Los Angeles New Times - Feb. 3, 2000
Fur's Flying
Alex Padilla needs to wake up to the incompetence of the L.A. Community Redevelopment Agency and stop touting a scam in the Valley
By Jill Stewart
There are a handful of government entities whose excessive power and hostility toward the public make them stand out from the many incompetent government entities. They include, most famously at the federal level, the Internal Revenue Service and, most notoriously at the local level, the Community Redevelopment Agency.
In Los Angeles, the Community Redevelopment Agency is so hated that City Councilman Mike Feuer won election, in part, on the promise that he would prevent the agency from "redeveloping" a large area of middle-class Sherman Oaks, which the redevelopment agency was positively drooling to control.
The agency is despised in Hollywood because it has poured tens of millions of dollars into such developer-enriching scams as the Ira Smedra project at Western Avenue and Hollywood Boulevard, home of a 30-foot hole. In downtrodden Hollywood, the agency is best known for adding black "sparkles" to the boulevard's pavement and driving out retail business.
The agency is so reviled that when the late Mayor Tom Bradley announced 10 years ago that much of Watts would be "redeveloped" by the CRA, enraged residents crammed into a local gym, commandeered the microphone, and shouted down Bradley's stunned staff. The Watts plan was abruptly abandoned.
Now, the agency wants to declare 6,835 acres of the northeast San Fernando Valley -- a gigantic swath bigger than the entire city of Santa Monica -- as "blighted." The "blighted" region would include Pacoima and substantial sections of North Hollywood, Sun Valley, Lake View Terrace, Hanson Dam, Sylmar, North Hills, Panorama City, Arleta, and Mission Hills. It would also include 45,000 residents, many of whom do not realize they live in "blight."
It's an understatement to say the fur is flying.
I got a call from a respected Democratic leader last week who pointed out that the "blighted area" will include two properties that are not even physically connected to the rest of the acreage: the Valley's gleaming Galpin auto dealership, owned by multimillionaire and powerful Police Commissioner Bert Boeckmann, and the hugely successful retail development at the former GM Plant, which recently sold for a staggering $200 per foot, or $43 million.
Why, the Democratic leader wondered, would some of the most coveted businesses in the San Fernando Valley be declared blighted? "This project stinks like a fish, from the head down," said the powerful Democrat.
It's funny how hated the Community Redevelopment Agency is, because in concept, redevelopment agencies sound like a good idea.
A community redevelopment agency is allowed under California law to declare areas "blighted" if they have no reasonable hope of improving from relying on normal governmental help such as tax incentives or normal private enterprise (like new construction). In other words, you have to be a damn desolate neighborhood to be legally declared "blighted."
If your area is declared "blighted" by the city council, this allows the redevelopment agency to finance improvements such as spiffing up dowdy business districts, renovating historic buildings, erecting affordable housing, and the like. Then, as the area begins to turn around, property values begin to climb, and people begin to pay higher property taxes. Those additional, or "incremental," new taxes are diverted to the redevelopment agency for the next few decades, which gives the agency millions of dollars to play with. Are you with me so far?
One big problem is that the usual recipients of increased property taxes -- the schools, county, and city -- get shorted while the redevelopment agency gets rich. Under state law, the redevelopment agency is supposed to reinvest the riches it reaps back into the area it took the taxes from.
And here is where the fantasy unravels. In Los Angeles, the Community Redevelopment Agency has proved to be utterly incompetent. Few neighborhoods in which it was allowed to seize taxes have ever been improved. Bunker Hill downtown is among the few successes, and that was achieved only by the mass eviction of the elderly and out-of-luck who lived in the old flophouses, long since torn down.
Now, a study by Patrick McGreevy in the L.A. Times shows that $115 million of our taxes, poured by the redevelopment agency into the NoHo arts district, has instead driven out businesses and home renters.
The agency paid for skinny palm trees and fancy brickwork in the hottest sector of the Valley. City Hall somehow prays that theatergoers will trek to NoHo on a new subway spur, which cost an incredible $300 million to $500 million -- nobody's sure. The money was stolen from local schools and infrastructure.
The CRA is such a negative force for change that, McGreevy showed, while NoHo was being "fixed," nearly identical fringe areas like Mar Vista and Van Nuys prospered with no such "antiblight" help. Says one former redevelopment backer: "The Community Redevelopment Agency spent $700 million in NoHo. Where did all the money go? It mostly went to downtown consultants. Very little actually hit the floor."
Most common are CRA money pits like the still dowdy Spring Street and trashy Hollywood. Antiredevelopment activist Don Lippman notes: "Hollywood was better in 1986, before they adopted the redevelopment project, than it is today. Hollywood went down fast after the Community Redevelopment Agency came in."
