Editor’s Note: Read the CRA emails obtained under the California Public Records Act here (CRA Email-1.rtf), (CRA Email – 2.doc), (CRA Email -3.rtf), and (CRA Email-4.doc). Note the CRA charged $19.70 for these documents and would only make them available on paper copies so there are occasional problems due to home scanning.
UPDATE: The CRA unanimously approved the revised plan today and it’s back on the City Council agenda Friday.
In the course of a frantic and chaotic 48 hours, LA CRA’s Chief Operating Officer Calvin Hollis put it bluntly in an email to Deputy Mayor Austin Beutner:
“There is a meeting being scheduled with CLA, CAO, and mayor’s office this afternoon to discuss a poison pill hail Mary to try to keep as much CRA funds in LA. Available to discuss at your convenience,” Hollis wrote in an email to the city’s “jobs czar” at 10:24 a.m. Thursday, Jan. 13.
A day earlier the State Legislative Analyst’s Office had offered support to Gov. Jerry Brown’s proposal to abolish Community Redevelopment Agencies statewide to put $1.7 billion a year in property taxes back into the schools and local government coffers as part of his plan to erase California’s $25 billiion budget deficit.
The LAO report warned the legislative action was needed to stop the CRAs, which are created by the state, from making an end run around Brown’s proposal by tying up as much property tax as they could before the issue was resolved.
Hundreds of emails included in nearly 200 pages of CRA documents obtained under the California Public Records Act by LA Clean Sweep shed light on how that warning triggered a chaotic two-day effort by LA’s CRA officials to develop a “poison pill” to lock up nearly $1 billion in local tax revenue.
The drama began with an email at 1:35 p.m. on Wednesday Jan. 12 from attorney Glenn F. Wasserman of Kane, Ballmer and Berkman to CEO Chris Essel, Hollis and other CRA officials warning them the freeze on new indebtedness might be enacted shortly.
“In light of this serious threat, we are advising our clients to notice and hold special meetings to approve any indebtedness that’s remotely ready to go,” Wasserman wrote.
“The urgency bill stopping agencies from incurring any debt or approving any project adoption or amendment pending drafting of the budget legislation could pass at any time. I am attaching a form of draft Cooperation Agreement that we have prepared. Let me know If there is anything we can do to assist you.”
Wasserman was alerted to the possibility that the Legislature might clamp down on new CRA deals from an email at 11:40 a.m. that morning from Wes Hough of the Public Resources Advisory.
“We recommend that the Legislature pass urgency legislation as soon as possible prohibiting redevelopment agencies–during this period of legislative review– from taking actions that increase their debt,” Hough wrote.
“Specifically, the urgency legislation would prohibit redevelopment agencies from (1) taking on any new debt that would be included on their Statement of Indebtedness — the
statement that identifies redevelopment agency debt and makes the agency eligible for property tax revenues, or (2) creating, amending, or extending any redevelopment project areas.”
At 2:06 p.m., just 31 minutes after receiving this information,, Hollis popped the question to Essel: “Why wouldn’t we do this right now?”
Working late into the night Wednesday and Thursday, CRA officials slapped together a wish list of hundreds of real and potential projects plus a draft cooperation agreement to dissolve the agency, turn over all its revenue streams to the city and reconstitute redevelopment programs outside the reach of the governor.
By the time Hollis emailed Beutner, a special meeting of the CRA Board already had been called for 8:30 a.m. Friday to approve the cooperation agreement with the goal of getting City Council action by the following Tuesday.
The LA CRA’s move triggered a defiant rebellion among CRAs and local elected officials that has jeopardized the governor’s tax-and-cut plan to erase a $25 billion budget shortfall in three to five years.
The emails reveal a lot was wrong with the slap-dash efforts by CRA officials.
There is no evidence anywhere in the emails or documents that the special meeting was legally called with proper 24-hour notice to the public. Without a document signed by Board Chairman Kenneth Fearn or by at least two other members, the meeting would be a violation of the Brown Open Meeting Act.
