We admit that our reaction to the latest volley in the redevelopment fight in California, the State Controller’s report with “Analysis of Administrative, Financial, and Reporting Practices” of 18 selected redevelopment agencies (available here and below), has been much like that of Captain Renault when he discovered there was gambling at Rick’s.
In his press release announcing the report, the Controller notes:
- There is “no reliable means to measure the impact of redevelopment activity on job growth because [redevelopment agencies] either do not track them or their methodologies lack uniformity and are often arbitrary.”
- The report “exposes the difficulty of holding [redevelopment agencies] accountable for their funding decisions when existing legal standards are so loose that any area can be deemed ‘blighted.'”
- “The report also identified several missed payments to school districts and widespread accounting and reporting deficiencies, questionable payroll practices, substandard audits, faulty loans, and inappropriate use of affordable housing funds.”
- Several redevelopment agencies “made inappropriate charges” to their low and moderate housing funds, including administrative costs, “code enforcement,” a daycare center, and lobbyist expenses.
- “‘The lack of accountability and transparency is a breeding ground for waste, abuse, and impropriety,’ said Controller Chiang. ‘In whatever form local redevelopment takes in the future, the level of oversight and openness must be consistent with the amount of public dollars entrusted to their care.'”
While we say good for the Controller, we’re actually more thinking “where have you been all this time?,” so perhaps the more relevant quote from Casablanca would be Victor Lazlo’s final comment to Rick: “Welcome back to the fight.”
After all, should it be a surprise that with little effective supervision by the courts, the agencies themselves would not have any reason to generate standards to measure “success?” Remember, this is an industry which can declare entire cities “blighted,” which has been delegated the power of eminent domain, and which even has its own lobbying group. That group — the California Redevelopment Association — argues that redevelopment projects are responsible for more than 300,000 jobs, yet the report concludes there’s no objective data showing whether they’ve created jobs or not (see Observation 1, at page 15-16). The response? Redevelopment agencies “are not required to track the number of jobs created,” and those that do generate data use unclear methodology. Id. at 16. Baron Acton’s dictum in action, it seems.
As Gideon Kanner has repeatedly pointed out (see here, here, and here, for example) the actual success rate of redevelopment in California has been spotty at best, and in many cases has resulted in schlimmbesserung — a worsening by improvement. But as we know, that doesn’t count for much to the courts, which defer to mere claims that redevelopment might have all sorts of benefits, whether or not it actually does. The Report also notes that California’s definition of “blight” is so open, it allows the “redevelopment” of the 4 1/2-star Desert Willow Golf Resort in Palm Desert which is, under California law, “blighted.” The Controller’s Report responded “[t]he fact that the agency continues to insist that a 4 1/2-star golf course constitutes ‘blight’ further illustrates our point that virtually any condition could be construed to be blight.” Report at 18.
The report does not mention the gold rush being staged by redevelopment agencies statewide after Governor Jerry Brown announced that he wanted to eliminate them as a budget measure. For a flavor of the stories being reported in virtually every newspaper statewide, see:
Don’t get this wrong: elimination of redevelopment agencies will not cure all ills, and it appears that Gov. Brown 2.0’s efforts to disband the agencies is more motivated by the need for $5 billion to help with California’s massive budget shortfall, than by a sudden discovery of principles. As this editorial notes,”[i]n redevelopment fight, only the taxpayers lose.”
To read more about this from folks on the ground who are close to the issue, see these posts from California Eminent Domain Report, follow Cal Watchdog, and follow the posts about eminent domain and redevelopment issues on PLF’s Liberty Blog.
Here’s the Report: