Richard Rider, Mike Aguirre, Walter Spath III
  • Richard Rider, Mike Aguirre, Walter Spath III
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"The good news is the bad news — that the state is desperate for money,” says Richard Rider. If the state’s books were in good shape, the corporate welfare lobby would probably succeed in getting the legislature to come up with something that would reverse or soften the California Supreme Court’s late-December decision to abolish redevelopment agencies, he says.

“The special interest groups have the money. A few years ago they would have been successful,” says Rider, chairman of San Diego Tax Fighters. There will probably be a lengthy, contentious legal donnybrook, but the pro-redevelopment forces may lack the horses.

The state’s high court went along with Governor Jerry Brown and the legislature’s plan to abolish redevelopment agencies, then stomped on a compromise measure that would have permitted the agencies to stay in business but kick back some loot to the schools and counties that have been fleeced for years.

From a legal perspective, the court hit the nail on the head, says San Diego attorney Walter Spath III. “The law was pretty clear-cut,” he says.

About 400 state redevelopment agencies are supposed to shut down February 1 but are battling for an extension. Inevitably, there will be intense lobbying for legislation to overturn the court — perhaps by the initiative process.

“If the California Teachers Association and the broader education lobby are willing to support a compromise, something may emerge,” says W. Erik Bruvold, president of the National University System Institute for Policy Research. “If the education lobby opposes it, I think redevelopment is dead in California.”

Many will dance on that grave. Redevelopment started after World War II as a way to lift up blighted, poverty-stricken neighborhoods. But the concept was kidnapped by the corporate welfare crowd: pro sports team owners, auto dealers, retailers, hoteliers, and multifarious other businesses used redevelopment bucks to bolster their own bottom lines. Only 20 percent of the funds are supposed to go to affordable housing, and there are questions whether the resulting homes are really affordable; that 20 percent threshold may be misleading.

“The list of questionable developments is sad and sordid,” says Bruvold. The big, subsidized developers utilized and abused eminent domain, bidless contracts, and so-called tax increment financing (use of future tax gains to finance current projects) to build reverse–Robin Hood castles enriching the affluent at the expense of taxpayers and schools.

The concept of “blight” became meaningless: “The way the law works, it’s blighted because they say it’s blighted,” says Spath. Citizens cocked an eyebrow at egregious abuses: Coronado and guard-gated Indian Wells in the Coachella Valley having purportedly blighted redevelopment areas, for example.

Redevelopment boosters are now weeping that economies will stagnate and jobs will be lost. Nonsense. Redevelopment never created growth or jobs; it just redistributed them. In February of last year, the nonpartisan California Legislative Analyst’s Office produced a report noting, “While redevelopment leads to economic development within project areas, there is no reliable evidence that it attracts businesses to the state or increases overall regional economic development.” Similarly, there is little evidence that redevelopment increases regional jobs or raises property values. The prosperity resulting from one project area is the loss to another.

“Redevelopment has been a cash cow for developers — it should be called the ‘developers’ income enhancement fund,’” says Mike Aguirre, former city attorney. He, too, believes that attempts to sway legislators to find a way around the court’s decision will fail. Aguirre sees the battle as one between government employees who want their pensions preserved and the redevelopment lobby. “The redevelopment people have to build a coalition, and public unions know [the money] comes out of their pensions…both Democrats and Republicans are united against redevelopment.”

There is much truth to that. The supreme court that knocked down redevelopment almost unanimously has only one member who was appointed by a Democratic governor. Through the years, Republicans, Democrats, and Libertarians have been complaining loudly about redevelopment abuses.

Says Bruce Henderson, former councilmember, “There is no [significant] constituency for re-creating redevelopment. The only constituencies having any voice would be contractors, sports team owners, [construction] labor unions, hotel owners.” They will go to Sacramento and say that redevelopment “increases the size of the pie, but nobody says that anymore except people who say downtown stadiums create economic development,” and that has been thoroughly disproven.

However, does the broad public understand that redevelopment is a scam benefitting plutocrats? Does it understand that subsidies to big businesses come out of small businesses’ and taxpayers’ hides? And subsidies for pro sports stadiums guarantee that infrastructure will continue being neglected?

The problem will be the media. They make money from pro sports, shopping centers, big-box retailers, auto dealers, theaters, ad nauseam. Editorially, most oppose subsidies to the needy, but they all favor subsidies that boost their own fortunes. So the news about redevelopment will be slanted.

