California Supreme Court Strikes Back Against Redevelopment Thugs (Updated With Sputtering, Fulminating and Slow Burns)


Pride, Ridley-Thomas style: a two-block stretch in the middle of L.A. has set vacant for 20 years.

California's Supreme Court has ruled that the state government can eliminate local redevelopment agencies. The court's ruling in California Redevelopment Association v. Matosantos nixes Gov. Jerry Brown's plan to claim the billions of dollars in redevelopment funds the redevelopment agencies (RDAs) control, but by a unanimous vote the court  agreed that Sacramento has the right to dissolve RDAs. 

I'm ready to kiss a nurse in Times Square over this news, but two things make me cautious. First, I note that San Diego city councilman Carl DeMaio, a former Reason Foundation fellow and generally pro-market politician, calls the ruling "the worst possible outcome." However, DeMaio's parade of horribles looks to me like a list of arguments in favor: 

Today's ruling…completely eliminates redevelopment agencies and undermines our ability to invest in economically distressed neighborhoods.  Today's decision may also impact the city's General Fund by more than $15 million a year – requiring additional cuts in our day-to-day budget. 

 This decision goes against the will of California voters who overwhelmingly passed Prop. 22 last year to protect redevelopment projects, and this decision will allow Sacramento to ransack important local funds in order to temporarily patch the massive budget deficit at the state. 

San Diego will lose jobs – and many of our most troubled San Diego neighborhoods will lose out on opportunities for revitalization.

I live in L.A., so when I hear that Sacramento is ransacking important local funds my general response is "at least now it will get wasted somewhere far away rather than being spent by people who are close enough to torment me on a regular basis. " As for the Prop. 22 issue: The court also ruled that the state government can't help itself to this money. Schwarzenegger-appointed chief justice Tani Cantil-Sakayue dissented on that part of the ruling

In fact, I'm worried that not allowing the state to take redevelopment funds may undermine the good news here. If these bastards still have money, they'll find a way to save their own parasitic hides. The RDAs have a long history of adapting to changed political environments – not least when they replaced the toxic phrase "urban renewal" with the politically correct "redevelopment." In a year we could end up with reconstituted RDAs featuring all the same old crooks. It's instructive to recall how the Community Redevelopment Agency of Los Angeles (CRA/LA) responded when Gov. Brown proposed eliminating it. From my April column on RDAs

True to its criminal nature, the CRA/LA has responded to Jerry Brown's proposal by breaking the law. After the governor's budget plan came out in mid-January, the agency called an emergency meeting, in violation of a state law that requires three days' public notice before a government agency holds a vote. (The meeting was called with less than 24 hours' notice, and as far as I can see, it was never announced on the agency's website.) Although a few local gadflies showed up to provide town hall theater, the board ended up voting to turn $884 million in development project funds (counting all assets and projects, that figure may end up topping $1 billion) over to the city, to be rolled over into a new redevelopment organization that would hire existing CRA staffers.

Meanwhile, I rejoice at the lamentations from some of the worst people in California. Board of Equalization member Betty T. Yee:

Unfortunately, this decision could eliminate a powerful tool for creating local jobs. Redevelopment has been successful at stimulating economic growth, revitalizing neighborhoods, and generating tax revenues. Despite isolated abuses, redevelopment, the largest economic development program in California, has proven more effective in creating local jobs and encouraging businesses to invest in local communities than tax breaks or other tools.

CRA/LA board member Madeline Janis

I'm disappointed. I personally thought there was an important compromise that was made in letting redevelopment agencies continue, but having some of the funds go toward dealing with the crisis in schools and public services.

Weep! Weep!! And weep again!!! Your tears are as sweet as wine to me! 

Regardless of the details for California, this decision is an important precedent for the whole country in the campaign to eliminate redevelopment once and for all.

Update: Orange County Assemblyman Chris Norby tells me the ruling "reaffirmed the obvious – that the state has the power over the agencies. These agencies were huge abusers – fiscal abusers and eminent domain abusers."

