The Los Angeles Community Redevelopment Agency (CRA) stands out as the most successful exploiter of the Redevelopment portion of the Health & Safety Code. The financial muscle they learned to flex was a model for others. They quickly moved out of the cycle of condemning property and giving it to developers. Now they just use eminent domain, keep title and lease the land to developers.
The Los Angeles CRA has become one of the largest commercial landlords in town. The income from property taxes alone has climbed to $150 million a year without talking about the building rental income and the ground leasing income. Redevelopment by the Los Angeles CRA has become a virtual self-contained money machine.
By all reports, the original drafters of the legislation were not trying to promote this current type of big commercial development, but rather were trying to help with neighborhood business renewal and low income housing replacement. This original intent has not been forgotten by the new Los Angeles mayor, Richard Riordan. He is trying to change the very structure of the CRA and redirect its efforts away from downtown and out into the neighborhoods.
While this will require the Los Angeles City Council approval, the first part of the plan has been effectively implemented by appointing new commissioners to the various boards and agencies who are supportive of his ideas, replacing previous commissioners who were beholden to the bureaucracy. It appears the only way to break the stranglehold of the Los Angeles CRA was to break up the agency, adding parts to the old Housing Department and forming the new Citywide Development Agency which will focus on inner city neighborhood economic development, especially in the South-Central area.
It is important to see the changing face of Redevelopment. The big expensive downtown projects are in trouble everywhere else. For example, Long Beach needs the disputed naval hospital site for retail to bail out the Ocean Blvd. Redevelopment Area bond shortfall. Paramount needs the new Wal-Mart store to help balance their bond debt. Even Cerritos, with sales taxes down at the Mall and below projections at the Auto Center, is looking at their new Wal-Mart and satellite stores to help balance the $2 million annual deficit at the Performing Arts Center. Hopefully all these lessons other cities are having will not go unnoticed by Downey.
During these tight economic times Redevelopment and its traditional lining of developer and financier pockets is under attack. Mayor Riordan’s bold move may turn out to be the most significant of his tenure. His desire to rebuild South-Central is concurrent with our need to help south Downey. With all the new HUD money and the set-aside funds now becoming available, our city can help improve the housing stock here and offer incentives for business improvement along Imperial Highway. There are even streets on designated school routes that do not have sidewalks for the safety of our children. The focus should be on helping local residents as the law intended rather than out-of-town developers.