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L.A. Council votes to shift $97 million in redevelopment funds

August 10, 2011 |  1:10 pm

California Governor Jerry Brown (L) responds to a question during a budget forum as State Controller John Chiang (R) listens in at Memorial Auditorium in Sacramento in December 2010. Credit: EPA/JOHN G MABANGLO

After months of serving as the ripest of targets for budget-cutting state officials, L.A.’s redevelopment agency turns out to be not so dead after all.

That news became official on Wednesday, when the Los Angeles City Council voted in favor of an urgency ordinance that keeps its redevelopment agency alive and intact -- by moving roughly $97 million in redevelopment funds to Los Angeles County.

Had the Community Redevelopment Agency refused to send that sum, it would likely have been forced to go out of business, under the terms of a budget deal approved nearly two months ago between Gov. Jerry Brown and the Legislature. Brown had repeatedly called for the outright elimination of redevelopment agencies.

Under a compromise, redevelopment agencies across the state can stay put in if they turn over $1.7 billion to other agencies this year and more money in future years. Even with those reductions, Los Angeles’ redevelopment agency will have $1 billion to spend between now and 2016 on a list of projects that was hurriedly compiled to keep the money out of state hands.

Backers of the redevelopment agency applauded the move, saying it had made a positive mark on the city by helping create affordable housing and parkland in low-income neighborhoods. L.A.’s redevelopment dollars “support the efforts of our nonprofit developer clients to develop and preserve affordable homes across Los Angeles,” said Lucy Fitzpatrick, an attorney with the advocacy group Public Counsel.

Critics have been less favorable, saying that development interests have used the agency as an ATM, getting money that would otherwise go to schools and counties. They point to a redevelopment agency vote earlier this year that -- in the middle of state budget cuts -- allocated $52 million for public improvements around a museum planned by billionaire philanthropist Eli Broad.

Before approving the ordinance, council members argued that redevelopment had invigorated downtown, Hollywood and other neighborhoods and railed at state officials for taking the money. “I really resent it,” said Councilman Bill Rosendahl. “What this governor and what this president has to do is bite the bullet on more taxes.”

The city’s redevelopment agency must send its first payment in January to the county, which will then distribute the money to school districts, fire districts and other agencies. In future years, the agency will be required to send at least $25 million, city officials said.

Municipalities up and down the state are still hoping that the state Supreme Court will block  implementation of those cuts and then take up a lawsuit filed by the California Redevelopment Assn., a group that represents nearly 400 redevelopment agencies. That group contends that the redevelopment law violates Proposition 22, which was approved by voters to keep the state from raiding certain local governments.

“We think the law is very clear and so we are optimistic that we will prevail,” said John Shirey, the group’s executive director.

L.A. is not the only city to take action to preserve its redevelopment activities. A majority of cities that responded to a California Redevelopment Assn. survey on the topic last month were determined to stick around, Shirey said.

“The indication was that 83% of the agencies were going to do anything and everything they could to try to come up with the money” required by state lawmakers, he said. “The remainder said they didn’t think they could do it, and would go out of business.”


Brown signs law to ax redevelopment agencies

Cities ask court to block raid on redevelopment funds

Lawmakers OK billions in program cuts in California budget

-- David Zahniser at Los Angeles City Hall

Photo: Gov. Jerry Brown, left, and state Controller John Chiang in Sacramento in December. Credit: John G. Mabanglo / European Pressphoto Agency