June 30, 1992 - From the June, 1992 issue

Point-Counterpoint: Yaroslavsky and Ridley-Thomas Debate CRA

The recent budget battles in the City of Los Angeles have raised substantive questions about the needs and role of the Community Redevelopment Agency. Our point-counterpoint this month reflects the compet­ing arguments. Participating are Fifth District Councilman Zev Yaroslavsky and Eighth District Councilman Mark Ridley-Thomas.


Ridley-Thomas: With such close City Council review of its priorities, the CRA is hardly a loose cannon.

Do you believe the CRA has a continuing vital role as the agency best poised to spearhead the revitalization of blighted neighborhoods?

Ridley-Thomas: Certainly. I doubt that without the CRA’s participation, the private sector would have ven­tured into redevelopment areas such as Watts, downtown L.A., Hollywood, Pico Union and Adams-Normandie. While mistakes were made, for the most part those communities were positively impacted. 

Furthermore, I believe the need for redevelopment is especially criti­cal in the wake of the recent upheaval when hundreds of buildings and busi­nesses were burned to the ground. I would expect the CRA to play a key role in revitalizing South Central Los Angeles and other parts of the City. Redevelopment is an important tool that the City Council must take advantage of to enhance the rebuilding process.

Under state law, the CRA has powers to assemble land, provide low-interest loans to property owners for rehabilitation, upgrade the City’s infrastructure, and eliminate blight. With these tools, the CRA creates incentives which attract private investment, economic development, new jobs, and affordable housing for residents in redevelopment zones.

Yaroslavsky: We must not fool ourselves into believing that the Agency should or can take the lead role in rebuilding after the riots of last month. CRA has built affordable housing in redevelopment areas and citywide. However, its overall record tilts strongly in favor of commercial development: from shopping malls, to office towers, to high-rise market-rate condominiums, to night clubs, to theaters.

CRA proposes to contribute $48 million toward Mel Simon’s shopping mall in Hollywood, when a neighboring development has opened successfully without any public help at all. CRA is now developing plans to move the Sports Arena to a rebuilt Union Station, at a cost to the taxpayers of tens of millions of dollars.

A few weeks ago, CRA was so anxious to position itself as the lead agency in the aftermath of the riots that it proposed a program of grants for damaged or destroyed businesses in redevelopment areas. Unfortunately, the program was so poorly drafted that it failed to provide adequately for insurance reimbursement to the CRA, or for reimbursement by the Small Business Administration when available These problems were later resolved, but as proposed, the CRA program would have foolishly and unnecessarily burdened our local government with costs which are designed to be borne by insurers and the Federal Government.

Clearly, this Agency is not fit to lead the City’s efforts in revitalization citywide.

Is the CRA currently so unresponsive to the City’s Council’s priorities that the Agency should be taken over by the Council?

Yaroslavsky: Yes. During the recent budget discussions CRA refused to use its tax increment dollars to pay for redevelopment activities within redevelopment plan areas, such as Convention Center debt service payments, that have previously been paid for with General Funds.

The Budget & Finance Committee asked the CRA to participate in this way so that we could save our rapidly shrinking General Fund for basic public services such as police and fire. CRA at first proclaimed it had no money at all to contribute; then it found $25 million; then it found an additional $20 million for the above-mentioned grants (but refused to make it available for the Convention Center as asked).

CRA refused to provide the Council with a clear picture of what programs would be cut if we took the $48.3 million proposed by the Finance Committee; but it persisted in recruiting its grantees to lobby the Council through blatant scare tactics.

The City Council cannot make sensible decisions on the allocation of city resources when a large chunk of those resources are under the control of a rogue Agency.

Ridley-Thomas: I don’t think so. In my short time as Councilman, I’ve seen the agency become increasingly responsive and accountable to the City Council since the passage of oversight rules which now govern the CRA. The Council now approves all CRA work programs, budgets, development agreements, loan agreements, and contracts exceeding $25,000. With project areas in eight of the City’s 15 Council Districts, I and many of my colleagues get a first-hand look at the CRA’s work in those districts. After all, accountability applies to the CRA and the City Council alike.

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Therefore, I see no overwhelming or practical reason for the City Council to take over the CRA. The Council has enough work to do already. With oversight rules firmly in place, the Council has every opportunity to review virtually every CRA action to make sure priorities are being met. Instead of pursuing a CRA takeover, the City Council should find more ways to include the agency in the rebuilding process.

What should be the priorities of the Agency and how well does it currently address these priorities? 

Ridley-Thomas: The CRA’s priorities must be the City’s priorities. The City Council approves priorities which are drafted by citizens’ advisory groups at the time a redevelopment plan is created. The plans are supposed to be reviewed by the City Planning commission and the CRA Board of Commissioners. The citizen groups also work with the CRA to establish annual work programs in redevelopment areas which reflect these priorities. These work programs are also approved by the City Council.

With such close City Council review of its priorities, the CRA is hardly a loose cannon. The CRA is historically charged with removing blight and encouraging economic revitalization. Yet the agency responded to the City’s need for more affordable housing and human services by shifting resources into those pro­grams when the City Council directed it to do so. Of course, much more needs to be done. 

Yaroslavsky: Every dollar of tax increment is a dollar taken away from police, fire, parks, paramedics, health, welfare and schools. In these recessionary years, every expenditure of the Agency ought to be measured against a comparable expenditure by the City, County or School District. 

The CRA cannot and does not exist within a vacuum; it has to act as a part of government and it has to contribute accordingly. Should we build a housing project for persons with AIDS, given the extreme sacrifices we are being forced to make in general governmental services? Probably so. Should we build a shopping mall? I think not. Unfortunately, CRA has yet to recognize the differ­ences between the two. CRA has to come into the City family and allow its resources to be used, legally and appropriately, for the good of the entire City. 

Should the CRA’s Central Business District cap be lifted and for what purposes should the additional monies be expended?

Yaroslavsky: Redevelopment of the west side of the Central Business District has been completed; the “pump was primed” for downtown development long ago, and water is now drawing noisily without any public help. However, the eastern side of the CBD still has a long way to go. CRA should proclaim victory in the west: close down the CBD project; and begin a new project in Central City East. This would return tax increment revenues to the taxing agencies where they are vitally needed: and it would allow the Agency to concentrate on redevelopment of a truly blighted area. 

Alternatively, if the CRA were to join the City family and agree to bear its fair and legal share of the City’s financial burden, perhaps it would be appropriate to lift the cap. If not, the City as a whole will be better off if we allow the cap to be reached and allow the Central Business District Redevelopment Area to expire. 

Ridley-Thomas: Yes, but not unconditionally. The City Council can help rehabilitate riot-torn areas of the City and address its critical budget crisis by lifting the spending limit on downtown development. This move could be one of the City’s best decisions to deal with the affordable housing crisis, the need for increased human services, the provision of jobs, child care and other critical issues. 

Since redevelopment dollars are not subject to Proposition 13, the City Council and the CRA must work closely together and use those monies to devise innovative pro­grams which provide new housing, child care, jobs and job training, economic growth, and community reinvestment in Los Angeles. 

With the federal and state government earmarking additional dollars for Los Angeles riot relief, we must find a way to leverage those dollars for maximum benefit. One way is to lift the CBD spending cap and put those dollars to work immediately. However, the cap should not be lifted unconditionally: affected communities must be assured that there will be no more business as usual by the CRA or the Council. Once again, our credibility is on the line.

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