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Beutner’s Folly: The CRA’s Unlimited Authority to Squander Tax Money Anywhere in LA on Anything

TAKE ACTION: Governor Arnold Schwarzenegger, State Capitol Building, Sacramento CA 95814 Phone: 916-445-2841 Fax: 916-558-3160 http://gov.ca.gov/interact#contact

Please Arnold, veto Felipe Fuentes’ audacious bill AB 2531.

Don’t join the conspiracy to destroy LA in order to save it.

Don’t allow the scandal-plagued Community Redevelopment Agency to take tax money for schools, libraries, parks and other basic services and give it to just about anyone, for any purpose, projects or programs, anywhere in the city, even outside CRA project areas.

Don’t rob four million people to enrich the few.

Don’t destroy the intent of redevelopment law and put billions of dollars in public money into the hands of one man — First Deputy Mayor and Interim DWP General Manager Austin Beutner — without adequate safeguards to protect the public interest.

AB 2531 is now sitting on Gov. Arnold Schwarzenegger’s desk awaiting his signature or veto. Here’s what it does:   

        “This bill would, until January 1, 2018, authorize the Community Redevelopment
        Agency of the City of Los Angeles, at the request of the legislative body, to
       prepare applications for, and execute, economic development programs, to
       accept public or private assistance, and to expend those funds for any
       economic development activities inside or outside a project area within the
       territorial jurisdiction of the agency”

       This bill would, until January 1, 2018, expand the agency’s programmatic
       authority  by authorizing it to provide direct assistance including, but not limited
       to, loans, financial guarantees, or other financial assistance, to business within
       project areas in connection with new or existing facilities for retaining or
       expanding employment in the project area, increasing energy efficiency of
       buildings in the project area, or for other specified redevelopment purposes. This
       bill would specify that these programs constitute redevelopment, as defined.

The legislative history of AB 2531 shows it was written solely for Los Angeles, and nowhere else in California,  specifically to empower Beutner as the city’s economic
czar controlling the harbor, airport, DWP, planning, building and safety and among other departments to get his hands on local, state and federal money and channel it through his hand-picked leadership at CRA to whomever he wants.

It’s all being done in the name of “jobs, jobs, jobs” no matter what they cost the public and is backed by city and San Fernando Valley business groups, enviornmentalists and, of course, City Hall’s favorite union, the  IBEW, which stands to benefit greatly since the key justification for AB 2531 is that there be some small environmental connection, as small as any increase in water or power efficiency or use of recycled materials.

The sole purpose of existing state redevelopment law is to “expand the supply of affordable housing, expand  job opportunities, provide and environment for social, economic, and psychological growth and well-being.”

In other words, it’s supposed to help the poor segments of society. But in LA, the vague language has been used almost entirely used to subsidize skyscrapers and luxury hotels and shopping centers and entertainment centers for the rich — projects that made the wealthy even wealthier while providing damn little affordable housing or good-paying jobs.

Under AB 2531, CRA money can be used for almost any purpose: Job training, small business incubators, funding non-profits, construction loans and for funding capital and equipment purchases without the restriction of being for a new CRA building project.

“AB 2531 allows  redevelopment officials to move away from paying for physical projects to paying for programs and services,” according to the Senate analysis. “The bill marks a significant departure from redevelopment’s traditional purposes.”

The bill analysis takes note of Beutner’s extraordinary role and the radical changes he wants to make.

“The City of Los Angeles has a First Deputy Mayor who serves  as the Chief Executive for Economic and Business Policy, advocating for investment and jobs by working with the  City’s Department of Water and Power, the Port of Los Angeles, and the Los Angeles World Airports.  However, Los  Angeles doesn’t have an economic or community development  department that coordinates municipal efforts to attract  and retain private investment and jobs. City officials  want their Redevelopment Agency to take on economic development duties in addition to its existing  redevelopment efforts.”

The analysis then raises concerns about Beutner’s broad role and authority, asking “why an agency committed to redeveloping blighted areas should tackle a broader, citywide mission. Will the CRA-LA lose its focus during a  seven-year experiment as an economic development agency?”

Noting this is a “foray into paying for programs, not just projects,” the question was asked: “Where does this mission creep lead?”

