Another Look at Subsidies for Redevelopment

Sometimes you have to listen to the voices of the obsessed.

That thought came to me last month as I attended a meeting of a citizens advisory committee on the North Hollywood Redevelopment Project.

A remarkable event had just occurred. The obsessed--a group of anti-redevelopment gadflies known as the Concerned Citizens of North Hollywood--had taken over the committee in a confusing parliamentary maneuver.

Ironically, once the gavel landed in the hands of Mildred Weller, the group’s president, she became as dictatorial as her predecessors, rudely denying them a chance to speak.

I wasn’t surprised, having watched the fiercely obsessive way the Concerned Citizens have battled North Hollywood redevelopment over the last two years.

The group is part of a loose citywide network of gadflies who oppose the city’s habit of tearing down old buildings and subsidizing developers to replace them with something bigger and fancier.

City Hall hates people like Weller. You can see why. She and the other gadflies immerse themselves in obscure reports and meetings of little-known committees, squirreling away evidence to support their conviction that all politicians are crooks.

But Mildred Weller had a good point as she dictatorially slammed her newly acquired gavel on the table.

The North Hollywood Redevelopment Project is one of 585 such projects in California. They were created in a bigger-is-better war on blight, intended to eliminate slums and promote revenue-producing business development.

The North Hollywood project, run by the Los Angeles Community Redevelopment Agency, wants to turn the fraying down-home North Hollywood into Big Town.

Here’s how the process works: The redevelopment agency buys your house or, if you refuse to make a deal, compels you to sell by invoking its power of eminent domain.

Eventually, the CRA owns all the lots on your block. It sells the block cheaply to a land developer, who puts up a big shopping center and a high-rise. The low price of the land amounts to a subsidy to the developer.

Redevelopment advocates argue that these subsidies are worthwhile. Construction jobs are created, and later, there will be work in the shopping centers and in the high-rise offices.

Moreover, property tax revenues rise because the shopping center and high-rise are worth more than the old houses that once occupied the block.

Statewide, this added property tax revenue amounts to more than $1 billion a year. But as the state Senate Local Government Committee has pointed out, the money goes straight back to redevelopment agencies. The agencies use the money to pay for more projects, more subsidies to land developers.

Schools, police and fire departments, libraries, parks, hospitals, mental health clinics share little, if any, of the bounty.

The Concerned Citizens of North Hollywood and other critics of redevelopment want to drop the subsidies. North Hollywood will be the San Fernando Valley terminus of the Red Line subway and will develop without CRA help.

So, they ask, who needs the Los Angeles CRA and its sister agencies around the state?

Eliminate them and there would be $1-billion-plus in property tax revenues every year to help public schools, community colleges, county health services and road construction, all of them of more use to Californians than new high-rises and shopping centers.

Faced with an endless fiscal crisis, you’d think Gov. Pete Wilson and the Legislature would try to close down the redevelopment agencies. Why would they turn down more than $1 billion a year?

Because your lobbyists don’t want it.

The League of California Cities, which is financed by your tax dollars, has blocked even the mildest change in redevelopment law. So has the California Redevelopment Assn., also supported by public funds.

Why? Because redevelopment means campaign contributions to city council members. The land developers and attorneys involved in redevelopment deals are big donors. Wipe out redevelopment and you eliminate a big source of campaign dollars.

At this very moment, that dynamic is evident in Sacramento.

The League of Cities, the redevelopment association, redevelopment attorneys and several city officials are opposing a bill by Sen. Marian Bergeson (R-Newport Beach) that would impose mild state supervision on redevelopment agencies.

These powerful lobbying forces are expected to be on hand when the bill is heard by her committee today.

It’s enough to turn all of us into gadflies.