Invasion of the City Snatchers

When city planners descended on Hollywood, they used every trick in the book to get their way...coming soon to a neighborhood near you

HOLLYWOOD—For the three million tourists who visit every year it's the glamour capital of the world, though admittedly a bit shabby. For 37,000 residents, many of them seniors or members of minorities, it's home. And for some shadowy figures who are still off-stage, it's an area ripe for land speculation and high-density development, subsidized by the taxpayers. Today in Hollywood a fast-paced scenario is being acted out, as dramatic as anything produced on the sound-stages of Paramount. Residents and small-business owners are squared off against the powerful Los Angeles Community Redevelopment Agency. It's a good guys/bad guys drama, a story of justice, intrigue, and politics. The script is still being written, the ending is uncertain, but the cameras are rolling.

On May 7, 1986, after a series of public hearings, the Los Angeles City Council voted overwhelmingly to approve a proposal presented by the Los Angeles Community Redevelopment Agency (L.A. CRA) that the very heart of Hollywood-roughly 1,100 acres-be declared "blighted" and designated a redevelopment "project area." Nearly a billion dollars diverted from local property taxes will go into the area over the next 30 years (plus an indefinite amount in federal and state grants); thousands of residents, many of them poor, will be forced to relocate; integrated neighborhoods will be destroyed, along with historical landmarks. This is all needed, according to the hype, to "restore the luster" to Hollywood-to replace the inexpensive apartments with high-cost condominiums and shiny office buildings, the colorful street people with yuppies, and the corner "minimalls" with giant shopping centers.

The redevelopment plan, which includes a provision giving the CRA eminent-domain power to condemn any property in the project area, had the support of the local councilman, Michael Woo, the Hollywood Chamber of Commerce, and important business interests-particularly in real estate and development. It was the Chamber that had invited the L.A. CRA to Hollywood in the first place and had raised $150,000 for the pilot study on which the council based its finding of blight.

Opposition came from people who actually live in Hollywood and from small-business owners-people who traditionally are never really consulted in these matters and who have the most to lose. The nearly unanimous vote was hardly a surprise considering that council members receive thousands of dollars in campaign contributions from the very people who had been pushing the plan. On May 9, Mayor Tom Bradley signed the ordinance finding Hollywood to be blighted and authorizing the redevelopment plan. Hollywood was delivered to the tender care of the L.A. CRA.

Pat Morley moved into her Hollywood duplex 30 years ago, when as a teenager she received a small inheritance and convinced her mother it was better to invest the money in real estate than to buy a car. Toward the end of March 1986, she received a certified letter from the CRA telling her about the upcoming hearings and that being in a project area means her property could be condemned at any time through eminent domain. She was stunned, outraged. How could anyone force her to sell her home to which she holds clear title?

Morley, an effervescent woman whose sole source of income is rent from the other half of the duplex and a small unit in the back of the house, was hardly comforted when CRA staff member Diana Webb assured her that redevelopment wouldn't reach her neighborhood for another 20 years. "I told her I would be around for more than 20 years and at that age would not want my home to be taken by eminent domain," Morley said in a sworn declaration. "It would be even worse than being taken now." To keep that from happening, she has drained her life savings to help pay for a lawsuit against the CRA and has turned her house into the nerve center of the agency's opposition.

Homeowner Virginia Charon, a down-to-earth retired waitress, never even received a letter. One of at least 100 people in the area who were not notified, she first heard about the hearing from her frightened neighbors. When she phoned L.A. CRA for information about eminent domain, they sent her a booklet on relocation. Reading it, she thought, 'This is just like Russia. Can they really do this?" The folks at the CRA did not tell her that survey takers had already looked at her house with its pretty garden and rated it "blighted." Morley and Charon learned quickly what redevelopment means. Although both had heard rumors about "revitalization," it never crossed their minds how it could disrupt their lives. They didn't know that communities all across the United States have CRAs and that the power they wield is awesome. For example:

  • Once the line has been drawn on a map designating a given area as blighted, all buildings-no matter when they were built, what condition they're in, or whether surveyors have designated them as blighted-are presumed blighted for the duration of the plan, which can be as long as 30 or 40 years, with extensions permitted. The properties are subject to condemnation by eminent domain at any time.
  • A redevelopment agency has complete control over who builds what and where within those boundaries. If you wish to put up a building on a piece of property you own, and the CRA sees a "higher and better" use for the land (often meaning another developer with more clout has different plans), your right to develop your property will be denied.
  • On the other hand, if you own a house, an apartment building, or a row of shops, and a developer thinks it's just the place for his condos or a shopping center, the CRA can condemn your property, pay you "fair market value"-the figure is determined by CRA-approved appraisers-and sell it to the developer. Will the agency make a profit? No, it will sell the property for a fraction of what it paid, as a subsidy to developers.

It is a scenario that is played and replayed across the country-the sequel to that horror show of the '50s and '60s, "Urban Renewal," which left huge stretches of American cities looking as if they had been subjected to nuclear attack. The termination of the Federal Urban Renewal program in 1974 did not mean that money ceased to flow from Washington-lesser sums are still handed out as "block grants." Nor did states repeal the laws permitting communities to establish redevelopment agencies authorized to condemn private property for private use within urban renewal projects-in the "public interest," of course.

Today, however, the show is locally produced and directed by community "movers and shakers": elected officials, members of the chambers of commerce, heads of major corporations-the kinds of people who brought the L.A. CRA to Hollywood. Seizures by eminent domain continue, land is still sold cheap to developers, neighborhoods continue to be leveled, and people are forced from their homes. In some states, including California, the situation is worse than ever, with cities redeveloping far more land today than when the feds directed the show and with even small and medium-sized communities creating CRAs.

This is made possible through a device called Tax Increment Financing (TIF). When a city sets up a redevelopment project area, the assessed value of property in the defined area is "frozen" for a specified length of time-30, 40 years, with an option to extend its life. As property values rise, any additional property tax revenue (the "increment") goes not to the city or county but to the CRA itself. These diverted taxes then pay for more redevelopment-condemning, purchasing, and clearing of land; subsidizing some building costs; and, in particular, paying off tax-exempt bonds and the interest on them. This self-perpetuating means of financing is so popular that at least 33 states have legislation authorizing it, and more are expected to jump on the bandwagon in the next few years.

The Hollywood story is one of many, but it may have a surprise ending. A small group of local residents and business owners has banded together with experienced political activists and a savvy young lawyer to fight the CRA. These people come from different walks of life and have their own visions of what Hollywood should be like, but they are agreed that redevelopment via the L.A. CRA is wrong. As longtime environmental activist and urban planner Sue Nelson sees it, "You shouldn't raze a city in order to deal with social problems."

Nelson and three other women founded an organization, Save Hollywood Our Town (SHOT), to challenge L.A. CRA and the city council in the courts. They were soon joined by Morley, Charon, and two eager young men whose sleuthing led Nelson to dub them "the Hardy boys."

To handle the litigation, SHOT hired Christopher Sutton, a 34-year-old attorney who had won a recent victory in a redevelopment case. He brings passion as well as expertise to the case. "My greatgrandfather lived in Lithuania, a Jew. Cossacks came through in the 1880s, tore down houses, burned people out," he says. "That's what redevelopment really is. Instead of for their religion, people are persecuted for their economic status, but it's the same process, and it's not fair."

Sutton's brief against the L.A. CRA, filed in early July 1986, raises issues that have apparently never been brought up in the 40-year history of redevelopment agencies. Rather than claim that Hollywood isn't really blighted or that using eminent domain on behalf of private developers is prohibited by the Constitution-an argument stamped into the ground by the courts decades ago-Sutton charged the CRA with failure to perform its "plain, clear and ministerial duties." It has not, the suit alleges, followed the laws designed to protect those who will be directly affected by the redevelopment process.

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