The bill passed both houses along party lines and in the end was scaled back in the Senate to only impact LA after a wide array of concerns were raised under headings that included “Mission creep,” “Duplication and overlap,” “Good ideas for good actors, bad ideas for bad actors,” “Protecting the public’s investment,” “Missing: Oversight and Accountability,” and “Only in LA?”

Under “Not Fiscal,” the point is made that half the property tax revenue that feeds the CRA comes from schools so the state is required to backfill that lost revenue. At the height of the boom in 2007-8, that cost the state general fund $5.3 billion, and this year it’s half that amount.

The analysis shows the ingenuity of this whole maneuver of getting the Legislature to add to the $20 billion-plus deficit to fund Beutner’s Folly:

“This expansion of  redevelopment’s definition and purposes means that local         officials can divert funding away from physical redevelopment projects to economic development programs. Because about half of statewide property tax revenues go to
schools, it’s fair to say that half of redevelopment agencies’ tax increment revenues come from schools.

The State General Fund must automatically backfill the difference between what a school district receives in property tax revenues and what the district needs to meet  its revenue allocation limit. In other words, these  payments to the schools are an indirect state subsidy to redevelopment agencies.”

If the governor signs this bill, the only protection the public has an unethical mayor who has checked out of his job and a City Council made up of toadies who go along for the ride 99.93 percent of the time unanimously.

Arnold, please don’t sign AB 2531. LA is your city as well as ours. Save us from a government run amok, a government so desperate and panicked by the extent of its failure, it will sell out the city’s future for 30 pieces of campaign gold. 








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22 Responses to Beutner’s Folly: The CRA’s Unlimited Authority to Squander Tax Money Anywhere in LA on Anything

  1. Anonymous says:

    Call Sacramento or E-Mail Governor Schwarzenegger to veto AB 2531.
    Governor’s Office:
    Governor Arnold Schwarzenegger
    State Capitol Building
    Sacramento, CA 95814
    Phone: 916-445-2841
    Fax: 916-558-3160 ( new number )
    http://gov.ca.gov/interact#contact

  2. Anonymous says:

    Holy shit! This is a really big deal. How’d this one get past everybody?

  3. Anonymous says:

    Geezus Chr!

  4. Anonymous says:

    You can email the Governator here:
    http://gov.ca.gov/interact#email

  5. Anonymous says:

    “If the governor signs this bill, the only protection the public has an ethical mayor who has checked out of his job and–”
    Ron, surely you mean’t “unethical” mayor.

  6. Anonymous says:

    Ron, you’ve got the bill as both AB2531 and AB2431 in your article. Pls correct.

  7. Antonimous says:

    The City Council did not approve AB 2531 before it went to the Legislature. Write to Jan Perry, telling her to DEMAND that AB 2531 be vetoed because of the “process” – just like she demanded that SB 1168 be shot down “because of the process”. (SB 1168 was the bill that would have given Trutanich the ability to use a Grand Jury.)

  8. Anonymous says:

    Someone needs to forward this to KFI John & Ken. How can the city council sit on their butts and not do anything about this? Don’t they represent the people? That little man Beutner needs to be stopped and fast. Where is Coooley on this crap?

  9. Anonymous says:

    Cooley doesn’t have the guts to touch our little Mayor. The rules of the game are that you always hit on the most weak and helpless people, so you can show you did something about corruption. Just watch the City Planning Commission or the City Council, who will try to hold up the small projects with no political influence and let the big ones go through. This is what bullies do.

  10. James McCuen says:

    I will send my comments in to the Governor to veto this, but remember that Riordan is very much for this and will advise his friend Arnold to sign this.
    This is one area that has by partisan support, giving hard-earned taxpayer dollars away to Billionaire developers.

  11. Anonymous says:

    “Cooley doesn’t have the guts to touch our little Mayor. The rules of the game are that you always hit on the most weak and helpless people, so you can show you did something about corruption.”
    Oh yeah, poor Robert Rizzo, so weak and helpless

  12. Anonymous says:

    Small city of no consequence that would not affect Cooley’s career negatively.

