vernon's business climate does not justify what they consider to be an undemocratic political structure. "We have many businesses in the County of Los Angeles and they can carry out their businesses and so on and still do it under a democratic government," said County Supervisor Gloria Molina, whose district encompasses Vernon.  Vernon city leaders, in conjunction with many Vernon-based businesses, are not relying only on economic arguments to combat AB 46.  MacFarlane said that city leaders consider AB 46 illegal because Vernon is a charter city and therefore entitled to self-rule under the state constitution.  "There is no provision in the state constitution that provides the state of California with the authority or the power to disincorporate a charter city," said MacFarlane. "That's not an implied power. Charter cities can be disincorporated, but they are disincorporated by a vote of the electors of the incorporated city." He added that the primary motivation for disincorporation is to treat Vernon "like an ATM" and transfer city revenues to county coffers.  Bill Chiat, executive director of the California Association of Local Agency Formation Commissions, said, however, that the law does not either expressly provide for, or forbid, the disincorporation of a charter city. "The provisions in LAFCO law (Cortese-Knox-Hertzberg) for disincorporation do not differentiate between general law or charter city," said Chait. "However, LAFCO provisions do not provide for a forced disincorporation as called for in AB 46."  "Our local government policy experts and attorneys who deal with the constitutionality of bills on a daily basis are convinced state and federal precedent supports our position," said Murphy, speaking on behalf of Perez. "The fact is they are desperate to keep their corrupt status quo." What will happen if and when AB 46 forces a change of status quo remains somewhat unclear. Most immediately, the city would come under county control 60 days after the passage of the bill. Thereafter, it could remain as a part of unincorporated county, or it could be annexed by any of the four cities that adjoin it.  "One could logically anticipate that one of the adjoining cities might then come in and apply to annex that area," said Novak. Novak added, however, that the annexation process would likely involve lengthy studies and a host of bureaucratic hurdles. The most imposing of those hurdles is that a vote of more than 25 percent of residents and/or landowners can block an annexation.   That issue may, however, never arise if neither Maywood, nor Commerce, nor Los Angeles decide that they want to absorb a greasy place with a tarnished past. In fact, although the Los Angeles City Council issued strong support for AB 46, it looks unlikely that the city would make a play for Vernon any time in the foreseeable future.  "I really feel that Los Angeles has its hands full keeping its own house in order," said Los Angeles City Council Member Jan Perry, whose council district is one of three that border Vernon. "At this point I'm not even willing to consider the exploration of annexation."   "The initial talk of LA trying to get an annexation seems to have gone away, which probably is wise," said Sonenshein. "My guess is that it would pollute the discussion in ways that might be unproductive." Though Vernon businesses fear that the county would strip them of amenities and their favorable business environment, supporters of disincorporation insist that little would change in the city.  "Our bill is going to address some of the issues in terms of permitting, in terms of grandfathering in these businesses so they can continue to operate efficiently," said Murphy.  Molina, the county supervisor, said that the county does not intend to dismantle the city's business environment. She said that the utility would likely continue to operate and that other policies would change little.  "There are a lot of things that would probably stay in place for a long time," said Molina. "It shouldn't create any disruptions of services or any things of that sort. It wouldn't have any kind of civic government per se, but they could address their issues to the county."  Vernon's unique nature and history might even warrant innovations in governance that would satisfy businesses there without requiring that the city operate as a full independent entity.  "At some point the county might consider treating Vernon as some kind of enterprise zone, governed indirectly by the county through some commission that doesn't even pretend to be a local government," said Sonenshein.  Contacts:  Bill Chiat, Executive Director, Calfornia Association of LAFCos, http://www.calafco.org/ (916) 442-6536 Fred MacFarlane, Public Information Officer, City of Vernon, (323) 583-8811 Gloria Molina, Los Angeles County Supervisor, (213) 974-4111 Paul A. Novak, Executive Officer, Los Angeles County LAFCO, (818) 254-2454 Jan Perry, Los Angeles City Councilmember, (213) 473-7009 Raphael Sonenshein, Chair, Cal State Fullerton Political Science Department, (657) 278-3837

As the clock ticks down to an imminent -- but as yet unscheduled -- vote on Gov. Jerry Brown's budget proposal, localities and their respective redevelopment agencies have been taking frantic evasive measures to try to shield funds and properties from liquidation and transfer to the state.  The language of the budget bill would not only eliminate redevelopment agencies but also liquidate all assets that are not yet under contract to be developed. This means that land holdings and infrastructure projects that are planned but do not have private partners may be fair game. In the past few weeks, and especially in the past few days, redevelopment agencies have entered into new contracts, transferred title of properties to their respective cities, and even hustled brand-new bond issues out the door. In particular, the issuance of new debt creates ironclad obligations that the state would not, presumably, be able to nullify.  Though the bill language implies that the state may try to nullify some of these transactions—and could do so for transactions dating back as far as three years—cities are nonetheless trying to shield as much as possible.   It is an unfortunate but necessary strategy, say supporters of redevelopment who do not want the state to force a "fire sale" of, in many cases, cherished civic assets.  "I think it is eminently prudent in the face of the invasion that the governor's legislation is mounting against every community in this state, trying to commandeer and control the assets of the RDAs in the state," said Chris McKenzie, executive director of the League of California Cities. "It's unthinkable that they would not prepare."  