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Redevelopment money fight heats up as state controller announces it will audit 18 agencies

Turning up the heat on cities and counties in California, state Controller John Chiang announced Monday that his office will scour the books of 18 redevelopment agencies across the state to make sure dollars are being spent as the law intends.

Chiang will deploy staff to the selected agencies over the next few weeks, spokesman Garin Casaleggio said, with a goal of having a report in hand by early March. "It will be swift,'' he said.

The agencies to be reviewed include those in Los Angeles, Fresno, San Jose and the counties of Sacramento and Riverside. They also include smaller cities such as Placentia in Orange County and the border city of Calexico.

Chiang's move comes as municipal governments are pushing back against Gov. Jerry Brown's proposal to do away with redevelopment agencies, a move he said will save the state as much as $1.7 billion. In the weeks since the governor made his pitch, cities have hastily earmarked redevelopment funds for future projects, seemingly putting the dollars out of the governor's reach.

Redevelopment agencies take property tax dollars that normally would fund schools and other programs to pay for development projects in blighted areas. Cities say they are critical to breathing new life into aging business centers. Critics, though, see the funds as a giveway to developers.

Controller's office spokesman Casaleggio said the reviews are not a veiled threat for cities and counties to back off, but rather a way for the state to gain "empirical evidence" on whether redevelopment agencies are operating in a legal manner.

Chiang also pressed that view in a statement:

“The heated debate over whether RDAs are the engines of local economic and job growth or are simply scams providing windfalls to political cronies at the expense of public services has largely been based on anecdotal evidence,” Chiang said. “As lawmakers deliberate the Governor’s proposal to close RDAs and divert those funds to local schools and public safety agencies, I believe it is important to provide factual, empirical information about how these agencies perform and what they bring to the communities they serve.”

The agencies to undergo review were chosen to create a mix of large and small entities, as well as rural and urban, Casaleggio said. Redevelopment agencies have been audited in the past by the controller's office, usually to make sure that they are "passing through" tax dollars to school districts as state law mandates, he said.

This review will go further, looking not for accounting flaws but whether funds are being spent in a legal manner.

The controller will also ask for information on salaries and benefits paid to staff members and elected officials governing the agencies, something it has never before requested, Casaleggio said.

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Comments () | Archives (20)

We can see who is getting our money in LA. Furthermore, it will name the friends, and family members of the Pint Size Mayor as well as the city council.

My fellow Californians: It is time to elect new officials at every level .. councilmen, assemblyman, state senators, city council and school board members. They are once again putting the pocket book of the wealthy before its citizens. Come on 30 and 40 somethings run for political office, run for change, invest in your future and the future of your children.
Time to re-elect new officials are present folks no longers serve the people

Nice typos.

I commend the State Controller for his actions. As public agencies who tout the benefits of RDA's, they should welcome the audits to support their position. But if this is another Bell situation, RDA's should be disbanded.

Are RDAs "the engines of local economic and job growth or are [they] simply scams providing windfalls to political cronies at the expense of public services"?

Answer - a little of both. It's as good a time as ever for the new Governor to take a look into these.

I, and my fellow Hollywood CRA activists, whom the LA Times' Patrick McGreevy dubbed a " feral neighborhood council", never thought we would live to see the day when any state official would seriously investigate the CRA, much less propose putting an end to it. We commend Controller John Chiang and Governor Jerry Brown for taking on the CRA, who have been robbing the poor and our municipalities - until they now qualify as poor - for so many years to give to rich developers and cronies. Our member Bob Blue calls that the reverse Robin Hood approach.

We have a CRA area in LA that has been renewed regularly since 1969. That means the CRA has harvested tax increments for 42 years. In many areas the city is trying to run on the same amount of local taxes it was collecting as far back as 1969, the newer tax increment increases have gone into the developer cookie jar of the CRA.

For more information on the CRA go to: redevelopment.com Click on Ca. Assembly Member Chris Norby's easy to read, cartoon illustrated booklet, "Redevelopment, The Unkown Government".

In memory of author James Baldwin, who labeled "urban renewal", the name for redevelopment and the CRA, at that time, "Negro Removal" in the 1960's. He was describing the forced removal of the poorer people, mostly African American then, to make way for gentrification and developer profits.

"The controller will also ask for information on salaries and benefits paid to staff members and elected officials governing the agencies, something it has never before requested."

Watch the rats run for cover when this information reaches the taxpayers.

They really need to Audit INYO COUNTY where there's rampant CORRUPTION in the Good OL Boy Network, Yep in Bishop, CA there's Lots of Skeletons hiding in their closets

This is almost hysterically funny. Quick show of hands for those who believe that this ‘merely gathering facts so we can make a rational decision’. Ha!
Wait until they see the roll of business persons gobbling at the trough of Redevelopment.
Even better, when they go through the books (if they get to see the real ones) and find all the dirty little secrets….It will make the City of Bell and City of Industry Scandals look like stolen lunch money.

