Urban Renewal

Invasion of the City Snatchers

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

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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.

"Redevelopment is a form of martial law and must be attacked as if you were a liberal judge thinking about this process. A liberal judge will not be swayed by private property arguments—you must show it affects the poor and minorities adversely, cuts them out of the process," explains Sutton. "If you attack it from the right, you get chewed up."

Further allegations in the lawsuit, added as dedicated volunteers have uncovered damaging records and witnesses, include fraud, conspiracy, a massive cover-up, and destroying or manipulating records and data—all to make sure that central Hollywood would be declared blighted and the redevelopment plan approved. In a particularly dramatic abuse, the CRA, which categorically denies all charges, allegedly altered its "physical inventory" data base—the list of every piece of property within the project area—so that large buildings, homes, and even a park would appear to be located in different parts of town, changing projected densities and traffic patterns. Looking at the evidence, both written records and sworn testimony, an observer can't help but be impressed by the sheer audacity of it all.

Doreet Rotman, a stylishly dressed blonde who proudly labels herself an "activist," owns the Snow White Cafe on Hollywood Boulevard next to the Hollywood Wax Museum. She's been in the coffeeshop business since coming to Hollywood from Romania in 1973. As a businessperson,.she's acutely aware of the changes in the area since the late '70s—crime increasing, businesses closing, vagrants wandering about.

"I couldn't figure out why suddenly everything was going down the drain," she says. When a customer told her in 1983 that the L.A. CRA was interested in Hollywood, "I got all excited. From now on everything will be beautiful. It was like the Messiah was coming to save Hollywood." To her, redevelopment meant the streets would be swept, there would be more and better housing for the poor, the homeless would be given shelter.

When politicians first started talking about redeveloping Hollywood, in the early '80s, Rotman attended meetings at Hollywood High where the CRA was supposed to gather community comment on its plans. Few other people showed up. The CRA said 20,000 announcements had been distributed and notices put in newspapers, but she found that none of her customers had heard or read anything about the meetings. She decided to run for the Project Area Committee (PAC) as a business representative, wondering whom she would run against, since no one knew anything about it. "I was so naive," she recalls.

A PAC is a publicly elected citizens committee mandated by state law to guide the direction of redevelopment in a project area from its earliest inception, through approval by the legislative body (city council or county board of supervisors), and for several years following. No mere advisory committee, it has a veto power comparable to a mayor's. A PAC can vote against adoption of a redevelopment project, and that veto can only be overridden by a two-thirds vote of the legislative body.

Moreover, a PAC is entitled to its own office, office staff, and attorney. The law is very specific as to the composition of a PAC; it is to be made up of residential tenants and owner occupants, businesspersons, and members of community organizations.

The PAC election, held in 1983, was a circus, with irate residents protesting that homeowners and tenants had not been told about the meeting or had learned at the last minute, too late to run for office. Of the almost 40,000 residents of Hollywood, only about 250 people turned out to vote, many from the business community. Rotman found herself facing 28 opponents in the race for the six business representative slots. Somehow, she won.

SHOT's lawsuit charges that the election was rigged. The CRA, it alleges, selectively mailed notices of the election to "a predetermined list of persons known to be generally favorable to the Project," imposed stricter requirements on plan opponents who wanted to run or vote in the election than on those who supported the project, allowed project supporters "to submit their qualification documents after the deadline," and miscounted ballots "in a manner that favored candidates…favorable to the Project." The CRA denies any attempt to bias the election.

Furthermore, although 55 percent of the project area is residential and all but 5–10 percent of the residents are renters, tenants were accorded only 4 of the 25 available positions. But three new business slots were created by adding the category "manufacturing/industrial/warehousing"—businesses that compose about 5 percent of the area but include such prominent plan supporters as A&M Records. Absentee landlords were allowed to. run in the same category as owner occupants rather than in the commercial group. All eight of the community organization seats (four appointed, four elected) went to individuals who were also officers or board members of the Chamber of Commerce—the very organization that brought the CRA to Hollywood and has backed its every move.