On the other hand, this unprecedented situation has created uncertainty for both developers and public agencies across the state, with the potential for rash decisions. "It's hard because of the manipulations in Sacramento are hard to understand and coming pretty fast-and-furious," said Larry Kosmont, president and CEO of Kosmont Companies, a real estate advisory firm with a long history of working with redevelopment agencies.   If cities fail to prepare, or if the state government can nullify shielding agreements, many fear that the state's real estate market will be flooded with a motley assortment of un-developable and orphaned land parcels--as well as a few plum deals--that may be sold for pennies on the dollar.  "I think the liquidation clause is the most incredibly stupid idea that you could put into legislation," said McKenzie. "The governor just said he didn't want to dump a bunch of state property on the market and get below-market prices. This bill forces a lot of government-owned property to get below-market prices. It's going to waste dramatic amounts of public funds." Although official statewide figures are difficult to ascertain, the value of shielding transactions is likely well into the billions, if not tens of billions, of dollars.  The City of Los Angeles alone has approved $1 billion in new contracts and transfers. The City of San Diego and its three redevelopment agencies has entered in a whopping $4 billion worth of cooperation agreements, according to Derek Danziger, spokesperson for the Center City Redevelopment Corp. The City of Santa Ana took control of $210 million in assets from its redevelopment agency. And the list could go on.  On a smaller, but perhaps more aggressive, scale, National City is one of many cities whose redevelopment agencies have issued and obligated bonds. National City Redevelopment Director Patricia Beard said that her city's issuance of $39 million in bonds was likely the first in San Diego County. Those are a small fraction of the $700 million in bonds that redevelopment agencies have issued since the first of the year, according to State Treasurer Bill Lockyer. That compares against $1.2 billion in bonds for all of last year.  Larry Westerlund, chair of the Fresno Redevelopment Agency, said that he proposed the approval of a wide range of projects, some of which were only in early planning stages. The city council, acting as the RDA board, ended up approving around $20 million worth of projects that were reasonably far along in the planning process.  "We have tried to expedite projects that were in the pipeline to get those MOUs, OPAs, DDAs out the door," said Westerlund. The City of Oxnard has taken title to 53 properties worth around $60 million, according to Community Development Director Curtis Cannon. The city has also transferred a cache of contracts and cash worth, he said, around another $60 million. Thus, cities like Oxnard are rapidly becoming the caretakers of land considered crucial to their future development.  "All of us at the local level have much more at stake, I believe, than does the state," siad Cannon.  "That doesn't discount the state's own problems.  But we at the local jurisdictions cannot physically sit down and let this happen." For many cities, these assets represent years of work and planning, and they are considered crucial components of cities' development plans.  "We have goals and objectives that we have been working towards. So when we purchase property or assets we have them for a purpose," said Sidnie Olson, community development director of the City of Eureka. "To have someone liquidate it and just divvy it up, that doesn't help our community."   Olson said that redevelopment is crucial for small cities that have few revenue sources. Even in behemoth San Diego, Danziger said that the properties owned by the Center City Corp. are complements to a planned increase in the residential population of downtown San Diego from a current 35,000 to 90,000.  "There are people who won't have backyards, so parks will be essential to their future," said Danziger. "If we suddenly lose the properties that we being earmarked for those developments, it creates a very tenuous situation for us."  Cities are even trying to shield high-profile megaprojects, such as sites for proposed professional sports stadiums in Oakland, San Jose, and Santa Clara. Danziger said that San Diego has not explicitly earmarked land for a rumored football stadium. However, a potential downtown brownfield site is among the parcels that the Centre City Corp. has tried to shield, along with funds to clean up the property.  "We've set about $150 million on the list for environmental remediation for the site on which the stadium could potentially go," said Danziger. "That's irrespective of whether you build a stadium, housing, a park or anything…you need to remediate on that site." While not all of the state's brownfields are expected to go to such illustrious uses, the mere chance to remediate hundreds, or even thousands, of currently marginal sites throughout the state is looking precarious under the governor's proposal. Many such sites have no apparent purpose other than to serve redevelopment plans and would be laughable if put up for sale on the open market.   "With the loss of redevelopment we will also lose some exceedingly important brownfield tools," said Stephanie Shakofsky, executive director of the Center for Creative Land Recycling, which promotes the reuse of brownfields and other inner city parcels. "These are laws that allow a redevelopment agency to clean up, or require a property owner to clean up, a contaminated property while providing essential liability relief."  Whether redevelopment agencies' parcels are marginal or not, the rush to liquidate them in order to plug the state's budget hole makes little business sense, according to some analysts--especially given the state's already depressed real estate market.  "It's a bit like leasing out your house to buy a boat," said Kosmont.  As well, they may be properties that a private developer cannot, or would not, want to do much of anything with.   "In general these properties would be the cats and dogs of a private portfolio...they need help," said Kosmont. "They would have a pre-development value with a low valuation because a lot of things would have to happen for those properties to achieve their highest and best use." With a redevelopment agency, said Kosmont, those properties could be utilized. But without the help of, for instance, infrastructure improvements and a wider community plan, they would likely languish.  As cities try to shield assets in order to avoid these kinds of devaluations, the state stands to net far less than the $1.7 billion anticipated in the governor's budget draft because so many assets will be taken off the books. And those that are left will be worth little.  "Given the rush to go to the altar to terminate redevelopment, and given the defensive measures that are going on now--whether or not they can be pierced legally or not--at the end of the day, you're you're probably looking at no more than $200 or $400 million that could be allocated," said Kosmont.  Contacts:  Larry Kosmont, CEO, The Kosmont Companies , 213.417.3300 Chris McKene, Executive Director, League of California Cities , (916) 658-8200 Stephanie Shakofsky, Center for Creative Land Recycling , , 415.398.1080

If Gov. Jerry Brown gets his way in the Legislature in the coming days, he and the state will face a conundrum to make a Zen master's head spin: Is it illegal to transfer funds from agencies that no longer exist? The governor has thus far been unyielding in his effort to eliminate the state's redevelopment agencies. In doing so he hopes to recoup up to $1.7 billion to help offset the state's estimated $26 billion deficit. Negotiations are ongoing at the Capitol, with a handful of Republican legislators--the so-called "GOP 5"�still in discussions with the Democratic governor. A vote is expected any day now.  If approved, the governor's budget package would include a June vote on tax extensions; the logistics of that election require the Legislature to vote as soon as possible.    Meanwhile, a monumental coalition of local officials--representing essentially every locality in the state--led by the California Redevelopment Association and the League of California Cities--has led a vehement lobbying effort to dissuade the governor and legislators from dismantling a system that they say is crucial to the health of local economies and land use planning. If that effort fails, they have made it clear that they will sue to prevent the enactment of the governor's plan.  "The level of opposition to this proposal�is so strong that we will be following through with legal action," said Chris McKenzie, executive director of the League of California Cities. "Which, I hasten to add, we would prefer not to do."  The peculiarities of the California legislative process, however, may necessitate just that.  "It's a crappy system, this war of all against all," said Max Neiman, a senior research fellow at UC Berkeley's Institute of Governmental Studies. "But if that's what the game is, you have no choice but to arm yourself as best you can and duke it out."  The governor's office contends that such a battle would do little to help the state's dire financial situation.  "The bigger point is that legal obstruction and obfuscation won't ultimately get us any closer to addressing California's budget deficit," said Evan Westrup, spokesperson for the governor's office.   CRA and League of Cities officials say that they are on solid legal ground, most notably because of Proposition 22: The Local Taxpayer, Public Safety, and Transportation Protection Act. Prop. 22 passed this November, with 60.7% of the vote. Promoted in response to the state-mandated transfer of over $2 billion in redevelopment funds in fiscal years 2010 and 2011, Prop. 22 prohibits the state from transferring certain local funds, including those dedicated to redevelopment. Advocates of redevelopment say that, contrary to the governor's position, Prop. 22 implicitly forbids the sort of dissolution that the governor is seeking.  Brown's office, however, maintains that Prop. 22 does not infringe on the Legislature's right to create and disband redevelopment agencies as it sees fit, per Article XVI, Section 16 of the State Constitution. That legislation, originally passed in 1954, establishes redevelopment agencies as creations of the state.  "Prop 22 limits the Legislature's authority to redirect from redevelopment agencies certain funds. But it doesn't speak about whether or not the Legislature has the authority to end redevelopment," said Marianne O'Malley, director of General Government at the nonpartisan Legislative Analyst's Office. The League of Cities acknowledges that the Legislature retains ultimate authority over redevelopment. However, McKenzie, insists that neither Art. XVI, Sec. 16 nor any other aspects of the state constitution allows a comprehensive, nearly instantaneous dismantling of the system.  "They authorized the creation of RDAs, they authorized them to incur obligations. These obligations are substantial; they are tied to the existence of RDAs," said McKenzie. "Eventually if they said they didn't want any more agencies, any more project areas, that's within their discretion. "They cannot do it overnight in this chaotic, pell-mell way that the governor's proposal envisions." McKenzie acknowledged that Prop. 22 does not prevent the legislature from enacting traditional reforms such as altering the lifespan of redevelopment project areas or redefine the legal definition of blight. But he maintains that the governor's proposal amounts to a blatant violation of Prop. 22 and, he said, of the voters' intention of securing more funds for local governments.  The apparent conflict between Prop. 22 -- a constitutional amendment -- and those parts of the constitution that were previously enacted has no clear endgame in California constitutional law. Mary Beth Moylan, a law professor at University of the Pacific's McGeorge School of Law, said that, essentially, there are conflicting precedents that make the outcome of a lawsuit nearly impossible to predict.  Moylan said that, on the one hand, the more specific statute takes precedence. This principle would favor previous provisions of the constitution. However, she also said that, when constitutional amendments are in conflict, the more recently enacted one takes precedence.  "Under the �more recent takes prevalence' rule, Prop. 22 is the last statement of constitutional law and so one would think it takes precedence," said Moylan. "Under �specific-versus-general,' it's hard to say." Moylan noted, however, that if the supporters of redevelopment such as CRA and the League (who also were behind the drafting of Prop. 22) had intended to outlaw the dissolution of redevelopment, they could have explicitly included such language in the proposition.  "My guess would be that a court if faced with this would try to say, 'Well, the initiative didn't amend Article XVI, so the state still has the power," said Moylan. "If it had wanted to shore up or change or alter the power balance between the state and the local governments in this particular way, it would have changed Article XVI."  McKenzie said that such a possibility was never discussed. Instead, he said that Prop. 22's prohibition on "indirectly" shifting funds implicitly forbids the wholesale elimination of redevelopment.  "It could not be clearer because it says it cannot �directly or indirectly' shift these funds to the state or to the local agencies as long as they're needed for redevelopment under Article XVI," said McKenzie. "That was (included) to expressly capture any kind of ruse like this."  The League's legal strategy also centers on Article XII of the state constitution, which holds that ad valorem real property taxes are to be distributed to districts within the countries from which the taxes are collected. The governor's proposal would, the League contends, distribute some funds to statewide programs such as Medi-Cal and trial courts.  This debate over the provisions of Prop. 22 amounts to another chapter in the state's tortured history of legislating by ballot initiative. The most recent, high-profile such conflict surrounded Prop. 8, the voter-approved ban on same-sex marriage which was later ruled unconstitutional in a U.S. District Court.   "Like most voter initiatives, they have these unintended consequences," said Moylan.  "The problem with making state constitutional law by initiative is that it doesn't look holistically at the constitution."   Contacts:  Chris McKenzie, Executive Director, League of California Cities, (916) 658-8200 Marianne O'Malley, Director, General Government, (916) 319-831 Mary-Beth Moylan, Lecturer, University of the Pacific McGeorge School of Law, (916) 739-7223 Max Neiman, Fellow, UC Berkeley Institute for Governmental Studies, (510) 643-6846 Evan Westrup, Spokesperson, Gov. Jerry Brown, (916) 445-4571

As of Wednesday afternoon, March 9, here are the following results from local elections related to land use in California:  Beverly Hills  Measure 2P - Approved;  Measure 3P - Rejected 2P Two Hours of Free Parking Initiative; approved, 3,168-1,963  3P Three Hours of Free Parking for Residents of Beverly Hills, Measure 3P; rejected, 1,436-3,539 Measure 2P, promoted by businesses in downtown Beverly Hills, appears headed for victory. It ensures two hours of free parking at several city-owned parking structures. Measure 3P, put on the ballot by the Beverly Hills City Council, appears headed for defeat. It had included the unusual provision of offering a certain amount of free downtown parking only to Beverly Hills residents.  Jurupa Valley (Riverside Co.) Measure A - Approved Jurupa Valley Incorporation Election; approved 3,193 - 2,715 This vote means that Jurupa Valley will become Riverside County's 28th city. The vote ends 19 years of efforts to achieve cityhood for what has been a loose association of communities in the fast-growing county. The city of roughly 90,000 residents will incorporate July 1, 2011.  San Clemente Measure A - Rejected Vote on the Playa Del Norte Development at North Beach Rejected  6,922 - 9,424  This measure asked voters to affirm the City Council's decision to approve a mixed use development for a seaside parking lot. Opponents bemoaned the project's potential infringement on beach access.  West Hollywood Measure WH-A -- Rejected Tax Billboard Act Rejected, 983 - 3,865 Promoted as a way for the city to generate millions of dollars in revenue by allowing and taxing "supergraphic" billboards on the Sunset Strip and Beverly Boulevards, this measure was criticized as a "Trojan Horse" that would allow visual blight. --Josh Stephens

The debate over the fate of redevelopment has called into question the usefulness of redevelopment in places such as, say, Coronado or Palm Desert. But there is no doubt that blight still infects large swaths of the state's major cities -- and that those cities are deeply concerned about the fate of their redevelopment agencies.  In response to the release of a draft bill that would make the elimination of redevelopment official, the mayors of the state's nine largest cities today sent a stern letter  <.pdf> to Gov. Jerry Brown asking him once again to reconsider his intention to eliminate their redevelopment agencies -- along with nearly 400 others across the state.  This is not the first time that Brown, once mayor of Oakland, has heard from his former counterparts. Mayors met with him in Sacramento several weeks ago, before the bill language was released. But apparently their pleas have run headlong into the overwhelming fact that looms over Brown's governorship: a $26 billion budget deficit.  While Brown sees the dissolution of redevelopment as a way to liberate $1.7 billion, the mayors argue that the loss of redevelopment will have "disastrous impacts on cities, counties and the entire state economy." The mayors' letter focuses mainly on perceived administrative and logistical flaws in the governor's plan.  The mayors cite the following dangers of eliminating tax-increment financing and the 6-decade-old bureaucratic structure that administers those funds:  "Successor agencies" that would assume RDA debt are ill-defined and could lack proper oversight, thus squandering funds dedicated to paying off existing debt obligations.  Proposed oversight boards would not be sufficiently transparent or accountable to city governments.  The immediate elimination of redevelopment agencies would amount to a hasty, poorly planned shakeup of local government: "This legislation effectively begins the realignment conversation in a piecemeal, tactical fashion with no strategic understanding of balance or sustainability." The legislation would prompt a "fire sale" of assets and put countless redevelopment deals in jeopardy, as private partners would be prompted to pull out. Likewise, agency employees with longstanding knowledge of existing and proposed deals would be let go. This would, say the mayors, damage the entire state real estate market.  Finally, the mayors reiterated their substative objections to the governor's plan: that it would decimate needy communities, stunt the production of affordable housing, and make California an even chillier business climate.  The letter was signed by the mayors of Anaheim, Fresno, Long Beach, Los Angeles, Oakland, Sacramento, San Diego, San Jose, and Santa Ana.   For complete coverage of Gov. Jerry Brown's proposal to eliminate redevelopment, please visit CP&DR's  Redevelopment Elimination Resources Page . --Josh Stephens

As expected, supporters of redevelopment in California wasted no time responding to a scathing report released today by State Controller John Chiang. This afternoon California Redevelopment Association re-iterated its longstanding contention that redevelopment creates jobs, stokes local economies, and provides a net economic benefit to the state despite what Gov. Jerry Brown claims is a $1.7 billion annual drain on state coffers.  Chiang's report claims, among other things, that of 18 redevelopment agencies surveyed, almost none of them had done a credible job tracking the number of jobs that redevelopment created in their respective jurisdictions. Moreover, the report found numerous inefficiencies and sloppy business practices. Finally, it contends that agencies' definitions of blight -- which is crucial for the creation of redevelopment project areas -- vary so widely as to be meaningless.   The CRA continues to contend that redevelopment is responsible for over 300,000 jobs statewide, contrary to the controller's claim that it's essentially impossible to track or assess the jobs that individual agencies have created, much less estimate the statewide impacts. CRA Executive Director John Shirey attacked the controller's metholology in his statement released today:  "Unfortunately, rather than issuing a serious, methodologically and academically sound review of redevelopment, it appears that the Controller has chosen to issue a politically-motivated campaign piece to support those who want to abolish redevelopment," said Shirey.  "The Controller has cherry-picked a few problems in reporting to draw broad conclusions about redevelopment that are not supported if one looks at the whole picture of redevelopment statewide." The CRA takes issue with the controller's report on the following points:  -The report focuses on only 18 agencies, out of nearly 400 statewide. -The report was conducted with undue haste: only five weeks to assess a multibillion-dollar, statewide program.  -The 18 agencies include five that did not make their SERAF payments last year, indicating that the report focused unduly on agencies that were struggling financially.  -Those agencies that missed SERAF payments did so legally and are not necessarily mismanaged or ineffectual but rather were unprepared for the state funding transfer.  -Only 8 percent of agencies statewide missed their SERAF payment whereas 28 percent of the report's focus agencies did.  Shirey's statement makes no mention of the controller's claims about the definition of blight, nor does it address claims of mismanagement. Throughout the budget debate, the CRA has maintained that some agencies do need to be reformed -- but not eliminated.  "The California Redevelopment Association and our member agencies are committed to working with the Controller and the Legislature on any reforms needed to improve redevelopment outcomes or the process of reporting," said Shirey.  For more insight into Gov. Jerry Brown's proposal to eliminate redevelopment, please visit CP&DR's Redevelopment Elimination Resources Page . --Josh Stephens

Throughout the now eight-week battle over the fate of redevelopment, both sides have issued claims about the efficacy -- or lack thereof -- of redevelopment but have relied on scant data to do so. Today the empirical analysis of redevelopment has, according to the office of State Controller John Chiang, become quite a bit clearer.  Five weeks ago Chiang initiated a limited-scope review of redevelopment and today released findings that are highly critical of redevelopment. Among other criticisms, the findings directly contradict claims that redevelopment is responsible for the creation of hundreds of thousands of jobs -- because, according to the report, agencies have done little, or nothing, to track job creation.  Based on a review of 18 agencies statewide, the controller found no reliable means to measure the impact of redevelopment activity on job growth because RDAs either do not track them or their methodologies lack uniformity and are often arbitrary such that "virtually any condition could be construed to be blight." The review also found that agencies interpret "blight" loosely enough that their standards lack uniformity and therefore cannot be compared to each other. The report noted that in some cities, golf courses and luxury homes are located in redevelopment project areas.  The report suggests that these discrepancies make it difficult for the state to hold RDA's accountable for the funds they receive and spend. It found other troubling oversights, such as missed payments to school districts and sloppy bookkeeping, including auditing violations.  The 40-page report  (.pdf) has been submitted to Gov. Jerry Brown as well as leaders in the Senate and Assembly.  "For a government activity which consumes more than $5.5 billion of public resources annually, we should be troubled that there are no objective performance measures demonstrating that taxpayer's are receiving optimal return for each invested dollar," said Chiang in a statement. "Locally-controlled economic development is vital to California's long-term prosperity. However, the existing approach – born in the 1940's – is not how anyone concerned with performance, efficiency, and accountability would draw it up today."  The 18 selected agencies represent 16 percent of all redevelopment dollars in fiscal year 2009-10.  Auditors from the Controller's office conducted the review by interviewing redevelopment staff and analyzing financial statements, reports, plans, budget documents, ledgers, job creation data, and payroll records. The report is a potentially damning rebuttal to the claim, circulated by the California Redevelopment Association and repeated by many supporters and local agencies, that redevelopment contributes to over 300,000 jobs in California. According to the report, only 10 of the 18 agencies studied even attempted to track job creation, and of those 10, some methodologies were inconsistent and opaque.  "The lack of accountability and transparency is a breeding ground for waste, abuse, and impropriety," said Chiang in a statement.  "In whatever form local redevelopment takes in the future, the level of oversight and openness must be consistent with the amount of public dollars entrusted to their care."  The report does note, however, that all 18 agencies contributed appropriate funds to their low- and moderate-income housing funds. Redevelopment agencies have come under fire recently for neglecting to make these payments, which are required by law.  Editor's Note: CP&DR will convey the response of the CRA and others when available.  --Josh Stephens

With apologies to Sir Isaac Newton, we may finally find out what happens when an irresistible force runs headlong into an immovable object.  In this case, the irresistible force is Gov. Jerry Brown while the immovable object is redevelopment and the 400-odd localities that are trying to save their agencies and the thousands of planned projects under their purview. The latest example of the remarkable symmetry (read: stalemate) between the two sides is a curiously sanguine  poll released today by Probolsky Research -- presumably on behalf of the California Redevelopment Association and other redevelopment supporters -- contending that 59% of Californians think that redevelopment is "a good idea."   The poll included a follow-up question to the naysayers, asking them if they thought redevelopment funds were "put to good use." When presented with types of activities that RDAs do, such as promote affordable housing or repurpose military bases -- many respondents changed their minds, deciding that redevelopment is a "good idea." Sixty-three percent of respondents said that redevelopment agencies should continue operating.  Finally, 64% responded in the negative to what was clearly the survey's most leading question: "it is estimated that 300,000 Californian jobs will disappear....does knowing this make you more or less likely to eliminate local redevelopment agencies?"   