City Journal Summer 2014

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Summer 2014
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Steven Greenhut
Crony Capitalism Rebuked « Back to Story

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Mr. Greenhut,

I have to thank you for keeping a spotlight on these redevelopment agencies. I haven't seen anyone else cut through the self promoting PR of these agencies as well as you have done.

You have done great yeoman's work here, and I am anxiously finding all of your past articles to educate myself further.

Thank you!
As you know, the Governor tried to pass a SINGLE bill that would shut down Redevelopment Agencies. Other than Assemblymember Chris Norby, not one other Republican would vote for it.

The compromise was reached to appease Republicans as much as it did Developers and the Democrats (and Republicans) all who love Government handouts.

The only way AB1X-26 could pass was for the Governor to sign both it and AB1X-27. If he only signed 26 and vetoed 27, AB1X-26 would not have been enacted.

Call it Devine intervention or brilliance among Redevelopment opponents, but the lawyer for the Fire Fighters and Property rights argued that 26 and 27 were severable AFTER they passed and that 27 was unconstitutional based on Prop 22 - Ironically the CRA argued the same position on 27.
A number of cities have taken loans from their RDA's (which is illegal) to continue general fund spending despite revenue declines. It will be interesting to see how the cities explain and repay these debts.
This is good news. These redevelopment agencies were originally designed to clear and rebuild blighted, high-crime areas, but they morphed into special-interest agencies that provided subsidies for big box developers who would pay more sales & property taxes to local cities. It was all a scheme by cities to increase tax revenues, but it hurt small businesses and modest homeowners.
Developers of big projects (malls, Costcos, Wallmarts) who were cozy with small town city hall politicos, got their retail construction projects approved as "redevelopmen projects". Small businesses and modest homes were razed and their property given to big box retailers.
The city council of Irvine, Ca. got the former El Toro military base declared a "redevelopment zone" so that they could allow home builders to construct tracts of houses with high property tax rates. The El Toro base was never a slum or a blighted area!
Redevelopment was meant to clear slums and blighted areas, and was never meant to chase homeowners and small businesses out of their properties in order to sell it to larger retailers who paid more taxes.
The redevelopment programs have become a scam and it's time to end their subsidies.