Norby, the only state Republican who has consistently supported the destruction of redevelopment agencies, notes that the second part of the ruling will not leave as much money on the table as I suggested. It merely prevents the state from having RDAs "voluntarily" cough up their funds this year in exchange for not being eliminated. The $1.7 billion Brown is seeking is still in play, and emergency maneuvers like the CRA/LA's hasty meeting described above will only apply to existing commitments, not to future property tax revenues – which, not to put too fine a point on it, are headed down anyway. "Redevelopment may come back," Norby says, "but where's the money gonna come from?"  

Update 2: More reactions show today's ruling is pleasing to the just and hateful to the wicked: 

Cerritos Mayor Carol Chen channels the Lord Humongous

The City of Cerritos is gravely disappointed by the California Supreme Court's decision which eliminates redevelopment. This traumatic decision will have a catastrophic, long-lasting financial impact on cities throughout the State of California.

The City pledges to make every possible effort to develop new legislation that will allow redevelopment to continue. The City is joining in the League of California Cities and the California Redevelopment Association's efforts to work with state legislators to develop legislation to revive redevelopment to protect local communities, job creation and our economy.

Mark Paul of the California Fix has a handy primer on how the RDAs got themselves into this fix

The Legislature had the constitutional authority to create redevelopment agencies and likewise has the authority to end what it created. Prop 22 did not change that. But what Prop 22 did change, the justices found, was the Legislature's power to shift redevelopment property tax dollars to higher priority uses. It therefore found that, under Prop 22, the Legislature no longer has the power to offer them a conditional lifeline.

"The irony of these circumstances concerning Proposition 22 should not be ignored — the very measure that was crafted to protect financing for new redevelopment projects has been broadly interpreted in a manner that effectively ends all financing for new redevelopment projects," Chief Justice Cantil-Sakauye wrote. "This cannot be a necessary result intended by the proponents of Proposition 22 concerning redevelopment."

Not the intended result, perhaps. But certainly the result they deserved.

Ventura County Star rounds up of local city managers and other luminaries: 

Bruce Feng, Camarillo's city manager…hopes — but doubts — the property tax money used to fund redevelopment activities makes its way to school districts.

"If it really did go there, it's not all negative," Feng said.

The California Alliance to Protect Private Property Rights applauded the ruling as a victory for taxpayers and property rights. Some, like the alliance, have criticized the agencies' use of eminent  domain.

"California taxpayers fund redevelopment to the tune of over $5 billion a year without any reliable evidence that they create new jobs," said Marko Mlikotin, the group's president, in a release. The group had filed a brief with the court regarding the case.

In Fillmore, City Manager Yvonne Quiring said so much money is involved something will have to be worked out.

"There aren't a lot of good choices for either the state or the cities," she said. "It's in everybody's interest to find a solution to this."

Laura Behjan, the assistant city manager in Simi Valley, said the decision represented a "significant taking by the state of local governments' authority."

In Ojai, City Manager Robert Clark said the situation is "all quite murky." Clark and others expect more lawsuits will be needed to sort out details.

More excellent news from San Diego County

Without redevelopment funding, a plan for a 9000-seat baseball stadium in Escondido to lure a minor league team appears doomed. City officials had tentatively earmarked $50 million in redevelopment funds to build a venue for a San Diego Padres farm team now playing in Tucson… 

 In San Diego, the court decision ends any thought of using redevelopment funds to build a downtown football stadium for the San Diego Chargers to replace Qualcomm Stadium and keep the team from moving somewhere, like Los Angeles.

Los Angeles Mayor Antonio Villaraigosa soldiers on

This year alone we have created more than 18,400 jobs through the Community Redevelopment Agency in Los Angeles. A proven economic development catalyst, these investments have transformed communities like North Hollywood and Bunker Hill with jobs and opportunity.

Today, the court has spoken. We all must acknowledge the difficult challenge before us to create jobs, world-class schools and safe communities, keys to the future of our Golden State.

Christina Walsh of Institute for Justice has yet more on the legal convolutions and the Institute for Justice's case against RDAs: 

California redevelopment agencies have been some of the worst abusers of eminent domain for decades, violating the private property rights of tens of thousands of home, business, church and farm owners.  The Institute for Justice has catalogued more than 200 abuses of eminent domain across California during the past ten years alone.  In California Scheming: What Every Californian Should Know About Eminent Domain Abuse, the Institute for Justice exposed the enormous amounts of taxpayer money used to fund these illegitimate land grabs.  In fiscal year 2005-2006 alone, redevelopment agencies' revenues were an astonishing $8.7 billion.  In other words, 12 percent of all property taxes in California that year were sent to these bureaucrats.