First, it should be noted that the 300,00 figure that the CRA and others have been citing is not without its critics . Second, while the elimination of redevelopment under Brown's plan would halt future redevelopment projects, I have yet to see any credible suggestions that the jobs already created by redevelopment -- however many there may be -- will "disappear." Businesses in redevelopment areas do not get tax benefits or any other incentives. They simply exist. And, with or without an active redevelopment agency, they are scarcely more likely to "disappear" than are the buildings that house them.  Now, all of these numbers don't exist in a vacuum. And, as has become customary since Jan. 10, there are some powerful numbers to contradict Problosky's findings. In January, the Public Policy Institute released its own poll contending, well, the exact opposite. The PPIC found that 66% of adults and 63% of likely voters do support the governor's plan to redirect local revenues, including those that will come from the elimination of redevelopment. So that's a pretty big swing: from over 60% in favor of elimination to over 60% opposed to it. Granted, the CRA has been doing a massive public relations campaign, so it's likely that any poll taken today would reflect the sentiments of a more informed electorate. Even so, any PR campaign capable of not only reaching 1/3 of a population but also changing their minds would qualify as just short of a miracle. (If this was true, CRA should rent itself out to people with real public image problems, like Charlie Sheen or BP.)  But these numbers suggest that Californians are either mightily capricious, that one poll is grossly flawed -- or that no one really knows how anyone feels about redevelopment. But by now we all know what it feels like to get beaten over the head with a $24 billion deficit: it's no fun. --Josh Stephens

The following is the first of an occasional series of thoughts on "super density" and the future of cities. China plans to create a city of 42 million people (!) by linking six major cities by rail, power lines, communications and the like. When complete, the new mega-city will comprise 16,000 square miles, compared to the 900 square miles of urbanized Los Angeles County, which many people already consider an unmanageably large city. The Chinese government plans to spend the equivalent of $190 billion in the next six years to accomplish this extremely ambitious task .  Among the official purposes of this massive conurbation, surprisingly, is what could be called non-redundancy of services: People who seek specialized health care, for example, would be able to do so within a much larger network. Labor economics also seems a strong reason for the investment in this region, because employers seeking highly skilled workers for tech and high-tech industries will be able to draw from an immensely enlarged labor pool. As a student of urbanism, I find this idea both appalling and oddly exciting. Appalling, because the idea of a city of 42 million people terrifies me with visions of unrelenting high-rise construction, lack of open space and environmental wreckage. At the same time, I admire – I almost said in awe – of China's willingness and ability both to actually plan for its economic future. It's called "industrial policy," which is a familiar concept in Asia, but almost unknown in the United States. In China, industry professes to benefit from things like public transit (which get their employees to work) and high-density housing (which allows them to leave cheaply). In the US, the primary things that industry wants (and regularly wins) from government are tax breaks, subsidies and relaxed regulation. Please compare the Chinese plans for infrastructure and transit development with the hostile reception greeting the President's proposal for high-speed rail to inter-connect major US cities. (The hostility, of course, is prompted by the spectre of spending (wash your mouth out!) at a time of high federal deficits, despite the arguable benefits to business. Austerity measures have been greeted enthusiastically in Greece, Great Britain and Ireland, so we thought we'd try it here, too.)  But if superdensity and hyper-infrastructure looks good from 30,000 feet, our first reaction to the idea of a megacity naturally be: How would I feel living in such an environment? Beyond moving goods and bodies around with increasing efficiency, what will it feel like to live in a non-stop, high-density with no relief in the form of wide open spaces or accessible rural areas? Then I feel somewhat less excited. (In fairness, I need to find out what kind of open space planning and habitat conservation efforts the Chinese plan to undertake in this exercise. Recent city-building efforts in that great nation, however, do not inspire confidence that the authorities have any larger vision of urban form, let alone the good life, other than smoothing the path for real estate development.) In one sense, urban America already lives in loosely comparable conditions: The Northeast has long been a continuous carpet of inner cities and suburbs (old timers may remember the 1960s term "megapolis"). The West Coast, for that matter, could almost be described as a continuous urban fabric stretching from San Diego to Seattle. Insofar as we have open space, it is because we have inherited them from idealistic planners of a century ago or more, such as the Olmsteads and the City Beautiful movement. Is there a model for large-scale, very high density living we can imagine ourselves living in voluntarily, even happily? Personally, I think much of the answer lies with the availability of public and semi-public open space. Otherwise, we are simply warehousing people as if they were abstract economic units to be moved around with a giant croupier. Even if the Chinese are intent on building this "city" in six short years, we are at the beginning of an ongoing discussion. I would greatly appreciate hearing from readers, planners, and other journalists, etc. on the topic of superdensity. If you want to recommend essential reading, please send links.  --Morris Newman

