Friday, January 21, 2011

CityWatchLA - CRA, Taxes and the CD4 Candidates

CityWatch, Jan 21, 2011
Vol 9 Issue 6

Before Governor Brown astounded the State by proposing to abolish all the Community Redevelopment Agencies (CRA’s), this writer had sent a CRA questionnaire to the candidates for Council District 4.

The candidates for Council District #4 for the March 8, 2011 election are: Councilmember Tom LaBonge, Stephen Box and Tomas O’Grady. Each has a website so readers can see for themselves the biographical information.

The CRA’s were established after WW II as a vehicle to stimulate urban renewal. No city must establish a CRA, but Los Angeles chose to create one, CRA/LA. CRA’s obtain their revenue by taking all the incremental property tax revenue generated by their projects as well as by sometimes taking the sales taxes connected with their projects.

Bunker Hill, for example, has taken in $717 Million in property taxes for the CRA/LA. Overall, CRA/la has taken in $2.8 Billion; $1.2 Billion in the last seven years.

Because the schools had clawed back some of the CRA money by state statute and by lawsuits, the City supported Prop 22 on the November 2010 ballot which made it unconstitutional for any CRA money to go to schools or to the City’s general fund, e.g. for roads. Yes, the City defunded schools in order to give billions to real estate speculators!

Because the City has claimed that it is broke, and thus, it has to fire personnel and reduce services, the fact that the CRA has a multi-million dollar surplus merits public discussion. Hence, the CRA questionnaire.

Councilmember LaBonge’s response:
Councilmember finally made some written responses, although rather brief.

Candidate Tomas O’Grady’s responses:
Mr. O’Grady made long, thoughtful responses showing an openness which all candidates should exhibit.

Candidate Stephen Box responses:
Mr. Box’s also made long and thoughtful responses.

At the outset I believe all Angelenos should be very thankful that Tomas O’Grady and Stephen Box actually believe in openness and wrote extensive, thoughtful answers, knowing that their answers would be used for an article over which they will have no control. Councilmember LaBonge’s answer were short, evasive, and seldom dealt with the issues. Each reader can link to the full answers to form their own opinion about the candidates’ full statements.

Question #1: Should City Council tell the public about the multi-million surplus in the CRA/LA account when discussing the budget?

No. Instead the councilmember wrote: “The intricacies of the funding mechanism in place are available to anyone who seeks them out, and I will always work to make that information available to anyone who wants it. You can also go independently on-line to the city and CRA websites to find this information.”

Councilmember LaBonge will not disclose the data unless someone somehow knows that it exists and then he will give it to that person who apparently already knows about it. Voters can decide whether finding out the city’s true financial condition should be a Game of Hide ‘n Seek.

Yes, the public should know. Mr. O’Grady has some cogent and specific ideas how the CRA should provide more detailed information. He gave a lot of thought and research into this matter and I urge people to follow the link to his full comments.

Yes, the council has the duty to communicate all surpluses. Similarly, Mr. Box gave thoughtful answers and people should also read his comments in full.

Question #2: Do you favor abolishing the CRA?

No. Councilman LaBonge strongly disagrees that the CRA should be abolished. Contrary to the other two candidates, he did not provide any analysis how to deal with the CRA’s financial impact on the city.

Mr. O’Grady suggests a new Redevelopment Pilot Project to stimulate development from “within communities” as opposed to having large projects imposed on communities by outside developers. I interpret Mr. O’Grady’s comments to be “Yes” for abolishing the current CRA and designing a new one which achieves community objectives.

Mr. Box’s immediate remedy is to examine the CRA and its relationship to the City of LA and explore options for immediate action, leading up to a Charter Amendment that would abolish the CRA.

Both Mr. O’Grady and Mr. Box provided analysis of the situation and I recommend that readers link on to their full answers.

Update on Question #2: After my CRA questions were posed, Governor Brown announced his plan to abolish the CRA’s. Readers will have to look to candidates’ web sites for discussions of the Governor’s proposal. There will be much discussion in the upcoming weeks about how taxpayers can retrieve their billions upon billions of tax dollars from the CRA’s.

Question #4: Do you support bringing Kelo eminent domain to all of Los Angeles?

Under Kelo v. City of New London, 545 U.S. 469 (2005), a city may take property and give it to another private person for that entity’s personal profit. Traditional eminent domain forbids the property going to another person for personal profit. CRA eminent domain is Kelo eminent domain as the properties go to private developers who reap the profits.

LaBonge supported AB 2531 which would have brought Kelo eminent domain to every parcel in Los Angles. His response today is that he wants to review the matter with the City Attorney.

He opposes “unilateral eminent domain,” but there is no explanation of what he means about unilateral eminent domain, so at best his answer appears to be evasive. One would think that since he supported Kelo eminent domain, he would have some thoughts to share with the voters.

While he opposed the secretive manner in which AB 2531 was sprung upon the public, Mr. O’Grady would support a new AB 2531 to bring Kelo eminent domain to all of Los Angeles.

Mr. Box vehemently opposes expansion of eminent domain powers and would oppose any attempt to bring Kelo eminent domain to Los Angeles. He believes as a matter of principle that the government should not take one man’s property and give it to another private citizen.

Question #5: Since the City Attorney may not investigate wrongdoing at City Hall, would you support a charter amendment to bifurcate the City Attorney into two separate offices (1) City Attorney to advise the City, Council and staff, and (2) City Prosecutor whose sole function would be to prosecute criminal wrongdoers?

Because the City Attorney owes fiduciary duties to his clients who are the City, its staff, and its elected officials including the CRA, if a councilmember confides in the City Attorney, “I want to take this cash bribe from developer X,” the City Attorney cannot take action, even if the councilmember stuffs thousands of dollars into his pocket right in front of the City Attorney. Thus, the prosecutor whom the public believes would be most diligent in protecting it from city hall corruption is legally prevented.

The councilmember states: “This issue deserves further discussion, study and review.”

The point of the questionnaire was to obtain the candidates’ thoughts so that the voters can discuss, study, and review. This is a politician’s “No Comment” answer.

Mr. O’Grady’s answer is a thoughtful discussion of the different ways the civil and criminal functions of a City Attorney Office may be structured. Mr. O’Grady seems to believe that how the city attorney interprets the “client determination” issue can resolve the matter, and thus, it appears that he is not prepared to support two separate offices. I do not think, however, that this opinion will necessarily be Mr. O’Grady’s position on the subject.

Mr. Box supports bifurcation so that the City Prosecutor would be free to address any and all criminal matters which the City Attorney now handles plus being able to handle any and all criminal matters including felonies which involve the city, its staff and elected officials. He also supports Ratepayers Advocate (RPA) and an Office of Public Accounta-bility (OPA) who would assist in keeping the City honest.

Final Words:
Both Mr. O’Grady and Mr. Box provided extensive answers taking the city’s problems very seriously. Because literally billions of dollars and the quality of life for Angelenos are at stake, I hope people will take the time to look over their suggestions. Councilmember LaBonge’s seems to think everything is fine as it is.

(Richard Lee Abrams is an attorney in Los Angeles. He can be reached at )

1 comment:

kayojon said...

Thank you for your great analysis and description of what the CRA has become. But one additional CRA abuse is when it's used by the City to blackmail property owners to sell to a private developer by holding the threat of eminent domain over the property owner. This is happening in Glendale right now by Caruso at the Americana Mall. And why should the City be able to take the property for itself and then just turn around and sell it to the private developer at a unfairly low price.