How taxpayers may subsidize Disney

By Jerry Andrews
In the last few months California Assembly and Senate legislative hearings on Redevelopment issues have been held in Sacramento, San Diego and Los Angeles. There had been enough concerns expressed to our representatives that they felt some amount of public input was necessary. Questions were raised about use of eminent domain, definition of blight, whether vacant or agricultural land was being included in new project areas and what problems there were with existing laws. With the abuses that have gone on for years with Redevelopment, the legislature was forced to pass some new restrictions. This was AB1290 and it was not long before it, too, was being subverted.

The normal process for setting up a Redevelopment Project Area requires public hearings, a long certification process and, most importantly, some demonstration of need that can only be cured by Redevelopment under the Health and Safety Code. This is a condition that supposedly can not be corrected by private investment, but the result is that the taxpayers in the city will be taxed more to pay for this subsidy to the developers.

One of the ways that things can get out of control and excesses became institutionalized can be seen by looking at what happened after the Northridge earthquake. At that time the Redevelopment industry figured out a way to bypass all of the local citizens’ review process. They got the legislature to pass an emergency law that earthquake damaged property could be put into a project area by local government decree, complete with eminent domain built in. So even though the property owners could get a federal low interest rate loan, they were still subject to the discretions of the local government who could potentially take the property for other uses. However, in some cases the property was “under performing” and this was a way for the owner to escape rebuilding to new codes.

One case comes to mind which shows the most exploitive side of Redevelopment; the Anaheim baseball stadium. As you may remember, there was a large “A” sign over one end of the stadium. This sign fell down, which was the extent of the earthquake damage to the stadium. Anaheim took this opportunity to create a new Redevelopment Project Area containing not only the stadium and the parking lot, but increasing the area to 169 acres picking up many of the surrounding half-empty undamaged office buildings. Their stated intention was to remodel the existing stadium and to build a second stadium that would be used exclusively for football (hopefully they’ll find a team for it), also to add in or create a new entertainment complex. All to be subsidized by the taxpayer because the property tax increment dollars lost to the city’s general fund for police and fire funding and dollars lost to the schools for education all have to be made up with other new taxes. This was clearly NOT the intent of the earthquake legislation.

This project is planned to be a joint effort with Disneyland. And somehow, I just don’t think the Disney operation needs a taxpayer subsidy for anything.

End Article as printed January 12, 1996