City Journal Spring 2014

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Spring 2014
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Steven Greenhut
Proving the Redevelopment Rule « Back to Story

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"To the contrary, any car dealer incentives were related to sales tax above a very high minimum for a new truck operation addition to an existing dealership. The infrastructure improvements aided the whole area around the retail center and now provide about 50% of our current sales tax revenue. Not a bad investment return provided by a legitimate tool. "

I am confused. Are you an investor, businessman, or financier?

No. You are an elected official. If you want to cut deals, go into business.

If these elected officials never offered "incentives" to these businesses, then the businesses would pay the same tax rate as everyone else does, and they would simply located wherever they thought was the best place for business and not for tax reasons.

Seriously, when city officials sound like real estate guys who are "making revenue" off an "investment" I think we have a problem. Your job is not to drum up business but to provide city services. Let business mind itself.
Another excellent article on the abuses and slick talk utilized by cities when attempting to pull the wool over the eyes of their citizens.

Tessitor and the other hundreds of city officials who repeatedly refer to redevelopment as a 'tool' need to get a hard hat for the steel beams of truth that are raining down on them.

By diverting property tax dollars to the Redevelopment Agency local government loses general fund and school money, and the county loses funds for roads, hospitals, parks and other services. Then Tessitor and his cronies are going to come crying for more tax money from us.

The colored concrete and new light posts in the so-called redeveloped areas better look good for 45 years since that's how long it takes to pay off the bond debt.

Redevelopment is a racket, the vampire that never dies, and it sucks the life out of an area. Did you know that 'too many local businesses' qualify as blight? I was elected to a Project Area Committee for an 1,100 acre redevelopment project and saw up close what lengths the city went to in order to manipulate the data and call its entire center blighted. And this was after 30 years of 'redevelopment.'

We sued (Tokerud v City of Santa Rosa) but lost in Superior and Appellate court, with the final decision in 2009. Our suit delayed the city's plan to give $30 million to the mall for a parking garage. Now that the economy has collapsed the project has gone dormant, but they still have the power of eminent domain for 7 more years.

It's people like Tessitor, with the full city attorney's office behind him, who do the people of his town a disservice. He thinks if he just plays games with his story that we'll be fooled by his 'tool chest,' but we see through it. Ultimately those property taxes will be missed when the citizens need services.

Kill Redevelopment now. Get that extra vote in the Legislature and drive a stake through its heart.

Rosa Koire, ASA
Executive Director
Post Sustainability Institute
The best part about internet articles and magazines is that one has an opportunity to set the record straight and clarify positions. That is what I intend to do.

Steven Greenhut points out that I am a conservative Republican; Mr. Geenhut professes to be a libertarian. I disagree with the libertarian position that drugs should be legalized and that any government involvement in our society is bad. My point is that reasonable people can disagree on policies and we do disagree on the value of redevelopment.

Glendora did not enter into the lawsuit with LA County to acquire eminent domain powers; it was to extend the life of the existing RDA's without any changes.

He says the California Redevelopment Association's statistics are "false"; then quotes the "non-partisan" state agency position as if it were gospel, saying that construction jobs would have been created anyway. Just like Obama's unprovable assertion that the economy would have been worse if the "stimulus" had not occurred. How do you prove the negative.

Finally, he claims that as part of the RDA, the City of Glendora provided incentives to car dealers and provided infrastructure to a "Big Box" development presumably to entice them to come to Glendora.

To the contrary, any car dealer incentives were related to sales tax above a very high minimum for a new truck operation addition to an existing dealership. The infrastructure improvements aided the whole area around the retail center and now provide about 50% of our current sales tax revenue. Not a bad investment return provided by a legitimate tool.

Some cities, to throw Mr. Greenhut a bone, may have abused the system. Those are exceptions, I believe, and do not justify removing a healthy economic driver from responsible communities under the guise of cutting the deficit

It's too bad Mr. Greenhut has never run a business, as then he would understand why cities need redevolment agencies. It is the only way that cities can tap any significant part of the property tax stream to help fund needed city infrastructure - simply a business decision.

If you want to get rid of the agencies, then give the cities all the property tax. Fund the schools and counties out of the sales taxes and income taxes. Then cities can make the business decisions without having to use redevelopment agencies.
Hi Seven. Thanks for the insight on an important issue I have come to expect from you. Russell
Many cities have seem run down downtowns revitalized and older housing stock saved yet there have been abuses especially in attracting big box stores from adjacent cities or miss use of CRA funds in building public buildings or paying too large part of City Manager's or senior staff salaries. Never the less that is no reason to close down CRA's when further reform s might be more appropriate.

A handful of abuses, tied to the threat and to spend the money quick before it disappears, such as support utilities in violation of the Gann Initiative, never the less should be stopped in their tracts

Governor Moonbeam has his head stuck in the sand of time and has failed to lead. He might better look at a major restructuring of California's revenue mix using Arnold's Commission on the 21st century as a starting point and ignor the temptation to grab CRA and other local funds. He needs to address seriously State government reorganizational issues ranging from Prisons to the National Guard cutting away unneeded bureaucracy and fat. He needs to take seriously the issue of Pension and Education reform and stop his catering to the California Teachers Association and the Prison Guards.

California's budget mess cannot be solved by raiding CRA funds or reliance on a current Dot.com like revenue bubble or even the the extension of temporary taxes. We need to create jobs first and formost.