Jerry Brown wants to eliminate Redevelopment

Eliminating Redevelopment: a mixed blessing
Fred Blackwell (left) is Redevelopment's executive director. Francee Covington (right) was appointed to the Redevelopment Commission by Mayor Newsom

Calitics reveals today that newly sworn-in Gov. Jerry Brown told the Sacramento Bee that he’s proposing to eliminate local redevelopment agencies as part of a set of austerity measures that he is proposing in a purported effort to shock folks into approving new revenues

Brown’s shocking proposal got me calling tenants rights activist Calvin Welch and Arc Ecology executive director Saul Bloom, who both have strong and well- informed views on what’s up with local redevelopment agencies and how they could be improved. And interestingly neither Bloom nor Welch was in favor of eliminating redevelopment.

Welch, who hadn’t yet had time to read the article when I called him, actually laughed when I outlined Brown's basic idea, which admittedly is big on shock value and thin on explanations, at least at this point.
‘That would be very interesting, but the devil’s in the details.” Welch observed, noting that voters just approved Prop. 22 in Nov. 2010 to prevent the state from taking city redevelopment money to balance the budget in Sacramento. (Unfortunately, Prop. 22's passage still doesn’t protect San Francisco from having its budget raided by the state, since it's defined as both a city and a county.)

“That’s an astounding idea,” Welch added, trying to wrap his mind around Brown’s out-of-the-blue proposal. “Because in San Francisco, there are redevelopment areas, including Bayview Hunters Point, Mission Bay and the Transbay Terminal, that have already been authorized for another 25-30 years.”

“Perhaps the language would be ‘no new redevelopment’ but I don’t know how you would do that,” Welch added, noting that Brown has not only been governor before, but was also mayor of Oakland. (During his term as mayor, Brown was credited with starting the revitalization of Oakland but was also accused of being more interested in downtown redevelopment and economic growth than political ideology.)

Welch noted that San Francisco was fortunate in being able to reshape its Redevelopment financing arrangements in 1990 under then mayor Art Agnos.

“It was probably the most progressive and long standing reform of Art Agnos’ administration—and no one understands it,” Welch said. As Welch tells it, when Agnos came into office, he inherited a city that had been bankrupted by a decade of mayor Dianne Feinstein’s business-friendly policies, much like how San Francisco has been milked in the past decade by Newsom’s business-friendly policies.

“Redevelopment doesn’t pay its way in the post Prop. 13 world,” Welch stated. “Under Mayor Gavin Newsom, we’ve had the most market rate housing produced and the biggest deficits in what was a real estate collapse, as part of the collapse of the economic markets. And under Mayor Feinstein’s 10-year rule, we saw massive amounts of commercial office space built that never paid its way, leaving Agnos with a $103 million deficit.”

Welch notes that Agnos also inherited a huge homeless crisis (something Welch says Feinstein was in denial over) and that Agnos sought to reform Redevelopment in large part as a way to address the city’s growing lack of affordable housing. “Art basically said, let’s take a look at tax increment financing,” Welch said, referring to a tax financing arrangement, under which a municipality can a) do an assessed value of an area before redevelopment takes place, b) estimate what that same area’s local taxes would be after redevelopment, and c) borrow money against the incremental difference between a) and b).

“Art said, ‘I want to do that and I want to use the hundreds of millions of dollars available through redevelopment for affordable housing,'” Welch recalled. He noted that Agnos succeeded in his mission by shifting the San Francisco Redevelopment Agency’s mission from ‘urban renewal’ (which had negative connotations following the displacement of African American and other low-income communities from the Fillmore in the 1960s) to ‘community development,’ making Redevelopment subject to the same budgetary process as other departments, and insisting that 20 percent of tax increment financing dollars be devoted to affordable housing.
“But we said, ‘no, 50 percent has to be devoted to affordable housing and Art agreed, and that’s been the case since 1990,” Welch recalled. “And since then our Redevelopment Agency has been the principal source of affordable housing revenue in San Francisco.”

So, in another words, the San Francisco Redevelopment Agency is pretty much alone in the state, in terms of devoting half its tax increment financing revenues to affordable housing. But by the same token, San Francisco's Redevelopment Agency is pretty much alone in the state in terms of not being governed directly by a city council or a county Board of Supervisors. Instead, it’s governed by a Commission, whose members are appointed solely by the mayor . And therein lies the problem, Welch says.
‘It would only take six votes on the Board of Supervisors, or eight votes to override a mayoral veto, to change that,” Welch observed.

But to date there haven’t been eight votes to do that, even with a progressive Board.
Welch believes the problem is that supervisors, who currently each only have two legislative aides, fear swampage from Redevelopment responsibilities.
"To contemplate taking over a multibillion dollar agencies and taking on the likes of Catellus with only two staffers, well it’s a recipe for disaster,” Welch said, acknowledging that additional reforms, including splitting appointments on the Redevelopment Commission between the mayor and the Board, or allowing the Board to hire additional legislative staff to work on redevelopment issues, could solve the problem.

Bloom, who recently sued after the Redevelopment Commission threw his non-profit under the bus, said his non-profit’s recent experience perfectly illustrates why and how Redevelopment should be reformed, rather than completely eliminated.
“Redevelopment is a process that has been much abused, so it’s easy to say, let’s get rid of it, but I’m not there, ”Bloom said, noting that his beef has been with the way his non-profit was treated by Redevelopment Commissioners, rather than Redevelopment staff.
“But I do believe there needs to be a modification of the process, in which redevelopment is put in the hands of an entity that is answerable to the public.”

Bloom believes this modification could be achieved by making the Board of Supervisors the governing body of the Redevelopment Agency, which is already the case in almost all municipalities in California.
“Give that role to the Board of Supervisors because you can fire your supervisor,” Bloom said, noting that currently there are no limits on how long individuals, who are appointed by the mayor, can serve on the Redevelopment Commission. ‘If you give that role to the supervisors, they will be able to utilize more staff to become better Board members. So, this is an opportunity to increase people’s participation in the process.”

Meanwhile, it's possible that Brown's threat to eliminate Redevelopment will be like the time Warren Buffett, who'd just been announced as then newly elected Gov. Arnold Schwarzenegger's financial adviser, caused a brou-haha when he threatened to reform that even holier of cows, Prop. 13.