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Seeing Through the Magic of Redevelopment

courtesy of Columnist Steve Greenhut over at Cal Watchdog, I was thrilled (I’ll spare you the “giddy” word Steve used) when I heard last month that redevelopment agencies had been dealt a double death blow by the California Supreme Court. Over the years, these once useful tools for wiping out urban blight have turned into three headed zombies that have managed to put good people out of their businesses and homes, siphon off tax dollars from schools and generally slap the citizens of this state in the face, all in the name of urban renewal. You may remember Kelo v. City of New London, Ct., where the Supreme Court of the United States upheld eminent domain rights of government to take private property at will “for the public good”. The Court held that the taking by a public entity was permissible as “public use” because of the economic development. Kelo and others lost their homes for the sake of urban renewal for a project that was subsequently abandoned by the investors. Nothing has been built on the site since.

Redevelopment is also responsible for the crony capitalism we see all around us each day. It is a particularly nasty form of corporate welfare that lines the pockets of consultants and lobbyists with millions of dollars of taxpayer money while producing a facade of tax benefits. One only has to look at the mismanagement of The Great Park by Larry Agran and the three ring circus run by ringmaster Ken Smith who has certainly made his mark in the Great Park soil while lining his pockets with redevelopment cash. After years of “development”, the park’s main claim to fame is the huge orange balloon that lifts visitors 400 feet above the landscape for a lovely view of the county. More than fifty million dollars has been spent on designs, changes to designs and -mostly- consultant fees, with little to show in actual park. That is pretty expensive for a balloon, even if it isn’t powered by hot air. Fortunately, the Great Park was a base reuse and did not displace businesses and homeowners.

Tustin also has a base reuse plan that did not displace folks for the sake of urban renewal. We have a nice, if soemwhat empty, shopping center and a few houses to boot. The Orange County Sheriffs Academy has relocated to the old base and there is discussion at the county level to reuse one of the old blimp hangars for a “great” park of our own (although it will be a county park as Tustin chose to have their hangar demolished). Redevelopment money was used on the base to help build infrastructure and to lure developers to build homes, apartments and businesses. Unfortunately, when the economy went sour, no amount of taxpayer money could keep the developers interested and the land sat largely fallow.

Tuesday night’s city council meeting had the Redevelopment Agency, ramrodded by soon-to-be-double-dipping Christine Shingleton, singing their swan song to the audience. Shingleton gave a presentation that would have made Jerry Brown cry. She talked of all the redevelopment dollars spent on infrastructure and how much money the city had planned to spend in the areas in need. In the staff agenda report provided to the city council, she lamented:

These expenditures included specific neighborhood improvements, economic development, public infrastructure and community facilities, specific housing programs for preservation rehabilitation, new construction first time homebuyers and homeless assistance administrative and direct costs for all programs and administrative indirect costs. These projects would have created thousands of high paying permanent jobs and construction jobs. It is estimated that for every 1 dollar in redevelopment spending nearly 13 in total economic activity good and services is generated in one year

Of course, the last statement is not supported by facts. This was simply supposition on the city’s part that redevelopment is necessary to the continuation of the good life here in Tustin. It is debatable as to how many jobs (at least, living wage jobs) would have been created through redevelopment agencies. Further, there are other studies showing that the dollars brought in by redevelopment agencies are not sustainable and that the benefits from redevelopment generally cease in the mid-term. One of the original tenets of redevelopment, of course, is to provide affordable housing. In fact, twenty percent of redevelopment money is supposed to be used for affordable housing. But, from what can be seen, only around 800 of those housing units have been developed. That is less than three percent of the housing in Tustin. And of those, how many remain “affordable”. Oh, and, let’s not forget that 5 employees (plus a percentage of one employee) salaries, plus considerable consultant fees  are paid by Tustin’s redevelopment agency. Well, I’m sure the city will have no trouble finding work for RDA employees and they can just take the funds out of the same place they pulled funds for those city council iPads. I’m not sure how they will feed their consultants.

Then there is the MCAS base reuse development which has been largely underwritten by the redevelopment agency. The District shopping center has been built, along with a scattering of houses. Infrastructure has been placed and things were looking up until the housing crash. But, does that mean the end of redevelopment if the RDAs do, in fact, go away? Certainly not. The city is looking, along with other cities in the same situation, at promoting legislation that would be beneficial to developing base reuse plans and vehicles for funding specific to base reuse. These new base reuse specific entities could also be used to roll over bond debt from the RDAs, at least to the extent the base reuse participated.   And, in any case, the base properties are prime for development.The city took the bold step to act as master developer for the base and early results are promising. When the natural course of business picks up as expected this year, we should see renewed interest in building without the necessity of providing tax dollars as incentives.

Just like the rest of government, Tustin needs to stand on its own two feet without the benefit of magic shows provided by its redevelopment agency. The amount of money coming into the city should and will be spent on its infrastructure even as RDAs wind down. But, conservatives with business interests cannot leave it alone. Even now, they fight for the life of RDAs through their new best friends, the Democratic led legislature. Senator Alex Padilla authored SB659 that would extend the life of RDAs for another few months. One could argue that the time is needed to put the city’s house in order. But, the city has already developed a time line and proper resolutions to wind down the RDA and transfer responsibility within the February timeline. So, the only reasonable explanation for extending the time is to allow RDAs to continue to operate while business interests and legislators come up with legislation to replace RDAs .It is also expected that some RDAs, because of the bond obligations, will need up to 15 years to completely dissolve. That is a long time for proponents to come up with a plan to resurrect this monster.  And that, folks, is why you may see the zombie’s arm thrusting up through the dirt.

The City Council/Redevelopment Agency wants to do its part as well. A “staff” (or is it Jerry) proposal has been made to diverge from city policy and to create a blanket authority to spend up to five thousand dollars of taxpayer money to send staff and councilmembers to Sacramento to lobby legislators who are already on board with recreating RDAs. Guess who will be one of the lobbyists? I would guess our most fiscally conservative member would go. I am pretty sure it will be no one on the left side of the dais.

Are the interests that wish to keep RDAs alive stronger than the California Supreme Court? All I can say is it should be an interesting time around this state over the next few months to see what pops up on the horizon. And, like Steve Greenhut, I hope coalitions emerge to keep this “Evil Thing” in its grave.