  13. Elaine Brown says:

    We need to blast the City Council with emails,faxes and phone calls.
    This is so serious that if LA isn’t already dead, it will be if this passes.
    Isn’t it illegal to write state legislation for a single California city?
    Fuentes tried this on Sunland Tujunga and surrounding LA County and Glendale by writing legislation favorable to the potential developer of the Verdugo Hills Golf Course, but we stopped it with immediate action.
    Obviously this bill affects the whole city, but it will lead to a huge lawsuit if it is signed and they know it! Let them know you know it, too!

  14. Anonymous says:

    Outrageous! Who the hell do they think they are to by-pass public input. We need to start recalls against all of them. They are not
    “representatives” They are all greedy, special interest, own agenda @#$#’s. They are worse the Bell city officials. These people were supposed to be above reproach and represent EVERYONE, not their own pocketbooks!They are no better than
    racketeers. If they were so interested in JOBS,
    where were the incentives to keep all the business from leaving the state? They all get an F for failure!

  15. taxpayer says:

    CRA hired lobbiest Jim Dantona this month with a working title of Chief Deputy to CEO. This title does not appear on CRA’s posted current salaries because the position actually used is Assistant to the CEO at $123,912. He has extensive experience in Sacramento and is very politically connected throughout Calif and Washington, DC.
    We the taxpayers are paying for him to lobby for the passing of this bill.
    Today CRA CEO Essel also appointed him acting Dirctor of Public Affairs. Essel has been closly monitoring info given to the press/others by Board Members, CRA staff and has directed that all infor come from the Public Affairs Dept. where she has placed Dantona.
    This bill should not pass, but as mentioned above CRA is worse than Bell by all the links and people they control that are paid for by taxpayers. It is difficult to untangle facts to find out how CRA is doing business.

  16. taxpayer says:

    CRA hired lobbiest Jim Dantona this month with a working title of Chief Deputy to CEO. This title does not appear on CRA’s posted current salaries because the position actually used is Assistant to the CEO at $123,912. He has extensive experience in Sacramento and is very politically connected throughout Calif and Washington, DC.
    We the taxpayers are paying for him to lobby for the passing of this bill.
    Today CRA CEO Essel also appointed him acting Dirctor of Public Affairs. Essel has been closly monitoring info given to the press/others by Board Members, CRA staff and has directed that all infor come from the Public Affairs Dept. where she has placed Dantona.
    This bill should not pass, but as mentioned above CRA is worse than Bell by all the links and people they control that are paid for by taxpayers. It is difficult to untangle facts to find out how CRA is doing business.

  17. Anonymous says:

    Is Cooley going to investigate the Mayor? Don’t think so. We don’t even know what happened to “Ticketgate”.

  18. Anonymous says:

    Has anyone seen Jan Perry jump up and down about CRA going behind their backs as she did for the City Attorney. Corrupt damn woman.

  19. Anonymous says:

    Look what this bill does: It tries to legalize taking taxes and giving it directly to business for jobs. The City of Bell did the same thing without a special bill in the Legislature: It gave money directly to a car dealer who took the money and went out of business. Want a recipe for corruption? This is it.
    However, does anyone think this bill might be unconstitutional? Special legislation for one City for no good reason. What about the lack of a nexus between a redevelopment plan covering an area and taking its tax increment and spending it elsewhere? Does this mean that Pacoima tax increment will pay for luxury park amenities in Brentwood?
    How about giving taxes collected in South LA to a business operation run out of a home business in Pacific Palisades?
    Are these things “permissible” under the CRA/LA’s special bill? It sounds like they are.
    Are any of them constitutional?
    How about getting all of the Clean Sweep candidates to go to City Council next Tuesday to rail against the absolute hypocrisy of the Council being “concerned” about the bill for a Municipal Grand Jury not going through City Council, but all of them quietly rubbing their hands together hoping no one would catch this under the radar bill for the CRA/LA?

  20. Bob says:

    Thank you Ron, this bill was vetoed!:http://dl5.activatedirect.com/fs/distribution:letterFile/yvcee9xanplikz_files/z65f2mckjt1yte/0/0?&_c=d|yvcee9xanplikz|z65p1zm6c0d0km&_ce=1285939234.87535f10eef4d1fd07ed4d0442a673dc

  21. Keely says:

    Thanks for interesting information. I’ve never read so informative post.

  22. hemos says:

    Thanks for the information, really useful as for me, I am glad to get to the right place!

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