It is far from clear that proper notice was posted for the public to see 24 hours in advance or on the CRA website or even that what was posted was adequate since the list of projects and the total amount of tax dollars involved were a moving target until late that Thursday night and were still being added to during the meeting when the total involved jumped from $885 million to $930 million.
Challenged by Hollywood activists Bob Blue and Aaron Epstein in a “cure and correct” letter, the CRA insisted the meeting was properly called but “in an abundance of caution,” officials are going through the entire exercise again today at its regular bi-monthly meeting at 9:30 a.m. at the Garland Center, 1200 W. 7th St.
It says a lot about the mentality of City Hall that the mayor, City Administrative Office, Chief Legislative Analyst and CRA all colluded to allow just five days of public awareness for a revolutionary change in decades-old redevelopment policies and organization.
Yet the process that started on Jan. 12 has led nowhere in the ensuing six weeks – a period in which the CRA took a second swing at approving the cooperation agreement and a refined wish list of projects while the City Council failed to even consider the plan despite putting on its agenda every week.
For CRA officials those 48 hours of panic were a nightmare.
Early Thursday morning, Dalila Sotelo, the point person in preparing for the special meeting 24 hours later, was emailing from her Blackberry: “We need to release some pressure from this cooker … what are our options if we postpone the Board meeting until Tuesday? Can Council act the same day or would it have to act on Wednesday?
“No chance … that would take an absolute miracle,” messaged back Jim Dantona, the CRA’s communications director.
Whether the meeting would really be held wasn’t not even confirmed until late Thursday afternoon – 16 hours before its was scheduled — when the mayor was briefed following a meeting of CRA officials, Beutner staffer Gaye Williams, the CAO and CLA where concern was high “on the politics of our strategy.”
Only one Council member was aware of what was going on and that was Herb Wesson whose staff was packing in as many pipedream projects onto the list as possible.
It was an evolving list that started with the goal of reaching $885 million in projects to be submitted to the Board. A “drop dead” time of 6 p.m. Thursday was set for staff overseeing the 31 project areas to come up with their lists but they had only reached $350 million just 14 minutes before the deadline.
At one point, Sotilo plaintively messaged: “Different lists, different purposes, some of the same information … sorry for the confusion.”
At 8:03 p.m. Thursday, she reported the list was now “oversubscribed,” having soared to more than $1.1 billion.
At 12:26 a.m. Friday, eight hours before the Board meeting, Sotilo was messaging key staffers: “I hate to do this but this projects (in yellow) have $0 attached to them and will have to be removed from the final list. Can you PLEASE insert a number and to me and Suzan (Luu) by 8am. If I don’t have
it then, the CA will not allow us to include them.”
The agreement itself also was in a state of flux with questions about how it would, whether it was for five years or 10 or five with an option for five more years.
Confusion was so great that Gaye Williams from Beutner’s team, had to ask CRA officials for bullet point late Thursday afternoon to brief the mayor: “Something – doesn’t have to be perfect … I know enough to be dangerous.”
At one point late Thursday, Sotilo realized that the proposed agreement only protected the jobs of Essel and Hollis so she asked: “If City Council approves on Tuesday, are the employees unemployed as soon as the Cooperation Agreement is signed?”
The new proposal leaves the status of all employees to be negotiated if this deal actually goes forward.
The Board, of course, will approved the cured and corrected Cooperation Agreement and list of $930 million in projects without serious questioning.
This after all is the city’s “piggy bank” to enrich the rich and provide crumbs to the poor who are the ones who are supposed to be helping by redevelopment.
All in all, it’s hard to believe that the people we elect to the highest paid city offices in America and all the six-figure bureaucrats whose salaries and handsome benefits we pay would treat a penny of our money so cavalierly let alone nearly $1 billion.
Then again, it’s how the treat the public’s money all the time and why public services are being slashed and the perpetual budget crisis goes on and on.