Cash-Strapped Agencies Sitting on a Gold Mine

I know how financially strapped Los Angeles County could obtain a most welcome $76 million or more a year.

Another $55 million annually could be found for the city of Los Angeles. That’s more than half the amount of the property tax increase proposed to hire more cops.

And the Los Angeles Unified School District, contemplating a $247-million cut in teachers’ pay, would get about $32 million.

All this could happen if the city of Los Angeles closes down its Community Redevelopment Agency and allows the CRA’s property tax revenues to be used for more basic needs, such as health care, police and schools.

The figures are contained in a report by the staff of city Chief Legislative Analyst William R. McCarley. The report spelled out how much property taxes the CRA receives from the huge high-rises and other buildings in the city’s most successful redevelopment area, downtown L.A.

The city’s 1974 redevelopment plan permitted the CRA to take over large amounts of land in the then-decaying downtown. This land was sold to developers who built today’s high-rises.

The high-rises gave a tremendous boost to the property value of the downtown lots. Property taxes skyrocketed. But under the state redevelopment law, the additional revenue goes back to the redevelopment agency instead of to the county, the city, the school district and the community colleges. The CRA is supposed to use the funds for socially beneficial projects such as low-cost housing.

Judging from the number of homeless wandering in the shadow of the downtown high-rises, some of them short of tenants, the policy hasn’t been much of a success.

So why don’t the politicians just give up redevelopment? Because redevelopment is a sacred cow, backed by a powerful alliance of heavy-contributing land developers and politicians.

The alliance showed its power in the City Council on Tuesday during a debate on a another huge redevelopment project, this one designed to turn shabby old Hollywood into a booming center of business, of culture, and--in contrast to many of its current amusements--of good, clean fun.

A major developer, Melvin Simon, wants to build a 325-room hotel, office buildings, retail shops and museums in the area around Mann’s Chinese Theater. But City Administrative Officer Keith Comrie’s staff reported that the project, called Hollywood Promenade, is in trouble in these bad economic times. Simon’s own figures indicate that “the project will not break even during the first 10 years without a CRA subsidy,” according to the city fiscal experts.

Simon is asking for a CRA bailout of up to $48 million over the next 12 years. He’s in a better position than most to seek help from City Hall, having contributed $35,100 to the political campaigns of City Council members, Mayor Tom Bradley and City Atty. Jim Hahn since 1986.

Most of his money went to the leading proponent of the Simon bailout, Hollywood Councilman Michael Woo, recipient of $12,750 in Simon contributions. Simon contributed another $3,500 to CRA defender Richard Alatorre, who supported Woo in the debate. But the developer’s generosity even extended to the project’s major opponent, Zev Yaroslavsky, who received a $1,000 contribution in 1987.

The debate, itself, clearly laid out the issues in the redevelopment controversy, and they’re not simple.

Woo gave the old argument for redevelopment--it will “bring jobs and development into an area where it would not happen otherwise.” Yaroslavsky scoffed. Downtown redevelopment, he said, failed to create the large amounts of low-cost housing it promised, and there’s no reason to think that Hollywood will do better.

A decision on the project was deferred and debate will continue, probably into next year’s mayoral campaign. Woo has already announced his candidacy and Yaroslavsky may enter the race.

But let’s forget the politicians for a moment, and go back to the figures compiled by Chief Legislative Analyst McCarley’s staff.

I told you at the beginning of this column that the county would gain $76 million a year, the city $55 million and the school district $32 million annually if redevelopment were wiped out.

Looking ahead 18 years, the legislative analyst’s experts said that ever-rising downtown property values would increase county, city and school district revenues even more. By 2010, they said, the school district would be receiving almost $80 million a year from downtown L.A. property taxes. The county would get about $288 million annually and the city $136 million.

That’s a lot of money. Enough to justify abolishing the CRA, declaring victory in the war against slums and enjoying the fruits of the triumph.