A classic example of this media disingenuousness arose in San Diego in 1998. A grand jury report sharply criticized the Padres ballpark deal. A local judge sat on the study for three days. The grand jury foreman finally got the study released the day before the election. The Union-Tribune eviscerated the story and buried it. On Election Day, the public was generally unaware of the grand jury’s revealing study.

The current U-T management has already said it wants positive coverage of a possible Chargers stadium and cheerleading for local business. ’Nuf said. “Statewide, the media will be in favor of the special interests,” says Rider, with the exception of Sacramento, where the media target a government-dominated market.

But even with a public deliberately misinformed by self-aggrandizing mainstream media, redevelopment may get what it deserves: the gallows.

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Comments

Brian_T_Peterson_DVM Jan. 18, 2012 @ 9:10 a.m.

The problem for the lobbyists who want to bring back redevelopment will be the Governor. Dan Walters in today’s Sac Bee quotes Darrel Steinberg: “The governor appears uninterested in re-creating anything related to redevelopment.” Walters continues, “And Brown, after all, has the final say on what, if anything, will be done to keep redevelopment alive.” http://www.sacbee.com/2012/01/18/4195486/dan-walters-california-redevelopment.html#storylink=cpy

And if, as Mike Aguirre says, “both Democrats and Republicans are united against redevelopment,” that’s a switch. It was the Republican caucus in the Legislature who stood fast against Brown and for redevelopment. Their argument: They did not want to give Brown the political victory. Fortunately, there were a handful of Republicans who had a moral compass, who voted to abolish redevelopment agencies.

By the way, the local Republicans’ lack of a moral compass on this is why I re-registered “non-partisan.”

Also, check out www.GrantvilleActionGroup.com for more redevelopment skepticism.

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Don Bauder Jan. 18, 2012 @ 11:20 a.m.

Obviously, I am hoping that Brown stands firm and the legislature doesn't pull the rug out from under him. The Republican caucus -- representing business interests -- were for redevelopment because, after all, it has been lining the pockets of those who line the Republican politicians' pockets. But a lot of conservatives -- TRUE conservatives -- and liberals have opposed redevelopment abuses for years. In my judgment, anyone who is for redevelopment as it has been practiced for decades -- the money going to the superrich, not the poor as originally intended -- is NOT an economic conservative. Best, Don Bauder

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BobDorn Jan. 18, 2012 @ 10:23 a.m.

I can't remember when Don Bauder wrote something I disagreed with, and the downfall of the great redevelopment scam is as important to San Diego as, say, an honest daily newspaper would be.

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Don Bauder Jan. 18, 2012 @ 11:23 a.m.

San Diego needs the end of one (redevelopment) and the establishment of the other (an honest daily newspaper). The first may well be accomplished -- keep your fingers crossed -- but I am afraid the second will not be forthcoming. Best, Don Bauder

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Linda_J_Wilson Jan. 18, 2012 @ 10:34 a.m.

There are at least of couple of Councilmembers that promote themselves as being business people. One of the first things a business does is cut unnecessary payroll. Most of the RDA related staff are not necessary for the transfer/sale of assets. So, where are the staff cuts?

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Don Bauder Jan. 18, 2012 @ 11:25 a.m.

Good questions. When will we see CCDC and SEDC people applying for honest jobs somewhere? Best, Don Bauder

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laplayaheritage Jan. 18, 2012 @ 11:54 a.m.

The City of San Diego Redevelopment Agency (RDA) may end on February 1, 2012. But from City Council meetings it looks like both CCDC and SEDC are going on living as non-profit agencies under the City Council.

http://www.sandiego.gov/redevelopment-agency/pdf/eops.pdf

On September 1, 2011 the City Council approved the State-required Enforceable Obligation Payment Schedule (EOPS) with a total Outstanding Debt or Obligation of $10.8 Billion in RDA Tax Increment (TI).

Page 10 shows all the Affordable Housing projects should still get funding.

Pages 3 and 4 itemize the Office of Inspector General Audit Settlement for only a portion @$78 million of the $228 million that CCDC/RDA misappropriated in Federal Community Development Block Grants (CDBG).

Congressman Filner is helping us try to access the $228 million in Tax Increment (TI) owed the poor specifically to End Veterans Homelessness and Chronic Homelessness in San Diego by 2015.

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Don Bauder Jan. 18, 2012 @ 12:08 p.m.