Poor George Will. He's getting kicked all over the blogosphere for a recent Newsweek column in which he said liberals love trains because they are a way to control the masses, while conservatives love cars because they provide freedom. Here's the key paragraph from his February 27 piece : "To progressives, the best thing about railroads is that people riding them are not in automobiles, which are subversive of the deference on which progressivism depends. Automobiles go hither and yon, wherever and whenever the driver desires, without timetables. Automobiles encourage people to think they – unsupervised, untutored, and unscripted – are masters of their fates. The automobile encourages people in delusions of adequacy, which make them resistant to government by experts who know what choices people should make." Will was attempting to argue against the Obama administration's $53 billion push for high-speed rail investment. There's a legitimate debate to be had, and Will could score points because the administration has not done a good job of explaining or defending its proposal. Will's column, however, is the sort of hysteria I expect from the AM radio screamers. Will has received rebuttal and well-deserved ridicule from The Huffington Post , Yglesias , the California High-Speed Rail Blog , The New York Times ' Paul Krugman and plenty of others. A Grist columnist notes that George Will in 2001 argued for a nine-state, high-speed rail system in the Midwest. I think Will is simply reflecting the bizarre partisan divide regarding transportation funding. But if I'm going take his "argument" at face value, I first need answers to a few questions: First question: Has George Will ever driven a car in a major metropolitan area of this country? When it takes me an hour to travel eight miles on the 405, I'm not thinking about how much I enjoy the freedom of my car. Nor is freedom on my mind when I'm circling blocks endlessly in Berkeley looking for a place to park, or trying to get through the 80-680 interchange on a holiday weekend. I'd give anything for the freedom to ditch the damn car. Second question: Has George Will ever driven a car in bad weather? I realize trains can get delayed by storms, but most of the time they keep chugging. If you've ever gotten stuck on the wrong side of the Grapevine when it closed because of snow, or gripped the wheel with white knuckles when tule fog has limited visibility to 50 feet on Highway 99, you're not praising the freedom of your car. No, you're wishing you were free to take another mode of transportation. Final question (two parts): What about the approximately 45% of U.S. residents (kids, senior citizens, physically and mentally disabled people, poor folks) who don't drive? Does their freedom not matter to George Will? To that final inquiry, I'm afraid I know the answer. - Paul Shigley

What happens when you go through years of planning and actually building TODs, only to have the T suddenly vanish? This is the question on the San Francisco Peninsula and in the South Bay, where Caltrain is proposing radical service reductions and the closure of numerous stations. It's also a question that other places are likely to confront as public budgets grow more austere and the Republican Party ramps up its attacks on seemingly all transportation that doesn't involve automobiles. Caltrain is the heavy rail commuter service that runs from Gilroy to San Francisco. It carries nearly 40,000 passengers a day on weekdays. The Santa Clara Valley Transportation Authority, the San Mateo County Transit District and San Francisco jointly operate the system. However, Caltrain has no dedicated funding source, such as a local sales tax, and the three Caltrain partners have their own serious money problems. Thus, Caltrain faces a $30 million budget deficit for the 2011-12 fiscal year. To close the budget gap, the Caltrain joint powers board has proposed reducing the number of weekday trains from 86 to 48, eliminating all non peak-hour trains, eliminating all weekend and special event service, ending service between San Jose and Gilroy, and closing seven stations from South San Francisco to San Jose. The proposal is a blow to the cities and the region as a whole, which have embraced transit-oriented development (TOD) adjacent to Caltrain stations. Projects have been built in South San Francisco, Redwood City, Mountain View, San Jose and elsewhere. A wide variety of TOD projects is planned in Millbrae, San Mateo, San Carlos, Sunnyvale and other locations. Cities have created mixed-use land plans around Caltrain stations. Moreover, Caltrain is critical to the Grand Boulevard Initiative , a voluntary regional planning effort that seeks to transform the El Camino Real corridor – which includes many miles of the Caltrain line – from a mostly automobile-dominated, inefficient, commercial strip into a dense, mixed-use, transit-first corridor. The Grand Boulevard Initiative and Caltrain are not dependent on one another, observed Michael Garvey, the primary consultant to the initiative. Still, he said, "A lot of our planning is based on the assumption that the major transportation utilities would be in place." You'd think that, with regard to Caltrain, the assumption would be safe. After all, trains have carried passengers along most of the route since the late 19th century. The whole point of the Grand Boulevard Initiative is to locate many new job centers and housing units along a corridor that already has a great deal of infrastructure, including public transit in the form of buses, light rail and, yes, Caltrain. Even cities that for decades have been hostile to growth have shown a willingness to accommodate transit-oriented development along El Camino, thanks in large part to the popularity of Caltrain. All of this is exactly what SB 375 seeks to encourage. It's what the new urbanists, smart growthers, housing advocates and the alternative transit crowd have been pushing for. But if Caltrain's budget-cutting proposal goes forward, are any of these plans and good intentions viable? Elected officials and advocates are trying to find funding for Caltrain. I have to believe they will be successful, later if not sooner. Still, the episode is making both decision makers and transit riders nervous, and it has to raise big doubts. How committed will cities and developers – not to mention merchants, business owners and potential residents – be to transit-oriented developments if the transit can vanish? Roads and highways may become heavily congested, but they don't disappear. – Paul Shigley

The recession has hindered the production of affordable housing in California – even while it has heightened the demand for affordable housing. Yet cities in California are increasingly moving away from affordable housing requirements. Two cities in inland Northern California have, within a week of each other, scrapped what were key components of their strategies to develop affordable housing. In Sonoma County, the Rohnert Park City Council voted to rescind its commercial linkage fee, which tied commercial development to a city fund for affordable housing. The fee was imposed, on a sliding scale, on all non-residential construction in the city. It reportedly generated only $25,000 over the past three years and yet was considered by the majority of the City Council to be an undue hindrance to commercial developers. Near Sacramento, Folsom made an even more dramatic move, by scrapping its inclusionary zoning ordinance. The ordinance required large developments to dedicate 15% of their units to low- and moderate-income residents. Folsom officials say that, ironically, getting rid of the ordinance may actually result in the production of more affordable units. Both cities present arguments