As part of the state's response to its fiscal emergency and to stop this drain on the state's resources, the legislature passed, and Governor Jerry Brown signed, two laws:  Assembly Bill 1X 26, which dissolves redevelopment agencies, and Assembly Bill 1X 27, which exempted agencies that agreed to make payments into funds benefiting the state's schools and special districts.  The California Redevelopment Association and the League of California Cities, among others, challenged both laws, arguing that they violated the California Constitution.

The court held that AB 1X 26, the law barring the agencies from engaging in new business and providing for their windup and dissolution, was "a proper exercise of the legislative power vested in the Legislature by the state Constitution."   The court concluded that the Legislature has both the power to create such agencies "and the corollary power to dissolve those same entities when the Legislature deems it necessary and proper."  In contrast, the court concluded that AB 1X 27, which allowed the agencies to continue to exist if they made certain payments, violated a provision of the California Constitution that prohibits the Legislature from requiring payments from redevelopment agencies to the state.

"This decision represents the worst of all worlds for California redevelopment agencies—and the best of all worlds for California property owners and renters," said Dana Berliner, a senior attorney with the Institute for Justice.  "The agencies managed to achieve a decision that upholds their dissolution while striking down a law that gave these agencies a way to stay in existence.  The agencies' arrogance, so often employed against property owners, finally proved their undoing." 

Final thoughts from me:

1. I never really expected Jerry Brown's plan to eliminate RDAs to pass, and when it did I cringed at the idea that Prop 22 – which I voted for according to the always-tie-their-hands principle – might be the legal mechanism through which RDAs escaped death. It came close to that, but the principle worked: You can never go wrong tying the government's hands.

2. This is a great example of the healthy effects of going broke. The only reason the Democrats united on getting rid of RDAs is that the teachers came out for it, and the teachers only came out for it because the fiscal crisis has them scrambling to get their paws on taxes that were going to RDAs. That's winning ugly (and it's why you won't hear anybody suggesting that the money no longer going to RDAs should be returned to the taxpayers), but it's still winning. 

3. I take back the reservations expressed above, both because I have a better grasp of the court's logic and because the reactions above make it clear: California Redevelopment Association v. Matosantos is a complete rout for RDAs, a great victory for the people of California and an encouraging sign for the rest of the country. We can end the tyranny of redevelopment agencies. 

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  1. Deck chairs rearranged.

    Ship still taking on water.

    1. Shut up, RC. Let Cavanaugh enjoy at least a few of those wine-sweet tears.

    2. But some of the assholes on this ship are getting tossed overboard.

  2. Warmongerer continues to warmonger:…..on-in-Iran

    1. Domestication, the control-freaks’ War on other species, leads to War, the control-freaks’ Domestication of our own species.

      Before domestication?

      “The current literature consistently reports that until the final stages of the Paleolithic Age?until just prior to the present 10,000-year era of domestication?there is no conclusive evidence that any tools or hunting weapons were used against humans at all.”

      ~John Zerzan
      The Origins of War…..ins-of-War

      Anybody advocating the agricultural city-State (civilization) is a warmonger, whether they understand it or not.

      1. Re: White Imbecile,

        Before domestication?

        Before domestication there were oaks growing on the backs of onagers… In the Sinai Peninsula.

        Also, giants roamed the Earth. There was a great flood. Some guy “knew” his mother.

        1. You just can’t fucking help feeding it, can you? You are contributing to the problem.

          1. Re: Rev. Blue Moon,

            What can I do? I’m a sucker for pseudo-intellectual comments coming from the White Imbecile, who would cry like a little girl after realizing that his beloved “original affluent society” is the surest way to arrive at painful starvation.

            1. Old Domesticated Poodle is city-Statist Domesticated.

              He’s not all that bright and just likes to yap yap yap.