This bias toward business supporters of redevelopment was no accident. The entire election process had been directed by the L.A. CRA, which established the various categories and had kept a careful eye out for any potential sources of dissent. An April 4, 1983, memo details the CRA's concerns. After noting the legal requirement of "substantial tenant representation" on the PAC, the memo went on to say that "more likely than not, the objectives of tenants will be different from those of the commercial sector which may result in negotiation proceedings which, in turn, will lengthen the project approval process. Further, if the interests of tenants are perceived to be totally contrary to the interests of the commercial sector (or vice versa), strong opposition to the project may result. Consideration should be made to focus the project boundaries in the residential areas to such an extent that tenants are not threatened or considered a threat."

In other words, months before the election, the CRA staff was discussing ways to prevent a bunch of unruly tenant activists from being elected, lest they delay approval or stir up controversy. The same memo noted that small businesses "are thriving on [Hollywood's] present 'Carnival Side-show' environment. On the contrary, big business is hurting in this twilight zone environment.…While it would be ideal to secure representation on the PAC from both these commercial interests, this may prove difficult because of lack of definition between small and big." Hence the newly created "manufacturing/ industrial/warehousing" category, which assured additional big business representatives.

Cafe owner Rotman worked hard on the PAC and went to all the meetings, but it was apparent that the proceedings, like the election, were a sham. The L.A. CRA ran the show, with a staff person present at every meeting. The PAC was told repeatedly that its function was purely advisory, that the CRA board was the decision maker. When one PAC member asked if he could see a copy of the redevelopment law, the CRA copied some pages for him—but not those sections describing a PAC's veto power. Rotman learned about PACs being entitled to an office, office staff, and an attorney, but whenever she brought up the subject her colleagues refused to consider it.

Instead, all these functions were handled by the CRA. The agency rents several floors of office space in a beautifully restored bank building in downtown Los Angeles. The building is also the home of a private law firm, Kane, Ballmer, and Berkman, which handles the CRA's litigation to the tune of $2.5 million in billings a year. In the CRA's quiet offices, 405 full-time staff members shuffle papers, file records, and prepare reports and recommendations.

For the people in these offices, the mandate was clear, the actions of employees directed toward one goal: acceptance of the plan by the city council. To ensure this, the PAC had to appear to truly represent those living in the community. And there could be no dissent—everyone must appear enthusiastic about redevelopment.

Perhaps the biggest task of all was to prove that Hollywood was indeed blighted and needed redevelopment. A redevelopment agency cannot establish a project area simply to increase property values and capture the tax increment or to make sweetheart deals for developers—at least it's not supposed to. To justify redevelopment, "blight" must be so bad that private enterprise alone cannot effect a reversal.

In redevelopment circles, indicators of blight include not only obvious threats to health and safety (colonies of rats, stopped-up plumbing, and leaking roofs), but irregularly shaped lots, lack of public facilities and open space, depreciated property values, high turnover rate among tenants of both commercial or residential property, and so on. Much of this is a matter of taste—one person's quaint neighborhood is someone else's pure blight.

The difficulty of demonstrating blight is recognized even by agency personnel. In a memo from senior city planner Richard Bruckner to the consulting firm hired to do land-use studies, we are treated to an incredible admission. Bruckner writes: "Attached is a copy of the California Redevelopment Statutes which 'define' blight.

As you will note the definition is open to interpretation and for that reason I have attached a list of items which indicated blight from an economic perspective.…Many of these items require professional judgement and are not demonstrated on a strictly factual basis. We are looking for your opinion in these instances. Also I would ask that your approach defines blight as broadly as possible."