If those non-profit agencies go back to redevelopment as it was originally intended -- giving help to truly blighted, low-income neighborhoods -- then there may not be many complaints. But so many of CCDC employees have been devoted to corporate welfare projects for the plutocracy -- what will they do now? Most should return to the real estate industry, from whence they came. Best, Don Bauder

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Fred Williams Jan. 18, 2012 @ 8:38 p.m.

DeMaio, Fletcher, and Dumanis all want to bring redevelopment back. Conservative? Frugal? Pro Property Rights? Not one of them can claim that.

Only Bob Filner is delighted to see the money stay in San Diego, and welcomes the end of CCDC and its ilk.

Independents, like Brian Peterson, are ascendant in San Diego's general elections. Filner will be the next Mayor.

As to what new jobs former CCDC staff might find...sad to say, these pampered snowflakes aren't qualified for much. They've administered a scam that no longer exists. Their power, network of colleagues, prerogatives, and ability to justify their generous salaries has vanished. They were middle-men providing specialized details to favored developers on how to play the rigged redevelopment game.

Too bad things like workforce re-training have been cut because redevelopment scams like the ballpark hollowed out the education budget. Those poor CCDC souls could have benefited from learning how honest folk make a living.

I suspect most of them cannot ever find productive employment, and a few too many of them will be forced to run for public office.

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Don Bauder Jan. 18, 2012 @ 11:13 p.m.

You are correct: it is a joke that supposed conservatives want redevelopment back. They are not conservative. They are only pro-business, pro-greed, pro-their wealthy donors, and pro-wealth redistribution from the poor to the rich. I certainly hope Brian Peterson is on the ascent in San Diego politics. As for former CCDC employees, I would think some would get jobs with real estate developers whom they caressed when they worked for CCDC. But those developers have short memories and no personal loyalty, and may not hire them back. Best, Don Bauder

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Twister Jan. 20, 2012 @ 2:44 p.m.

"But those developers have short memories and no personal loyalty, and may not hire them back. Best, Don Bauder"

That would be contrary to tradition. Take this loyalty-among-thieves out of the cultural equation, and bureaucrats might turn to serving the public interest out of spite!

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Don Bauder Jan. 20, 2012 @ 10:26 p.m.

Good point, Twister. Before Susan Golding, the City's department dealing with real estate at least made a pretense of serving the public. Susan made it into a department strictly serving developers. If those bureaucrats won't get payback from the development industry they have served for so long, they might try serving the public. Nah. On second thought I think we are both dreaming. Best, Don Bauder

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Twister Jan. 21, 2012 @ 8:48 a.m.

Agreed. But one thing about real estate deals, there are (or should be) records that a team of journalism students could plow through . . .

Most of the arrogance comes from how easy it is to get away with it--and how INSTITUTIONALIZED it has been for decades. Advertise for whistleblowers?

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Don Bauder Jan. 21, 2012 @ 5:47 p.m.

You're not kidding. Corrupt real estate deals pulled off with taxpayer money have been deeply inculcated in San Diego culture. Best, Don Bauder

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ImJustABill Jan. 21, 2012 @ 1:04 p.m.

"What is fair?"

I think that question has gone missing in recent years from political dialogue and debate. It used to be that much political debate was about how much money should be taken from the middle class and the rich to help the poor. Is it fair to take money from hard-working and productive people in order to help less productive people? On the other hand, is it fair for some people in a wealthy society to be so poor? What level of income inequality in society is fair and healthy for the economny and society? And what level of income inequality requires government intervention?

I think now, with many projects, especially with redevelopment, these pesky and difficult questions get bypassed with the notion of:

"It's a win-win"

The political leaders don't have to bother discussing whether it's fair to take money from the middle class to subsidize wealthy developers and sports team owners because the it's a win-win - or technically a win-win-win. The lower class wins because of affordable housing, the middle class wins becuase of economic stimultions, and the upper class wins because of additional investment in their developments and business ventures.

Problem is the "win-win-win" story is intellectually dishonest. It relies on overly optimistic studies and analyses to somehow conclude that you can take money from A and B to give to C, but that somehow A and B will benefit as well.

I think we need to get back to asking the tough questions about "what is fair?: how much money should be taken from the rich and middle class to help the lower classes. And let's stop asking the absurd question about how much money should be taken from the middle and lower class to give to the rich.

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Don Bauder Jan. 21, 2012 @ 5:51 p.m.

Good fodder for discussion. In redevelopment, the bottom rung has not been getting its affordable housing; certainly the middle class has not gotten economic stimulation. The only winners are the developers and their downtown confreres -- such as lawyers and lobbyists -- who goose their profits from government subsidies. Best, Don Bauder

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