              Old Domesticated Poodle’s daddy is third picture down in the following article:

              13 November 2006
              Wolves & Dogs
              by Jason Godesky

        2. Even the Sinai which is located to the Southeast and the Negev, East of the present state of Israel, bear evidence of past, perhaps abundant forests. The 1960 investigations of Sir William Flinders Petrie into mining operations in the Wadi Nash area of the western Sinai desert, believed to date from the third millennium, BC, yielded unmistakable clues:

          “(Petrie) found a bed of wood ashes 100 feet long, 50 feet wide and 18 inches deep, and also a slag dump from copper smelting, 6-8 feet deep, 500 feet long and 300 feet wide. It seems that the adjacent area, now desert, must have borne combustibles during the period when the mines were operating. Similarly, in the Negev, copper smelting kilns of a highly developed kind dating from 1000 BC have been found in the now quite desert-like Wadhi Araba.”

          Man and the Mediterranean Forest: A history of resource depletion. J. V. Thirgood. Academic Press. 1961. p.57.

    2. Maybe we can fly more drones into Iran that Iran will capture.

      Years of fighting only ill-equipped enemies like Iraq and Afghanistan (or Pakistan, who basically stands by while we do whatever we want) has made the U.S. overconfident. A war with Iran will be a living hell.

      I’m not even convinced we have the will to win it.

  3. Why will Sacramento eliminate the RDAs if it can’t have their scratch?

  4. Board of Equalization

    A bit on-the-nose, don’t you think? It’s like someone in CA government deliberately wanted to fuck with the Objectivists.

    1. Oddly, the Ayn Rand Institute is HQ’d in Irvine CA. Just about the worst state they could pick!

  5. I live in a redevelopment area, I’m glad about the ruling, but I’m not singing victory because I don’t know yet if or when the extra they tack onto my property taxes will get nixed. I’m not optimistic.

    1. You’re not paying extra. Redevelopment areas charge the same property tax as other areas. The difference is that more of the money goes to the Redev Agency, and less goes to the state. You’re property tax bill will stay the same.

      1. Property taxes are NOT “going to the state”.
        The state had to backfill the schools for the property taxes the schools lost to RDAs. The state won’t have to do as much backfilling now.

  6. You’re missing part of the story. The Court ruled on 2 bills — AB26 and AB27. AB26, which eliminates the agencies, is legal. When agencies are eliminated, all of their money goes to the state. AB27, which allowed the agencies to continue to exist if they paid part of their funds to the state, is illegal because it violates Prop 22, which forbids the state from raiding local funds. So, RDA’s are eliminated and all funds from RDA’s go to the state.

  7. The money that went to redevelopment was from local property taxes. That money will now go where all the property taxes from homes and businesses NOT in a redevelopment area go- local schools, colleges, city general funds and county and special districts (e.g. fire, hospital). However, there will be a transition period of many years where some of the money will go to pay off the enormous debt that the redevelopment agencies racked up.

    1. Why can’t the RDA’s be forced into liquidation bankruptcy?

      1. Can they be said to have any assets?

        1. In many cases, RDAs own land that they bought for current or future projects. They may have leases and other assets and investments that can be sold.

      2. It would be irresponsible not to pay back the bondholders. It would certainly also be difficult for government entities to sell bonds in the future.

    2. However, there will be a transition period of many years where some of the money will go to pay off the enormous debt that the redevelopment agencies racked up.
      politicians running the RDAs who help get California in this particular part of the mess.

  8. DeMaio was a Reason fellow? You guys should be a little more selective, he’s as odius and ambitious as a politican can be. I trust you didn’t let him keep the monocle.

  9. Redevelopment Thugs

    You know, when libertarians start calling everyone they disagree with a “thug,” the word will ultimately lose its meaning and impact.

    1. Excellent point. Here are some nouns that could be substituted for thugs: parasites, slavers, hooligans, marauders, fuckwads, dipshits, nabobs, nimrods, bandits, bullies, ruffians, hoods, goons, crooks, muthafuckas, cocksuckas, and rent-seekers.

      1. Also Rustlers, Cut Throats, Murderers, Bounty Hunters, Desperados, Mugs, Pugs, Nitwits, Halfwits, Dimwits, Vipers, Snipers, Con Men, Indian Agents, Mexican Bandits, Muggers,? Buggerers, Bushwhackers, Hornswogglers, Horse Thieves, Bull Dykes, Train Robbers, Bank Robbers, Ass Kickers, Shit Kickers & Methodists

        1. Dear God, not Methodists!!!

          1. Well, when you don’t have a coherent, consistent philosophical base, name-calling must suffice. Carry on.

            1. I need a ruling, here: Is this close enough to “For a magazine called Reason…” to work for the drinking game?

              1. Not close enough, but since when have we needed an excuse?

            2. Re: Just imbecile,

              when you don’t have a coherent, consistent philosophical base[…]

              Like starting a conversation with a lie, perhaps?