Just read that the City of Rialto is considering giving In-n-Out almost $350,000 to build in Rialto. If this is true, the Governor Brown needs to stick the oak stake in the hearts of Redevelopment Agencies everywhere. One In-n-Out will not change the economic fortunes of the City. Business has merely figured out that this revenue source is available and extorts each City. No doubt the citizens of the City would be very angry in In-n-Out did not locate in their City. People with warped sense of what is important.

Lovely. I'll help Chiang pinpoint some of those ill-spent dollars at LACRA.

long long long over due.
what took so long ?

The State wants to ensure that they have first shot at misappropriating, or misusing any funds. If anything is left over, then the counties and cities can have their shot.

You can be sure every politician right down to the tiniest town is up-in-arms over this. Development Agencies are the conduit of campaign contribution funds to your local council member.

One need only glance at the CRA rosters to recognize the appointment of heavyweight political hacks to the drivers' seats and a management bench with long ties to the real estate and real estate financing industry. Not too many feel-good community development advocates! They're marooned in comatose housing departments - which often build no housing at all.
Here in Los Angeles, the top CRA job went in 2009 to a Mayoral crony who lost her City Council election. Her second-in-command has such a long history with CRA-financed deals that he might ought to be scrutinized for conflicts-of-interest.
Make no mistake: the CRA is the tip of the spear here in Los Angeles, where no-brakes development (forget the 're') is the order of the land now. CRA makes deals happen because 1) it's loaded - flush with cash today from taxpayers tomorrow; 2) it's bloated with political appointments too ready to expedite deals; and 3) it's moated because it operates largely out of the public eye. The commission that purportedly steers it is not listed on the City's homepage (unlike other commissions).
What an odd turn of events that the Governor's office is out ahead of the media in sniffing out problematic policies and actions where CRA is concerned. Indeed, the reaction of local governments to the Governor's move shows how desperate are local governments to hang on to their community redevelopment agencies.

Finally someone is trying to do something about the corrupt CRA. All they do is give milllions of dollars to billionaires, and also sell and lease land for major loses to the city. Than the billionaires help keep corrupt officials in office. example city lease land for $1 month for 99 years AEG,ELi.

Finally, hopefuly something will come out of this, i hope they eliminate the CRA.

I also bet several officals are pissed Mayor included

This is why even Republicans should like Jerry Brown. He really is a penny pincher. He doesn't just want to throw money at social issues. He wants to know the money will really make a difference and the programs are effective. He will save us millions (and I hope, billions).

The easiest audit will be VineGate -- 1601 N. Vine -- and then ship that deal over the the FBI for criminal prosecution. The public has already obtained the documents to establish beyond a reasonable doubt that Garcetti, the CRA and the other players committed fraud on the City in 2006 to the tune of $1.4 by concealing the CRA's own appraisal of $4 M while pushing the developer's inflated $5.45 M appraisal on the other council members. Thus, in 2006 the City was defauded out of $1.4 M.

Then, in 2010 Garcetti proposed to sell back the VineGate property for only $825,000. In defending the sell back for 15%, they defended the practice as normal. Let's remember in LA the word "normal" includes "criminal." The $825,000.00 appears to have been part of the original fraudulent deal. Thus, we have an active fraud that was still being played out in 2010 even thought it began in 2006. Thus, there is no statute of limitations problem.

Also in 2006, Garcetti and CRA concealed that the true seller was Ullman and not Katersky; no doubt due to the prior audits which had strongly admonished the CRA to stop this type of behavior, i.e. accepting fraudulently inflated audits. Those audits arose in connection with Ullman's property two blocks north next to the Capitol Record building.

We need this audit and we need the FBI for the criminal aspect. By law, the City Attorney cannot investigate the City Council and the DA refuses -- probably due to the fact that Garcetti's daddy is the ex DA. That leaves the FBI, which is already investigating David Rubin and the LA dept of Housing.

The Chiang audit is great, but can he placed people under oath and criminal prosecute them for lying or is he limited to looking at the books an d publishing a report?

Finally!! JUSTICE WILL BE SERVED! Start with the audit of CRA, then on to the Vine St. debacle and Pacifica Ventures! It's time that our tax dollars stopped going to greedy developers!

A new word I learnt from CRA was "work-force" housing. This scam allowed developers to claim that they were providing work-force housing, whatever it means, because unlike low and moderate income housing that have an established income and maximum rent/price charged criteria, this has none. Hope Chiang will look into this, cause CRA will claim that they provided affordable housing, when in fact, they did not.


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