New Woes for a Woe-Filled CRA

California’s community redevelopment agencies, or CRAs, are powerful state agencies under local government control that were established more than 50 years ago to reverse urban blight. It is control, or the lack thereof, that ought to be of primary concern to Los Angeles taxpayers and the officials charged with overseeing agency actions here.

The Los Angeles CRA’s powers are both immense and controversial. It has the right of eminent domain, which means it can seize properties to create major new developments, and it is funded by local property tax increments. The local CRA’s problems are well known. It’s an agency in disarray, with huge debt and too many development projects for a staff that has shrunk from 350 to about 200.

Now, the possibility of criminal activity can be thrown into an already awful and unwieldy mix. Following Times disclosures that interim CRA Administrator Jerry Scharlin had hired private investigators to monitor his own agency when he took over 15 months ago, City Controller Rick Tuttle has given the county district attorney information from an audit of the CRA and from the private investigators.

Tuttle said the information “suggests the possibility of questionable or unlawful activity” within the agency. He has taken the proper step in referring the matter to prosecutors. The City Council, which has long eyed the troubled CRA as a takeover target, also is acting properly in taking an interest.

There are plenty of actions that need explaining. The Times disclosed two months ago that the CRA in 1998 paid a politically influential landowner $1.46 million for a Hollywood parking lot that a city appraiser said was worth just $795,000. The agency also went against its own policies in awarding more than $550,000 worth of business to two private consultants without competitive bidding.

Equally controversial at this point is Scharlin. The CRA’s interim chief claims that he informed members of the mayor-appointed CRA board of commissioners about the private investigation, but CRA board President Peggy Moore told City Council members Wednesday that she was told only after the firm had been hired. There are also questions as to whether employees were improperly monitored.

Some of the purchases involve politically well-connected landowners and so-called “goodwill payments,” normally used only to compensate a seller for intangible value attached to a successful and ongoing business. In the city controller’s audit, no such goodwill value could be found.

All this has led some members of the City Council, such as Mark Ridley-Thomas, to again call for an outright takeover of the CRA. The council would seem to have enough to do without running the CRA; we’ve supported the idea that the mayor ought to have primary oversight of citywide redevelopment.

The questions being raised about the CRA and Scharlin are alarming. Mayor Richard Riordan’s administration now has to make a case for why the CRA would be worse off under the council’s hand. Riordan, throughout his tenure, has called for accountability. It’s time to apply that to the CRA.