              Kettle, meet pot.

              1. Not close enough, but since when have we needed an excuse?

                Good point.

                Maybe we need to add “[Libertarians] don’t have a coherent, consistent philosophical base” to the drinking game, though. The TEAM morons seem to delight in using that one, oblivious to the irony involved.

                1. What on earth are you talking about? Of course the establishmentarian politicians of Teams RED and BLUE are coherent and consistent.

                  How fucking dare you talk that way about our betters?

    2. Re: Just Imbecile,

      when libertarians start calling everyone they disagree with a “thug,”

      No, only those that use force to obtain something that does not belong to them but to someone else. Civilized people call those that steal “thugs.”

      What would YOU call them, then?

      1. “[The Native Americans] didn’t have any rights to the land … Any white person who brought the element of civilization had the right to TAKE over this continent.” ~Ayn Rand, US Military Academy at West Point, March 6, 1974

        The Right. To TAKE.

        Thugs TAKE.

        1. Shut up, thug.

  10. Redevelopment Law allowed the following which should have been opposed by all:

    1. Eminent Domain for private, not public projects such as a luxury hotel or the Kodak theater where the Oscars are televised from.

    2. Issuing debt (borrowing) without voter approval.

    3. The siphoning off of taxpayer dollars to give gifts to private developers aka Corporate Welfare.

  11. The City of Cerritos is gravely disappointed by the California Supreme Court’s decision which eliminates redevelopment. This traumatic decision will have a catastrophic, long-lasting financial impact on cities throughout the State of California.

    Translation: We won’t be able to steal as before!


    Radley Balko disses Ron Paul on Facebook:

    One of Ron Paul’s biggest attributes is his sincerity. He doesn’t bullshit. Which is why this is so disappointing. He’s either lying, completely removed from reality, or really still believes (or at least doesn’t find offensive) everything in the vile newsletters that bear his name, save for “eight to ten sentences.” In which case he’s a bigot. These are the only three options. All of them are ugly.

    Radley is talking about this:


    Ron Paul on Thursday downplayed the fringe aspects of his old newsletters, saying on an Iowa radio program that the most offensive passages were probably only a small portion of the overall content.

    “There were many times I did not edit the entire letter and other things were put in,” he told a caller on the Jan Mickelson radio show. “I was not aware of the details until many years later. These were sentences that were put in, eight or 10 sentences. It wasn’t a reflection of my views at all. It got in the letter and I thought it was terrible.”

    So there you have it – Balko seems to agree with Talkingpoints Memo that Paul is “downplaying” the newsletters.

    1. This is just pure bullshit from Balko. Like I posted before, the Reason guys just opened the dragnet and now call the whole content of the newsletters (punctuation marks and all) “racist” or “vile” so as not to deal with the counterargument that the sentences are taken out of context.

      Paul can see the same commentary on the internet as anybody else, and can see also the emphasis being made on just a few sentences, by either the leftist media or the right. It would thus be normal for Paul to point out and talk about those few sentences that made everybody else rip their clothes and pull their hair in a show of false and phony outrage.

      What’s outrageous is the exaggeration and downright lying that Paul’s detractors are resorting to. So now ALL the newsletters are vile – ALL of them. Even the paper they were printed on was made out of human skin, it would seem.

      The worst are these false choices that Balko posits: Either Ron is lying, deluded or is a racist. Never mind the context, never mind the historical background surrounding those comments, never mind how the media AND Reason have replayed these few sentences over, and over, and over again ad nauseam. No, Paul is guilty of not accepting he’s some sort of sinner who must repent before the altar of Libertarianism as created in Balko’s mind.

      1. We aren’t going to bother with the ridiculous notion that the quotes are out of context. Their not you’re just in a state of denial and hair-trigger outrage. Such sensitivity from an entire movement is not a good sign for its strength of mind.

