The State : Riordan Quietly Kills the CRA, Thereby Starting a Jobs-vs.-Revitalization Debate

The long reign of the Community Redevelopment Agency ended this week--not with a bang, but with a brief reference on Page 4 of Mayor Richard Riordan’s budget message.

It was a surprising ending to one of the most dramatic chapters in the history of the city’s planning, and it reflects Riordan’s desire to shift the city’s redevelopment efforts from downtown real-estate projects to neighborhood housing and job creation.

But in re-inventing redevelopment, Riordan needs to keep his eye on the ball. It will be tempting for his Administration to use his proposed redevelopment agency to focus on large-scale “economic development” efforts, like keeping companies from leaving town. But redevelopment is ill-suited for this task, and if Riordan moves too far toward economic development, he may harm needy neighborhoods as much as the old CRA.

Riordan wants to kill old-fashioned redevelopment and harvest its organs for use by his streamlined city government. The CRA would be combined with the Housing Department and parts of two other agencies to form the Citywide Development Agency.

Riordan characterized the move as a budget-cutting measure, a business-style consolidation and a needed step toward a “focused, comprehensive strategy” for economic development. Sensitive to political controversy--the CRA still has many William Fulton is editor and publisher of the California Planning & Redevelopment Report, a monthly newsletter. strong supporters--he did not announce he was pulling the plug. Indeed, at a press briefing Thursday, William R. McCarley, Riordan’s chief of staff, insisted: “Contrary to expectations, under my shirt is not a T-shirt that says, ‘CRA, Go Away.’ ”

There was no need to be so cagey. The redevelopment of Downtown is over. A bad real-estate market and money problems have all but killed an ambitious redevelopment plan for Hollywood. Lingering distrust has blocked the CRA from pursuing the long-delayed task of assisting inner-city neighborhoods, especially in South-Central. Redevelopment is under attack in Sacramento. And the Legislature and City Council have recently raided its treasury to balance budgets. As one City Hall insider said of Riordan’s plan: “It’s a gracious way to declare victory and call the troops home from the old-style redevelopment wars.”

But Riordan’s announcement hardly marks the end of redevelopment in Los Angeles. The new agency would still receive more than $150 million a year in property taxes, which, under the state Constitution, must be used to stimulate real-estate development in blighted neighborhoods. The mayor just wants to provide more focus to the CRA’s far-flung efforts in community development.

No one doubts the need for more on-the-ground coordination among development bureaucrats. The question is whether Riordan and the City Council, which must approve the reorganization plan, have the vision and political courage to re-invent redevelopment by focusing on neighborhood needs.

The problem, ironically, is a potential lack of focus. More important, however, is the question of what Riordan means when he talks about economic development. Does he want his new agency to concentrate on citywide job growth, including the retention of big companies? Or does he hope to use it to stimulate small-scale, neighborhood-level economic growth? It may not be possible to do both at the same time, and given the city’s economic and political climate, the task of job creation may well overwhelm the task of inner-city revitalization.

The jobs-vs.-revitalization dilemma is not unprecedented. As redevelopment has become a target in Sacramento, redevelopment agencies have played down their urban-renewal efforts and tried to reposition themselves as engines of job growth.

In Los Angeles, CRA Administrator Edward J. Avila has spent the last two years working on a strategy of remaking the agency into an economic-development entity. With their business orientation, Riordan appointees have also focused on the economic-development potential of the new agency. With a large staff, it could do what the mayor’s own economic-development aides could not even contemplate doing.

Yet, the fact is that all redevelopment agencies are primarily designed under state law as real-estate development entities, because the state’s redevelopment law assumes that the key to revitalizing blighted neighborhoods is to build new infrastructure and new buildings. For all its faults--and it had many--the old CRA did have the virtue of focus. It declared areas “blighted” and then used broad powers--such as eminent domain and special financing mechanisms--to buy and sell property, subsidize developers and finance the construction.

The new Citywide Development Agency would inevitably operate as a real-estate agency as well, especially with the city housing’s production programs thrown in. But this task is not the same as the task of keeping Thrifty’s from moving to Oregon, and therein lies the risk.

Riordan’s aides insist that the twin goals of economic development and inner-city revitalization are complementary. And some propose decentralizing the agency out of Downtown.

Yet, there is no guarantee the new agency would be more neighborhood-oriented. Given the CRA’s historic bias toward large-scale, big-money projects, CRA holdovers might well gravitate toward big-time economic development tasks, such as bailing out big companies threatening to leave town. And the Riordan Administration may well see a political payoff in this approach.

There’s no question that Los Angeles has reached the point where it can no longer afford haphazard development--or a haphazard development bureaucracy. And there’s no question that the city must, for the first time in recent memory, focus on economic development.

But killing the CRA won’t solve anything unless Riordan and his aides learn the most important lesson that the ghost of the old agency has to teach: To succeed, redevelopment must focus not on big and glitzy deals, but on the small-scale, neighborhood-level development projects that can make a real difference in a struggling neighborhood.*