We have Dave Morgan, owner of a camera store, to thank for forcing the L.A. CRA to hand over the physical inventory of Hollywood—the database listing of every property in the area, with a notation of whether each is blighted. Morgan had himself sued the CRA (his case was later consolidated with the SHOT suit), so naturally he, too, was interested in obtaining records from the agency. It took nearly six months of requests to obtain a copy and several weeks to make a preliminary analysis. Going over the figures, he counted at least 256 "errors," but there are hundreds more.

The database is a series of computer printouts, about 300 pages long, based on raw data collected in late 1983 and early 1984 by teams of survey takers walking through Hollywood. According to a CRA memo, survey takers received a day of instruction and were then expected to describe each parcel, noting signs of blight.

The physical inventory was the foundation for all subsequent analyses required to win project approval, including, for example, the environmental impact report. But an analysis is only as good as the data on which it is based—and these data were skewed.

The Hollywood physical inventory is divided into eight subareas. Two of them form the main commercial core: Hollywood and Sunset boulevards. Here's where you find the famous Chinese and Egyptian theaters. Eastward, nearer the Hollywood Freeway in two other subareas, are big radio and TV studios on Sunset Boulevard. A famous landmark, Sunset-Vine Tower, is on the southeast corner of that intersection. Until recently it was headquarters of the Chamber of Commerce.

In what surely deserves an Oscar for special effects, the L.A. CRA began moving huge buildings around Hollywood. The Sunset-Vine Tower and its entire block were lifted into the air and dropped down into a residential subarea about six blocks away. Two TV studios were moved from Sunset into another residential subarea. Further east along Sunset, Builders Emporium, a large hardware/lumber store, was taken from its site in subarea 7 and relocated in subarea 6. Perhaps thinking that subarea 6 needed open space, a city park was moved there from subarea 3.

Attorney Sutton describes this magical manipulation in a court filing. "In the real world buildings don't move. In the physical inventory large buildings jump blocks away. Whole streets find themselves carted off to a new subarea. The apparent pattern is to transfer within the data base high density and traffic producing uses into low density residential neighborhoods."

Thus, observes Sutton, "The total of data in the inventory remains the same but the internal configuration changes. The traffic on the quiet side streets is generally not analyzed. By transferring traffic-generating land uses away from crowded traffic corridors, traffic impacts were artificially minimized." He pays special attention to the Sunset-Vine Tower, a 23-story building. When you look at the physical inventory for 6290 Sunset, the actual address, the tower isn't there. The physical characteristics of this building and its neighbors are found in the inventory sheets in the 6600 block of De Longpre, six blocks away in a residential subarea, near where the park used to be until it was moved to subarea 6. Other businesses in the 6200 block of Sunset were also moved and given De Longpre addresses (their names were retained), including that of Morgan Camera—incidentally it's not blighted.

The trick to figuring out this relocation flimflam is to follow the tax assessor's record number for each parcel. These remain constant no matter where a building and its environmental impact data are moved within the inventory. It's a painstaking task, one the CRA staff probably never expected anyone would undertake. And, indeed, no one but David Morgan did.

In his brief, Sutton writes: "The physical inventory was systematically jaded. The various consultants treated the CRA's physical inventory database as a 'given.' The fraud flowed through the professional consultants without their knowledge." The CRA calls Morgan's copy of the inventory "unintelligible"—even though obtained from the agency—and has tried to get the database excluded from the court record (it isn't "certified"). An attorney for the agency has attacked the inventory as "raw data" irrelevant to the case.

The physical inventory was never made part of the administrative record placed before the city council. Its use by consultants was also obscured in reports. Besides the danger of being "caught with a smoking data base" as one CRA opponent puts it, a list indicating what properties are "blighted" was hardly the sort of thing the L.A. CRA wanted handed around.

Scott Halper, a film student, had never heard of CRAs until just before hearings held in 1986. He had no interest in politics until he learned that the house where he lives with his parents, Norton and Dorothy Halper, could be taken through eminent domain. Looking for ways to fight back, he and his friend Brad Berlin, a graduate student in economics at UCLA, spent several weeks poring over law books. The two young men met Chris Sutton at a press conference and soon became known as "the Hardy Boys," amateur detectives digging up evidence of CRA malfeasance and camping out at Pat Morley's house, piecing together what they'd uncovered.

