Locals need to remember real purpose of redevelopment

By Dan Walters -- Bee Political Columnist
Published 2:15 am PDT Tuesday, June 15, 2004

Every once in a while, we need to remind politicians that "redevelopment" is supposed to be a tool for cleaning up blighted urban neighborhoods and improving the quantity and quality of housing - not a conduit for siphoning money from the public treasury into developers' pockets.

The reminder is necessary because local government officials, civic boosters and subsidy-seeking developers so often forget it.

The misuse of redevelopment powers to underwrite shopping centers, auto malls, big-box retailers and other projects became rampant after voters enacted Proposition 13, which slashed property taxes, in 1978. Faced with a severe loss of property tax revenues, local governments encouraged sales tax-generating retail businesses and increasingly used redevelopment to subsidize such projects, often luring them away from nearby cities.

Although redevelopment law required areas to be declared as "blighted" to qualify for special treatment, local officials stretched the definition to ludicrous lengths. One city even declared unoccupied, undeveloped marshland to be "blighted" because it was subject to periodic flooding. Redevelopment abuses became even more widespread after the state, in the midst of a severe budget crisis, shifted even more property taxes from local governments to schools. And in 1993, the Legislature significantly tightened the law, attempting to limit local redevelopment projects to truly blighted neighborhoods.

The Legislature has more than an academic interest in the creative uses of redevelopment by cities and counties. Redevelopment law allows local governments to retain the extra property taxes that their projects generate - which means the state must make up the loss of property taxes to schools under an education finance law that voters enacted in 1988. It is estimated, in fact, that the state treasury is being tapped for an extra $1.5 billion a year in such school payments - money that, in part, flows into the pockets of those who financially benefit from redevelopment projects.

Local officials don't like the 1993 reforms for obvious reasons. And now Los Angeles wants to undermine them directly to attract a new National Football League team.

The Los Angeles Rams played in the state-owned, 1930s-vintage Memorial Coliseum for many decades, then decamped for Orange County and later moved to St. Louis. The Raiders shifted from Oakland to the Memorial Coliseum in the 1980s, then were enticed back to Oakland. Los Angeles boosters have kicked around several sites but seem to have settled on reconstructing the Coliseum to make it suitable for a new team (perhaps the Raiders again), with a half-billion-dollar price tag. And Los Angeles Assemblyman Mark Ridley-Thomas is carrying legislation that would change redevelopment law to allow subsidies to private investment in the stadium.

Since 1966, the Hoover Redevelopment Project has encompassed the area around the Coliseum south of downtown Los Angeles. The Ridley-Thomas bill would loosen the state restrictions on extending the project's life and exempt it from the 1993 restrictions on declaring an area "blighted." The state, of course, would be on the hook for property taxes that the plan would divert from schools.

The bill has cleared the Assembly and faces a vote in the Senate Local Government Committee. A critical committee analysis points out that, if approved, the measure would allow the Hoover project to be extended until 2051, nearly a century since its creation. "Legislators know that rehabilitation of blighted neighborhoods takes time and demands policy-makers' patience," the analysis continues. "But the committee may wish to consider why it should take Los Angeles officials a century to redevelop the Hoover neighborhood. How long is long enough?"

The measure, of course, has nothing to do with blight. It's all about tapping the state treasury to subsidize private development - exactly what the 1993 reforms were trying to curb. And if Los Angeles succeeds in undermining those reforms, other cities will quickly demand parity for their shopping centers, auto malls - and sports arenas. Sacramento, for one, is trying to find a financial vehicle for building a new basketball arena in its downtown area.

http://www.sacbee.com/content/politics/story/9660681p-10584012c.html

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Reach Dan Walters at (916) 321-1195 or dwalters@sacbee.com. Back columns: www.sacbee.com/walters