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John Tuite’s $1.54-Million Parachute

Los Angeles redevelopment boss John Tuite’s $1.54-million golden parachute is based on a concept that’s proved disastrous for the sports world, the no-cut contract.

For those of you who don’t read the sports pages, it works like this: A weak-minded baseball team owner, hungry for victory, offers a pitcher a few million for five years or so. The athlete gets paid whether or not he plays well. More often than not, performance falls short of expectations and the ballplayer is given his money and goes fishing in the Canadian Rockies.

In the same way, Tuite’s contract with the Los Angeles Community Redevelopment Agency mandated that he continue to receive his salary, raised to $197,000 a year, plus fringe benefits, whether or not he worked. A couple of years after Tuite signed the contract, the agency board decided he was no longer capable of playing winning bureaucratic ball. Even though the contract doesn’t expire until July, 1992, the board members told him to take his money and go.

Not to overwhelm you with details, but the bottom line is that Tuite gets paid for the remaining months on the contract, receives a farewell bonus of $220,000 and will get a pension of at least $35,000 a year for the next 30 years. And he’s only been on the job for 4 1/2 years.

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Nobody familiar with the history of the CRA should be surprised.

The redevelopment agency was born in the boom-boom building years just after World War II when Los Angeles decided to wipe out its past and bulldoze the old Victorians on downtown’s Bunker Hill--and the hill itself. Successive mayors endorsed the CRA, none as enthusiastically as Tom Bradley. One of his first acts was persuading the City Council to expand the redevelopment area to include all of downtown. Today’s high-rise downtown is the result.

The CRA bought land cheap or condemned it and sold it to developers. The new buildings produced huge property tax revenues, which filled the CRA treasury. Those property tax dollars go into a special redevelopment fund. That means they can’t be used for schools, health care, law enforcement and all the other services so badly in need of money.

Instead, the CRA uses the money to buy more land for redevelopment projects around the city. They’re located in several council members’ districts. Developers of these projects contributed to council members’ campaigns. Big CRA supporters, council members pretty much let the CRA run itself. It’s a combination of mutual back scratching and patronage hard to equal in local politics.

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In the 1980s, the environment changed. Advocates for the poor gained political power in this heavily Democratic, liberal city and demanded that the CRA tax dollars be used for low-cost housing construction instead of more high-rise developments. Increasingly unpopular high rises, which also upset slow-growthers, began to lose their attraction. Council members picked up on this, as did Bradley. His deputy mayor, Mark Fabiani, became increasingly critical in private about Tuite and the chairman of the CRA board, Jim Wood.

That wasn’t Tuite’s game. He’s a hot-tempered man who hates to lose an argument. Compromise is not his style. Tuite and his ally, the powerful chairman of the CRA board, Jim Wood, clashed repeatedly with some council members. One day, Councilman Zev Yaroslavsky held a press conference on Skid Row denouncing CRA housing policies. Red-faced, absolutely furious, temper out of control, Tuite held his own Skid Row press conference immediately after, denouncing Yaroslavsky.

CRA board member Carlyle Hall, an attorney who was put on the board at Fabiani’s recommendation, provided some details of Tuite’s departure. He said Tuite “was not effective in his dealings with the council. . . . There was constant friction between him and the council. We need to repair those relationships.” Tuite, he said, was “tired . . . burned out” and “needed to move on.” It should be noted that the mayor has a different version. Saying nothing bad about Tuite, Bradley said the administrator could have remained on the job until his contract expired.

The big question, of course, is why the big payoff. Hall conceded that Tuite’s departure came “at a fairly stiff price tag. . . . He was entitled to a severance payment and to get paid whether we used his services or not.”

Now that the council has seen the contract terms, fiscal experts disagree with Hall. They say the CRA board gave Tuite much more than the agreement required of the agency.

That’ll have to be determined in the weeks ahead. What council members now realize is that they should have forced the CRA to reveal Tuite’s salary package years ago. By giving the CRA super-agency status, they have only themselves to blame.


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