"To tell the truth," laughs Berlin, "I don't know what got ahold of me. I put most of the blame on Chris Sutton. I hold him personally responsible for what happened to my life. If he had been a less likable guy, this might never have happened."

It was the Hardy Boys who uncovered the memo warning that tenant activists might stir up a fuss on the PAC. Following up on Doreet Rotman's suspicions, Halper and Berlin were also the ones who confirmed that the CRA was falsifying the minutes of PAC meetings—and who found two whistleblowers willing to testify to that fact.

PAC minutes were prepared by CRA staff, and Rotman believed they did not accurately describe what was happening at the meetings. Also, PAC members didn't receive copies until shortly before the next meeting. Why did it take so long?

She became particularly concerned after the SHOT lawsuit was filed, when Norris Lineweaver—executive director of the Hollywood YMCA and newly elected PAC chairman—announced in a subcommittee meeting that the tape recordings of PAC meetings were to be erased. Shades of Watergate! If the agency-prepared minutes were in any way contrived or fraudulent, the only real record of PAC actions and CRA manueverings would be gone forever.

At an August 4, 1986, PAC meeting Rotman asked whether it was true that the tapes were to be erased. CRA staff member Diana Webb denied it. Anyone could listen at any time, she said, just by coming to the agency's offices. But a day or two after the meeting, Webb told project office secretary Brenda Hendricks to begin recording over the tapes. Hendricks, one of the whistleblowers who would later testify to the cover-up they had observed at the CRA, discreetly ignored the instructions. (Diana Webb did not return my phone calls.)

Even so, it wasn't easy to get to the tapes. On August 8, Berlin and Halper went with Scott's father, Norton, to the agency and asked Webb if they could hear the tapes. No, she told them, they couldn't. There was no time, not enough staff to monitor the listening session, and so on. No, they couldn't see the tapes in order to make an inventory, in fact they couldn't see them at all—but not to worry, they hadn't been destroyed.

The struggle to get their hands on the tapes went on for over a month. When they finally did obtain them, the tapes confirmed their suspicions—the minutes did not accurately reflect what was said at the meetings. All criticism of redevelopment, the agency, the way elections had been handled, etc., had been toned down or omitted. Whoever was writing the record of the Hollywood Project was doing a superb Orwellian history rewrite.

But in their many visits to the CRA while trying to get their hands on the tapes, Halper and Berlin did obtain copies of documents and other records. And best of all, they met the two whistleblowers—Brenda Hendricks and Marie Sotero. Sotero, a temporary secretary in the Hollywood Project Office, was typing up a draft of some minutes when Berlin and Rotman stopped by her desk. They saw that the minutes had been heavily edited, in different people's handwriting. Sotero explained what was going on.

It seems that Brenda Hendricks typed very thorough minutes, relying on the tape recordings of the meetings. Then CRA staffers worked over the minutes, deleting what was considered inappropriate, including statements that cast aspersions or doubts on the CRA or the PAC. The minutes went through half a dozen or more rewrites before they were sufficiently sanitized for mailing to PAC members.

Although it was Sotero who first blew the whistle with her description of the doctoring of the minutes, Hendricks has since corroborated it and provided much additional inside information. One account stands out as a vignette of bureaucratic callousness toward human suffering. After the announcements of a hearing scheduled for April 16, 1986, had been mailed, the CRA began getting phone calls from people frantic about the likelihood of eminent domain. Would their homes be taken?

Says Hendricks in her sworn declaration: "After the calls began coming in Diana Webb instructed me to tell the callers that eminent domain would not be used and they had nothing to worry about.…I can remember one telephone call when an elderly woman began weeping until I assured her eminent domain would not be used." She followed her instructions and was able to calm down many of the callers. But she knew that eminent domain was a real threat, and her conscience was not so calm. All this was done to guarantee adoption of the redevelopment plan. Nothing else mattered.