that may, for as long as the recession lasts, carry weight among developers and residents alike. "The trend has been toward relaxation of fees and cities being far more amenable to trying to take steps to try to stimulate development," said land use attorney Todd Williams, a partner at Morgan Miller Blair who advises both cities and developers on affordable housing issues. Even for cities staunchly dedicated to providing affordable housing, inclusionary zoning has always been a controversial method of doing so. "When you are required to essentially give away 15 homes below cost, you're eating up all the (profit) and there's no reason to build the project," said John Beckman, executive officer of the California Building Industry Association's Delta Chapter. "That just prolongs the current economic calamity." Folsom adopted its ordinance somewhat under duress. It was among a suite of policies instituted in the wake of a 2001 lawsuit, brought by Legal Services of Northern California, claiming that the city had grossly shirked its legal responsibilities to provide affordable housing. Its housing element was found to be deficient and plaintiffs contended that the city simply had no interest in housing lower-income residents. "The deficiencies that we saw were that the city did not have enough sites that were suitable for affordable housing for all income levels, primarily lower income households," said Mona Tawatao, regional counsel with Legal Services. That suit ordered the implementation of the inclusionary zoning ordinance, calling for 10% of units to be allocated for very low-income residents and 5% for low income. According to the suit's plaintiff, those efforts have largely succeeded. "Based on the city's own report we would say that the ordinance was very effective," said Tawatao. "264 units were generated as a result. Also because of the litigation and continued pressure that people who need affordable housing and developers put on Folsom subsequent to that there have been affordable housing developments that have come forward." Though this new policy may seem like a backslide, city officials insist that it is anything but. Miller noted that the economic climate simply cannot accommodate regulations that hinder development. He also said that, because of the down economy, the city issued only 23 building permits last year and a correspondingly miniscule number of affordable units in a city of over 72,000 residents. Folsom's 2006 Regional Housing Needs Assessment called for the city to add roughly 480 total units per year, including over 1,800 low-income units between 2006 and 2013. A recent study of Folsom's housing capacity found that the city has the capacity to meet these goals but that it must up-zone a small amount of land to accommodate all the needed low-income units. But Miller insists that the city is not using the economy as a Trojan horse for efforts to dampen the production of affordable housing. To the contrary, they say, the elimination of inclusionary zoning will stoke development in the city and free up the city to develop affordable housing of its own – rather than rely on developers to come along and submit to the inclusionary zoning requirements. "If you're doing inclusionary housing….15% times 0 equals 0," said David Miller, community development director for the City of Folsom. "The program that we had was a disincentive to the production of housing because it put another impediment in place. We're all having problems getting new housing in the ground." The city intends to proactively produce affordable housing units rather than rely on the private market. Miller said that the city is using its redevelopment set-aside as well as funds from a $1.5 million housing trust fund to invest a total of $9 million in two projects that will total 130 affordable units. "I think that's a heck of a lot more robust program than you'd have if you were waiting for people to build market-rate," said Miller. Folsom's critics, though, are not convinced yet. "They've repealed this program and this system that the city said would generate 405 units to meet its state-allocated need but they have not come up with any program or any mechanism to replace it," said Tawatao. "Our position is that their repeal without replacement is a violation of state housing element law." Tawatoa added that the possibility of legal action is "on the table." A lawsuit would possibly be only slightly less palatable than the resistance Miller has faced in implementing inclusionary zoning. In fact, he said that by directing affordable housing to the city's urban core – decoupled from any market-rate developments – he can garner more public and political support. "My (city) council said that we like what you're doing because now we can go downtown or near TOD and we don't get neighborhood opposition," said Miller. "And we don't get the negative market impact on sales prices of other units." Though Rohnert Park's commercial linkage fee may seem somewhat arbitrary, the connection between job density—especially of low-paying jobs—and housing demand should not be ignored, some say. (Rohnert Park officials did not respond to repeated interview requests.) "I actually think the economic situation dictates that the opposite happens: that there be not just inclusionary zoning but other mechanisms that ensure that people getting back on their feet have a place to live," said Tawatao. "It doesn't do any good to have unsheltered people or to have people living super-far distances away or to live in substandard housing." Williams noted that both of these actions come on the heels of a contentious, and highly publicized fight over affordable housing in nearby Pleasanton (see  CP&DR blog March 26, 2010). There, the city was found to have stifled the production of affordable housing, far short of its allocation determined in a 2001 Regional Housing Needs Allocation. A March 2010 court ruling ordered the city to zone more land for affordable housing. For all the advocates who want to see more affordable housing, there remains a strong campaign to relax ordinances such as Folsom's and Rohnert Park's. The BIA, through its various chapters, has been waging an aggressive campaign to relax any laws that would hinder developers. Beckman, of the BIA's Delta chapter, said that he has been negotiating with the City of Ripon for almost five years to encourage the city of relax its inclusionary zoning ordinance. And while Tawatao ponders legal action to encourage Folsom to shore up its plans, Beckman said that his organization may end up suing Ripon to do the opposite. Contacts: Mona Tawatao, Attorney, Legal Services of Northern California , (916) 551-2150 David Miller, Community Development Director, City of Folsom (916) 355-7222 John Beckman, Executive Officer, Building Industry Association of the Delta ,  (209) 235-7831  Todd Williams, Partner, Morgan Miller Blair , (925) 979-3352