Taking From Locals, Giving to Developers

Sometimes a business climate can be too favorable. Consider the case of Indio.

Rather than let its main retailing center wither under the desert sun, the city decided back in 1987 to help it grow. The Indio Redevelopment Agency was to assemble adjoining land, using funds advanced by the Indio Fashion Mall from anticipated taxes. Gottschalk’s and J. C. Penney were to move in. More shopping, jobs and tax revenue seemed just over the horizon.

But the 23 acres needed for the mall to triple in size weren’t empty. They contained a neighborhood full of people, with shops and churches and even tradition.

Especially tradition. More than half the acreage in question was Noble’s Ranch, the only black neighborhood in town. Named for John Noble, a black from Oklahoma who arrived in 1922 to find that most of Indio was closed to him because of his color, Noble’s Ranch became home to a close-knit community of friends and family members.

To Indio city officials, this was a clear case of the common good taking precedence over the interests of a small number of residents--94 households--who could easily and equitably be moved.

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Indio’s annual take from sales taxes at an expanded mall was expected to triple, to nearly $1 million. The expansion would also mean 650 new jobs.

The city offered renters $5,000 plus moving expenses; the 14 homeowners would get new houses that cost more than their old ones. As for tradition, Noble’s Ranch had been changing for awhile anyway; it’s now half Latino. (Indio itself is mostly Latino and has a Latino mayor.)

To some Noble’s Ranch residents, though, this was a clear case of discrimination. Noble’s Ranch, they note, was born of racism and has its own wells because it was denied access to city water. It also had a hard time getting paved roads and other city services. Now Indio was relocating the city’s only black residents, many of them elderly and poor.

Two years ago, the NAACP Legal Defense Fund filed a federal class-action suit charging Indio with illegally discriminating against the residents of Noble’s Ranch. The two sides are now deep in talks that seem likely to result in a settlement, one that might keep some Noble’s Ranch residents together in a new subdivision.

So a court may never decide whether Indio discriminated. But that doesn’t much matter. What’s bad about this situation would be bad no matter who lived in Noble’s Ranch.

The immediate issue is--dare I say it?--private property. Indio has decided that a bigger mall would be a good thing, so it has effectively loaned its powers of condemnation to a developer.

The question is, why? The developer, mall owner David E. Miller (of Miller’s Outpost fame), is in this for the money, and rightly so, which is exactly why he should go out and buy Noble’s Ranch for himself.

He was advancing the funds anyway. So what does he need the city for? Property owners could sell or not sell, without the sword of eminent domain dangling threateningly over the house.

The Noble’s Ranch case echoes a larger private-property controversy that occurred in 1981, when General Motors said it would build a new auto plant in hard-pressed Detroit if the city would assemble and clear the site. The site happened to be a poor but tight-knit neighborhood called Poletown, many of whose elderly residents were aghast at the loss of their homes, churches and community.

Poletown was mostly white. The black administration of mostly black Detroit, desperate for economic development, bulldozed the neighborhood. GM builds luxury cars there now.

But there’s also a larger issue in Indio, where the case of Noble’s Ranch illustrates the way California’s tax and redevelopment laws practically force cities to choose big commercial projects over little residential neighborhoods.

Indio was acting in a hallowed California tradition. For years, local redevelopment agencies all over the state have helped big projects happen by buying out small landowners and conveying the assembled property to developers, often at a discount. Bunker Hill, in downtown Los Angeles, was built up this way.

But the original dubious purpose of redevelopment--slum clearance--has been eclipsed in California by the desperate need of local governments for cash.

“Redevelopment is no longer a tool of social improvement in California,” says William Fulton, publisher of California Planning and Development Report, a newsletter. “It’s a financial weapon that cities and counties use against each other.”

Since Proposition 13, local governments have few ways to raise revenue, but they do get a share of the sales taxes generated in town. So they do everything they can to lure high-volume retailers.

While housing becomes a liability, Price Clubs and auto malls are wooed. Says Fulton: “Cerritos Auto Square is entirely a creation of the Cerritos Redevelopment Agency.”

Thus, Indio is willing to sacrifice Noble’s Ranch, because city officials know that another giant mall is proposed for La Quinta, less than four miles away, and they can’t afford to lose the sales-tax revenue. Who can blame them?

Unfortunately for Indio, the recession interceded. After the Noble’s Ranch relocations had begun, Miller told city officials that he couldn’t go through with the project, according to city manager Fred Diaz, who says Indio is suing.

But the mall may expand anyway. Diaz says Miller has brought in another developer, and everyone is talking fairly cordially. Says Diaz: “What we want is the mall to happen.”