Eminent Domain

Cali Controller Announces Big Bust of Redevelopment Scams


On one coast the cops arrest 119 suspected organized criminals; on the other the state government announces a sweep of 18 redevelopment "scams." It's enough to make you believe in law and order.

He controls the horizontal. He controls the vertical.

California Controller John Chiang has announced an audit of redevelopment agencies (RDAs) around the state. In his announcement of the audit, Chiang says he's looking to figure out "whether RDAs are the engines of local economic and job growth or are simply scams providing windfalls to political cronies at the expense of public services."

As Kent Brockman put it: At the risk of editorializing, THEY'RE GUILTY! Chiang refers to the "anecdotal evidence" of the RDAs' terrible performance, and you can find some of those anecdotes here, here, here, here and here. Chiang again:

The 18 RDAs selected for the reviews represent urban, suburban and rural communities. They are geographically diverse and represent a mix of varying populations. The reviews will look at, among other things, how the RDAs define a "blighted" area, whether they are appropriately paying for low- and moderate-income housing as required by law, whether they are accurately "passing through" payments to schools within their community, and how much RDA officials, board members and employees are being compensated for their services.

Here's a list of the 18 targets—which includes the billion-dollar-disposing Community Redevelopment Agency of Los Angeles.

Meanwhile, Gov. Jerry Brown's plan to nix the RDAs from the state budget is causing a revolt in cities located, literally, from the mountains to the prairies to the oceans white with foam. City councils that have recently voted either to push forward redevelopment projects or oppose the governor's plan include Placerville, Fresno, Taft and San Diego. Fremont, San Jose and Los Angeles have gone further and tried to spirit away redevelopment funds before the state cuts them off.

Many RDA reactionaries are using the pseudo-reformist argument that Brown's plan will take money away from local communities and centralize it in Sacramento. In the Contra Costa Times, David Borenstein points out that local tyrants are just as wasteful as far-away tyrants:

While city officials claim the state is trying to raid their funds, it's actually the cities, using their redevelopment agencies, that have been siphoning billions of dollars from badly needed government services and spending the money on projects that often have little to do with cleaning up blight.

The redevelopment scam, which has turned into a windfall for developers, bond marketers, planning consultants and professional sports teams, has racked up $88 billion in public debt statewide—without voter approval. It should have been ended decades ago. Kudos to the governor for finally taking it on…

Communities like San Diego and Los Angeles have used the money to fund sports complexes, while Santa Clara is planning to do the same. In Hercules, millions of dollars of redevelopment funds went to consultants who have almost no construction to show for it, and to a company owned by the city manager's daughters that, among other things, provided mortgage loans for city employees and a member of the firm.

Indeed, an analysis released in September by a watchdog office of the state Senate found redevelopment agencies around the state that used their money primarily to pay salaries and administrative costs.

Across the Bay, the San Francisco Comical's Debra J. Saunders has a remarkably accurate observation about buildings funded by RDA money: They are "new, big and mostly empty."

Other redev hijinks: In one or more of the "here" links above I noted that the focus on the "new, big" part of the redevelopment equation almost always means years get wasted as government agencies and daydreaming developers plan massive mixed-use behemoths—in the manner of Rick Caruso's Grove—that are more elaborate than local demand can sustain. Read up on how mighty Caruso himself just swung a deal with the Glendale city council that gives two property owners 45 days to sell him their buildings near his Americana mall or face eminent domain condemnations. A councilwoman says Americana "has kind of become the 'it' place for the region." Has this person actually been to the mall?

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  1. Is the California Controller an elected or an appointed position?

    If it is the latter, I’ll bet 4 to 1 that he is fired before the report can be produced.

    If he should produce a report, I’ll bet 1000 to 1 against any significant recommendation being implemented and 10 to 1 that only small fry (eg: office clerks that put a lunch into the expenses, etc) ever get charged or disciplined.

  2. I don’t know. I don’t know enough about the structure of Cali politics, but this looks coordinated. I mean, a few months after an election, and right after Jerry Brown takes office and announces he wants to get rid of them, they magically get audited?

    So much easier to get rid of them if you can go to the citizens and the media with proof of criminality and waste.

    1. That was for Aresen. Squirrels? Incompetence? Both?

      1. Wasn’t Squirrel. Was Moose.

        1. Oh, Boris.

    2. “Conducting an audit” is easier than cancelling a program and you get to claim you have “done something” about the problem.

      1. Then there is that, too. Every time I think I’m being cynical enough, I’m reminded I’m not.

    3. Coordinated yes. But Remember Brown did nothing about Redevelopment scams the whole time he was AG. So don’t be surprised to see a coordinated whitewash.

    4. Coordinated yes. But Remember Brown did nothing about Redevelopment scams the whole time he was AG. So don’t be surprised to see a coordinated whitewash.

  3. Finally an asian that isn’t an embarassment to liberty.

    1. wait, no, no. Just read his wikipedia page.

  4. I’ve lived in Cali to long to believe that they will follow through with any of this. It’s just a lot of talk to distract from the real money pit of the state: PENSIONS.

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