Bell City Manager Robert Rizzo worked the system to get himself an annual paycheck of nearly $800,000. He lent $300,000 in city funds to a local car dealership that later went defunct.
That might seem like a lot of money. But half a century ago, some very astute men in another L.A. suburb — the City of Industry — helped invent a system that uses local governments to siphon away billions of our tax dollars. Much of it ends up in private hands. And it’s perfectly legal.
It’s called redevelopment.
“We’re talking $4 billion to $6 billion each year that could be used to fund police officers, firefighters and community colleges,” said Victor Valle, chairman of the ethnic studies department at Cal Poly San Luis Obispo and author of a new book that explores the seamy underside of California small-town government.
Redevelopment funds are state tax dollars allocated to city governments. They’re supposed to be used to fight urban blight — and sometimes they are. But just as often, Valle argues, they’re spent on subsidies to the developers of strip malls, privately owned parking lots, warehouses and sports stadiums.
In Industry, a very few men got rich by selling property to the city and putting “redevelopment” projects on these vacant pastures that had never been developed in the first place.
It wasn’t stealing. But it was public money — our money — spent at the service of the few. And those monies are still flowing to developers up and down the state. These business concerns, in turn, feed the political system with their big campaign contributions.
California redevelopment agencies have their origins in a 1950s state law and in the political culture that dominated California during its suburban boom. Valle’s new book, “City of Industry: Genealogies of Power in Southern California,” describes the birth of this culture in Industry.
Founded in 1957, the City of Industry has never had more than 800 residents. But in the late 20th century it received hundreds of millions of dollars in state tax dollars redirected for redevelopment.
By the 1970s, Valle writes, “Industry was no longer just a city; it was now a huge redevelopment mill, the largest in California, perhaps the nation.” A few men and their families got rich.
Valle’s account of Industry’s founding and its evolution into a kind of playground for developers echoes the modern-day account of the goings-on in Bell, where Rizzo and company won themselves the power to raise their salaries in a tainted election in which fewer than 400 people voted.
Industry was the 1950s brainchild of a small group of local businessmen and the Southern Pacific railroad. The idea was to create a city with all the powers granted to local government in California — including the power to acquire and condemn property — but without the costs of schools, teachers or police officers.
But Industry didn’t have enough residents to be incorporated. So the prospective city’s leaders went in search of bodies.
As Valle tells it, Industry’s leaders redrew the proposed city’s boundaries to include the 169 senile and mentally challenged patients of the El Encanto Sanitarium and the facility’s 31 employees. The population thus surpassed the required 600 residents, and the City of Industry was born.
In the years that followed, Industry spent millions in redevelopment funds purchasing land and subsidizing projects owned by city leaders and their relatives and business partners. Chief among these leaders was James M. Stafford, a local businessman.
For years Stafford ran Industry with an eye on every detail: Among other things, he was said to script City Council meetings. He got rich, but wanted more. In 1984, he was indicted and convicted in a kickback and bid-rigging scheme and spent three years in federal prison.
The now-shamed leaders of Bell, in other words, didn’t invent the mentality that thinks of city government as a cash register. And compared to some of their predecessors, they were rank amateurs.
“They wanted to play with the big boys, but they were stopped before they really got started,” said Valle, a former reporter for The Times.
Sordid money scandals happen in Los Angeles County suburbs for a reason.
“It’s unique to the culture here, where everything is so spread out, with so many small cities, little media and no oversight body,” said Bill Boyarsky, a retired Times editor who now writes a column for the website LAObserved. “We’ve had cities that have been totally captured by land developers and their allies.”
Obviously, there are many selfless, principled people working in small-town government in California. But who’s there to monitor the vast flows of cash, to make sure government money is spent appropriately? In many cities, there is no one such watchdog.
Valle believes that our tax dollars are siphoned away because many Californians believe that businessmen and executives know best. He recalls Rizzo’s answer when confronted with his huge salary: “I could go into private business and make that kind of money.”
“There’s the assumption that if you want a model of efficiency, you should look to the corporate world,” Valle said. “They say that if you want professional expertise, you have to pay for it.”
But when the corporate mindset enters local government, you sometimes get people who treat City Hall like a piggy bank, Valle said:
“It’s the logic of Wall Street bleeding into Main Street. People have lost their way of understanding the difference between the public and the private.”
What’s good for business isn’t necessarily good for the rest of us. For that reason, Valle suggests you vote against Proposition 22, which is on the ballot this November. It’s designed to protect redevelopment funds and would allow city redevelopment agencies to escape their sunset clauses and extend their lives in perpetuity.
I’d take a good look into Proposition 22 if I were you. Because you might be voting to allow a big developer to continue picking your pocket.