Editor’s Note: The City Council on Tuesday voted unanimously (Huizar absent) to join the mayor in fighting the governor’s plan to abolish CRAs and Enterprise Zones, effectively opposing his solutions to the state’s budget crisis and setting the stage for more of the same political machinations that have jeopardized the future of the city and state. Here’s a breakdown of the governor’s budget proposals from Valley Assemblyman Bob Blumenfield, Budget Committee chair (GovernorsBudgetProposal.pdf).
Gov. Jerry Brown set off howls across the state with his assault Monday on Community Redevelopment Agencies and Enterprise Zones — the instruments that have so long been abused by local politicians to enrich developers by robbing the public of good schools and quality services.
Our own Mayor Antonio Villaraigosa said Brown’s proposal to “completely eliminate the Redevelopment Zones and State Enterprise Zones is a non-starter.”
Added Christine Essel, CEO of CRA/LA: “Governor Brown is proposing to dismantle an economic tool that has a 60-year track record of success in creating jobs and stimulating economic activity across the state.”
That should be easy to test:
Are luxury hotels, luxury entertainment projects and luxury skyscrapers more valuable in economic and quality of life terms than cops on the streets and libraries that are open and programs in the parks for kids”
Does it help the working poor struggling for a better life in Boyle Heights to fill their neighborhood with housing for the city’s derelicts, mentally disturbed and hopelessly poor?
Understand how it works: The CRA takes over huge areas of the city and subsidizes development and then keeps the incremental increases in property taxes, often using eminent domain power to seize private property which it gives as a gift to private developers to build projects nobody wants except the people who profit from them.
This is no small matter, amounting to $226 million a year – almost enough to get the city back on track to financial solvency.
The CRA isn’t cheap to run either, with a payroll of $27 million a year plus $15 million for benefits and $10 million for office and administrative expense — a total of $50 million a year.
Who needs it?
Long-time LA Times City Hall reporter Bill Boyarsky, who crusaded with Councilman Joel Wachs against the original outlandish giveaway to AEG for Staples Center, dismisses redevelopment as a “huge boondoggle,” saying the agencies “suck money from the schools for the benefit of land developers.”
“Let redevelopment beneficiaries like billionaire Phillip Anschutz, who owns downtown’s LA Live and Staples Center, finance their own projects. If we end the subsidies, we can put the money to better use–the schools.”
With more than $5 billion a year at stake, the governor faces a fierce fight from the vested interests that thrive on redevelopment, including the politicians who use CRA projects to raise vast fortunes for their campaigns and bureaucrats like Essel who live so well on their huge salaries.
Brown noted at his press conference Monday that in Oakland where he was mayor Jack London Square was
redeveloped without the use of CRA or Enterprise Zone monies..
“Redevelopment takes money from schools,
cities, and counties … what we’re doing here is spending money at
the local level that the state doesn’t have. So we want to take that
money and leave it at the local level for the purposes that it was
historically intended. That’s police or fire or local activities,
county, or schools,” Brown said.
“Enterprise zones, again, these are all–they have their good points–but
it is almost a billion dollars, and overall they don’t add to the
general economy of the state. They move money around. And I know both
these things in Oakland were helpful, but I can tell you this: that if
the local government cleans up their regulatory underbrush–really goes
out and helps people develop and overcomes a lot of the NIMBY-ism–that
you can do economic development in a very solid way.”
Imagine that: If projects had to stand on their own feet financially and the approval process was done in the open instead of the darkness provided by the CRA, and the community was fully involved, we would have a healthier economy.
Business would flourish because we would have good schools and paved streets and services that made our communities healthy and our people prosperous.