But was the plan needed? Could private enterprise rid Hollywood of its "blight"? Despite the L.A. CRA's efforts to create the opposite impression—so it could hand development over to subsidized interest groups rather than market forces—Hollywood is already changing.

When a redevelopment plan is considered, the county orders a Fiscal Review Committee to study the proposal. The committee is to assess how the plan would affect tax receipts and whether CRA action is really necessary, or whether private businesses and individuals acting alone can effect similar results.

In the case of Hollywood, the committee concluded the loss of tax revenues would be very serious. Moreover, private enterprise was working very nicely to turn things around—assessed valuation was rising at a fast rate, there was increased sales activity, and a number of large commercial projects were in the works. In fact, private, unsubsidized construction was continuing at such a pace in some parts of town—with houses being converted to apartments and industrial and commercial use developing—that the L.A. CRA had "downzoned" large areas.

"Defendants knew of imminence of massive new private investment into the project area," charges the lawsuit against the CRA. "Yet defendants rendered testimony and reports to create the false impression of 'private sector paralysis' as required by redevelopment law as a prerequisite to a finding of 'blight.'" In their eagerness to invent such paralysis where there was none, the CRA and its business buddies may have contributed to their own downfall.

As long as there have been redevelopment agencies, citizens have fought them—and usually lost. The people hurt by redevelopment are rarely wealthy, and many are extremely poor. They cannot afford litigation. They may also lack the skills necessary to create an effective opposition. Perhaps even more importantly—as law professors Sonya Bekoff Molho and Gideon Kanner wrote in a 1977 Pacific Law Journal article—they tend to be "hampered by an inability to believe that the government would encourage a venture designed to substitute luxury housing for their own homes."

Kanner, of Loyola University School of Law in Los Angeles, elaborates in a footnote: "In spite of glib popular disparagement of 'government bureaucrats' or 'politicians,' most citizens have an abiding belief that when the chips are down, they will receive fair treatment from their government. The realization that one has been misled by one's government is one that is slow to sink in, and this delayed process usually results in a lack of organized or effective opposition to the project until it is too late."

Even now, says Doreet Rotman, "It's hard for me to understand how a country like the U.S. can produce hard-working people, people supporting a family, putting bread on the table…that this state agency can actually drive them onto the street. For me up to now, this is something I cannot understand."

But there are other factors besides those flagged by Molho and Kanner. Redevelopment agencies have a special advantage in litigation, because a "presumption of administrative regularity" serves as a shield. It is assumed everything an agency does has been done properly and according to law: that reports placed before a city council are accurate, that "blight" has been carefully considered and documented, notifications have been sent, and so on. If you don't like the law, that's another matter, but the presumption is that what is done is done according to law. The suit against the L.A. CRA—and the evidence it has uncovered—hits this presumption of administrative regularity straight on.

For a group of citizens, most of modest means, to take on perhaps the most powerful CRA in the country is like a mouse defying a hungry hawk. But they have persisted, have sat through endless meetings and combed through hundreds of pages of documents, have found politically astute allies and sympathetic whistleblowers, have dug and dug and come up with evidence that could save their homes and businesses. Over the next few months, the courts must decide how this script will end.

But, as significant as the Hollywood case may be, it does not attack the fundamental problem created CRAs. By making it possible for politicians to grant favors—including other people's property—to a handful of powerful businesses, redevelopment law itself creates incentives for fraud. And even when the law is scrupulously followed, it protects only the organized and the politically well-connected, not the powerless. No wonder "development" is gaining such a bad reputation in Los Angeles and across the country.

Sarah E. Foster is a Los Angeles–based free-lance writer. This article is a project of the Reason Foundation Investigative Journalism Fund.