City Councilman Alex Padilla, whose MIT education apparently failed to prepare him to recognize the incompetence of the Los Angeles Community Redevelopment Agency, needs to wake up from his coma. The City Council is expected to vote in May on whether to approve the redevelopment scam in the Valley, and Padilla is selling the idea inside City Hall as nothing short of wonderful.
In fact, the redevelopment agency admitted in its recent Environmental Impact Report that, optimistically, it really only intends to renovate a tiny 217 acres in the giant 6,835-acre swath of the Valley that it wants to declare "blighted."
That sounds like an error. It isn't.
You see, if the City Council declares several thousand acres in the Valley as "blighted" -- including some of the Valley's biggest property tax and sales tax generators, like Galpin Ford and the GM Plant retail center -- this would seriously impair the Valley's chances to secede from the city. How can the Valley secede from L.A., if for the next 45 years a huge hunk of its property taxes will be going to a redevelopment agency completely controlled by the L.A. City Council?
The City Council, not coincidentally, hotly opposes secession.
The truth is that over the next few years the northeast Valley's property values will rise -- without the redevelopment agency's help -- as the L.A. economy continues to boom and residents and business owners in places like Lake View Terrace, Arleta, and Sun Valley undertake typical improvements such as enlarging their homes or upgrading their storefronts. Yet if "blight" is declared, the redevelopment agency will take the credit for rising property values and reap the taxes.
The entire controversy is a gargantuan political stink bomb in the making. And it is being led by Councilman Padilla, a promising new member of the council who is displaying the arrogance of a man incapable of learning from history.
Despite his fresh-faced demeanor, in December Padilla showed that he may be just as sleazy as some of his City Hall colleagues. In order to ensure that the northeast Valley has no say in opposing the giant declaration of "blight," Padilla breached basic ethical behavior by rigging an election of a citizen advisory board.
As Padilla knew, most residents of the northeast Valley heavily opposed their area being declared "blighted." Crowds of 200 attended meetings on the issue, and straw votes showed fewer than 10 residents in favor of redevelopment. The opponents were expected to win a large majority of seats on a powerful citizen advisory board that was expected to go to war with the Community Redevelopment Agency.
But Padilla must have borrowed a dirty-tricks manual from Jackie Goldberg or Mike Hernandez. Padilla quietly contacted Laidlaw Transit, a city contractor that financially relies on its good relations with council members, and asked Laidlaw to provide free buses to Padilla. Padilla used the buses to bring in dozens of local residents to elect a pro-CRA citizen board.
Says one business leader, who along with other northeast Valley leaders met face to face with Padilla shortly before the advisory board election: "Alex looked us in the eye and said it was up to the community to decide whether it wanted the CRA, and he would respond to whatever they decided. He told us he didn't want to taint the process by inserting himself. Then behind the scenes, he arranged for buses. It made me feel sick."
I understand from observers present that many of those who were bused in worked last year on Padilla's campaign for city council. Others were led to believe that their own neighborhoods would be improved, not grasping that only 217 acres will be upgraded.
This scummy activity by Padilla was seen as perfectly normal by the crowd at City Hall, where corrupt council members have been rigging elections to the city's citizen boards for years. The City Ethics Commission was shamefully silent.
Even as Padilla was being lauded in City Hall for strong-arming Laidlaw Transit, a respected attorney who hotly opposes the declaration of blight was ousted from the citizen advisory board by city elections czar Mike Carey for supposedly "unethical" behavior.
The attorney, Glenn Hoiby, was one of the few antiredevelopment agency citizens elected to the powerful advisory board on December 17. But his election was nullified in January by Carey (who, by the way, is the city clerk and, therefore, works for Padilla and the corrupt City Council majority). What did the supposedly dastardly attorney Hoiby do to get kicked off the citizen board after being elected by citizens?
Hoiby, who understands election law perfectly well, wrote letters to some nonprofit agencies in the northeast Valley that had been campaigning for Padilla's pro-CRA slate for the citizens' advisory board.
Hoiby, in the most unthreatening tone imaginable, politely reminded the charities (which rely on Councilman Padilla for scraps from the city budget) that, under federal Internal Revenue Service laws, charities are prohibited from campaigning for candidates for public office.
How outrageous! The corrupt Hoiby clearly belongs in jail for election tampering! And the virginal Padilla should have a statue erected in his honor for getting out the vote!
So now you know why the Community Redevelopment Agency is so hated. It's because, wherever the agency goes, "up" becomes "down." Wealthy car dealerships become "blight." Election rigging by a city councilman becomes "involving the community." And property taxes become rewards for well-connected developers.
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