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L.A. Council locks up $1 billon in redevelopment money that the governor wants for state budget

March 8, 2011 |  5:08 pm

Worried that state lawmakers will soon sign off on Gov. Jerry Brown's plan to shutter redevelopment agencies to help balance the state budget, the Los Angeles City Council voted Tuesday to tie up more than $1 billion in redevelopment money.

On the same day that voters were going to the polls to fill seven open council seats, the council approved a series of property transfers, financial commitments, housing loans and consulting contracts favored by Mayor Antonio Villaraigosa's appointees at the Community Redevelopment Agency.

Councilman Herb Wesson urged his colleagues to safeguard the money before state lawmakers act on Brown’s proposal. “What we are attempting to do is protect assets that are valuable to us,” he said. “If we do not act and they do, we will regret it.”

Councilman Paul Koretz voiced doubts, asking redevelopment officials if they were rushing to spend the money. And Councilman Paul Krekorian complained that he and his colleagues had been given too little time -- less than 24 hours -- to digest dozens of complicated financial proposals.

"I haven't had any opportunity whatsoever to start to get up to speed on this and consider this -- and frankly, none of us have," said Krekorian, who along Councilman Greig Smith voted against the transfer of funds.

Tuesday's debate was the latest in the ongoing political struggle being waged cross the state. Supporters of the city’s redevelopment agency, including nonprofit groups and affordable apartment developers, said it should continue its mission of using property tax revenues to provide homes and amenities to low-income neighborhoods.

Critics said too many of the city’s redevelopment projects were financial giveaways to politically connected businesses. They argued that redevelopment deprives schools and hospitals across the state of scarce tax revenue.

“What you're doing is protecting a slush fund for the wealthy, and that's a crime," said Ron Kaye, a former newspaper editor who is now an organizer with L.A. Clean Sweep, which is trying to elect newcomers to five council seats.

The meeting occurred one day after state Controller John Chiang released an audit stating that several redevelopment agencies lack oversight and use affordable housing money in improper ways. But employees of the redevelopment agency, some of them fighting back tears, told council members that they had worked hard to try to improve blighted neighborhoods.

Councilman Richard Alarcon said redevelopment had cleaned up contaminated sites and created hundreds of housing units in his district. But he agreed that Brown was succeeding in a campaign to make redevelopment agencies "a bogeyman" in the eyes of taxpayers.

The council allocated up to $930 million for scores of projects recommended by the redevelopment agency. That money would, among other things, preserve $35,000 available for security cameras in Reseda, $1.6 million for the renovation of a shopping center in North Hollywood and $50 million for a proposed skyscraper on Grand Avenue in downtown Los Angeles, according to a report submitted Monday to the council.

In a series of other votes, the council moved another $103 million, including loans for affordable housing projects and an extension of existing contracts with up to 19 law firms.

Kelly Martin, a lawyer for the redevelopment agency, described Brown's proposal as "unnecessarily punitive" and said the city would respond with a lawsuit.

"We will surely challenge it, as will others around the state," she said.

-- David Zahniser at Los Angeles City Hall