  13. I grew up in the City of San Bernardino. It was. Nice town, it had real jobs, Kaiser Steel and Santa Fe Railroad. My family was a generational Santa Fe family. My father passed away at age 34. He was a machinist, so if he had lived, I expect we would not have lived in a leaky home, I swear on rainy days there was more water inside. In 1959 RDA bought the homes and we renters were for Ed into home ownership a 730 sq ft ‘shotgun’ house. Not. Complaining it was dry inside a d mt oldest brother joined the Navy so us remaining three kids could fit. I slept with my mother until I was 18. The odd thing is my mother could afford the leaky house. The next odd thing is a Coors Distribution took our spot, then years later the RDA financed Arrowhead Credit Union ballpark. San Bernardino lost it’s solid job base, Kaiser Steel and Santa Fe Shops. The other jobs were lost to the so-called peace dividend -Norton, George and March AFB closed. While working on a Master’s during the late 1990’s I focused on RDA’s. I had a theory that in some way they contributed to SanBernardino’s decline. Listen 30 % of the tax base goes to RDA. This city had a chance to invest in it’s people, by providing core municipal services Taxpayers deserve a return I. Their investment for the commonwealth, not to enrich a few con artists. By failing to invest in it’s own people we see this city now second in poverty behind Detroit. Home ownership is down, most are on aid and renters. This city could have stayed nice, but folks left because the city was looted, a once premier library system gutted. Then came a tax to hire police and that never materialized. I live in a new city, created in 1978, this city made the entire city an RDA. Now we have a ruling, time to invest in core municipal services and let folks in the free market toil in their field. We citizens must toil in ours.

    Please excuse typos cannot seem to edit .

    1. I agree that redevelopment made the economy worse. Cities offered millions in incentives to get car dealerships and walMarts and big box stores because they wanted the sales tax. But that didn’t mean people bought more cars or crap from china. It just moved the businesses around. One city’s loss was another’s gain, all built at taxpayer’s expense. They wiped out a lot of small businesses in the process, and they overbuilt. In my town, they forced out a couple of successful small restaurants. They wanted name brand, chain store restaurants because they will pay higher rent and that incentivized even more high rent development. Now, many of the new restaurants are shuttered. Big chains close unprofitable businesses. Small, local businesses sometimes make it through a recession because the owners have built a reputation in the community. Redevelopment turned governments into business investors. In the process, it destroyed the social fabric of communities.

  14. If this post wasn’t so long you could have included the video of the guy in the plaid suit. He was very inspiring.

  15. I’m ready to kiss a nurse in Times Square over this news

    But would you kiss a Firecontrolman Second Class?

  16. In San Diego, the court decision ends any thought of using redevelopment funds to build a downtown football stadium for the San Diego Chargers to replace Qualcomm Stadium and keep the team from moving somewhere, like Los Angeles.

    San Diego isn’t any worse for wear after losing the Clippers, the city will probably be just fine without the Chargers once the team moves back to its original home.

    1. The Clippers are a bunch of thugs.

    2. Yeah… L.A. has proven to be great at retaining NFL teams.

  17. Dude, could you make this post any longer?

    You realize not all of us live in California, right?

  18. I agree that this court decision is a great win for people and California taxpayers. I consider myself a progressive, a liberal, someone who believe’s in government, and paying taxes for the common good. I opposed redevelopment because the taxes we were paying for schools, fire, safety services, local road repair, etc ended up financing car dealerships and malls in deals that were made behind closed doors. California redevelopment agencies currently owe about $20 billion in outstanding bonds. They rake in about $5-7 billion in diverted property tax every year. We can agree or disagree about whether or teacher or the guy who keeps your sewer unclogged deserves the salary or pension they are currently getting, but I hope that does not blind people to the notion that tax money should pay for services and not to finance projects built by already rich developers.

    1. Edit: we can agree or disagree about whether or not a teacher or the guy…..

      Edit: Believes, not believe’s

  19. Mr. McCuen,
    I would add to your list:
    1. Redevelopment was not compelled to use of the competitive bid process, RFP, request for proposal, to ensure public properties receive the highest price.
    2. The specific definition of public use such as schools, roads, libraries, rather than “public purpose” of possible increased sales tax when considering the use of eminent domain.
    3. Redevelopment turned our local governments into land assemblers for private campaign contributing developers.

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