Clash of values sparks an RDA budget cut rebellion

There’s no doubt about it: the one element of Gov. Jerry Brown’s
proposed state budget producing the most protest and the quickest
action so far is his plan to eliminate local redevelopment agencies
(RDAs).
There’s no doubt about it: the one element of Gov. Jerry Brown’s proposed state budget producing the most protest and the quickest action so far is his plan to eliminate local redevelopment agencies (RDAs).

Within days of Brown’s early-January fiscal announcement, RDAs all over the state rebelled in what amounts to a sharp clash of values, moving to place billions of dollars beyond the reach of state government, even if voters should approve a measure aiming to kill the agencies and move some of their money into desperately needy state coffers.

RDAs, their advocates maintain, are job-creating engines, producing or sustaining more than 300,000 jobs each year. They are the primary engine by which California cities have modernized themselves for almost 60 years, replacing blighted urban cores with everything from new city halls to stadiums, hotels, tourism-friendly “old town” districts, police stations, low-cost housing and shopping malls. Sales taxes produced in the new developments provide significant parts of many city budgets.

Critics, meanwhile, have long called RDAs vehicles for bias, cronyism and sweetheart deals of many varieties.

Essentially, the RDAs want things as they’ve long been, with all their money used locally for whatever projects they like. That’s what makes this a conflict of fundamental attitudes, casting what some see as the greater good against local interests. Buildings and business vs. vaccinating poor children. Students vs. stadiums. Statewide interests vs. local. And more.

What are these agencies, whose names can look to many voters like no more than bureaucratic alphabet soup?

For one thing, most RDAs are not really independent at all, their boards usually the same people who make up city councils. In many cities, council meetings are often adjourned only to have the identical individuals reconvene moments later as RDA boards.

These agencies possess the power to declare vast swaths of land “blighted,” a term with different meanings to different people. Once an area is designated as blighted, the RDA can buy up property and buildings there, then resell them to developers who put up modern new structures. That, for one prominent example, is how land was cleared in downtown Los Angeles for the Staples Center sports arena and the LA Live entertainment and shopping complex, site of the Grammy awards.

These deals usually have been funded by bonds. The difference in the property tax collected on new buildings over what was paid on the old ones lately amounts to more than $5 billion a year statewide. Most of that money – known as a tax increment – goes to pay off the bonds, with much of the rest used on new land deals in what has become a perpetual cycle. Brown wants $1.7 billion of that money for state coffers, where it would pay for things like parks, adult day care and keeping college tuition at or near current levels.

RDAs in some cities have been accused of using the “blighted” tag to get rid of homeless enclaves and other populations unwanted by wealthier citizens of the same locales. Because RDAs have a lot of leeway, prices they pay for property sometimes can be well above market values, an incentive for owners to sell without a fight.

All in all, these agencies have been a major vehicle for local politicians to promote business in their cities and decide who benefits. That would end under Brown’s plan.

RDA advocates point out that since the agencies were authorized by a ballot measure, it would probably take another one to end them.

Many RDAs wanted to take no chances once they landed on the Brown hit list. In Long Beach, for one, city council members voted to commit $1.2 billion in current and future RDA money to local projects – some not even specified – just to keep it out of state hands. The money would be spent over the next 10 years.

The Los Angeles Community RDA similarly plans to put away $930 million for use over the next five years. RDAs from Grass Valley to Palm Springs made similar fast moves.

No one is quite sure these actions will hold up if the RDAs are eliminated. But Brown was clearly not pleased, expressing hope that cities were not “planning on squirreling money away for the indefinite future when our schools, police and firefighters are in need of this funding.” Not to mention park rangers, road builders, community colleges and needy children, all down for big reductions in Brown’s proposed budget.

State Treasurer Bill Lockyer called the RDA moves “provocative acts of gamesmanship.”

They may be that, but they also reflect a deep conflict between overall state interests and local priorities. This deep division will most likely have to be decided by the voters via one or more ballot propositions, as there are few signs of give by either the governor or the local elected officials running RDAs.

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