Conference lays out pitfalls of Redevelopment Agencies

Chris Norby is a man on a mission.

Prior to being elected to his current position on the Board of Supervisors of Orange County, Norby served as a Fullerton, City Council member from 1984 to 2002.

When he joined the Fullerton Council in 1984, he also became a member of the Fullerton Redevelopment Agency (RDA) and witnessed first hand the copious negative impacts of that city’s RDA, he said. Over time, Norby came to view RDAs as nothing more than elaborate Ponzi schemes, and one of the key reasons California is currently in such bad financial shape.

He has dedicated himself to speaking out against RDA abuses since the mid-90s, when he formed a group entitled Municipal Officials For Redevelopment Reform (M.O.R.R.).

Twice a year, M.O.R.R. holds a conference—in Northern California in the fall and Southern California in the spring—attracting local government officials, activists and residents who trade tips on fighting the establishment of RDAs in cities across California and share stories of success and failure in combating what Norby calls a “distortion of the market system that drains money from counties, school districts and police departments.”

Last Saturday, this reporter traveled to Long Beach to hear Martinez School Board Member Kathi McLaughlin speak at the M.O.R.R. conference about the Martinez City Council’s recent announcement that it’s gearing up for another attempt at forming an RDA here, despite being defeated by residents seven times over the past 50 years.

“We keep winning the battles,” McLaughlin said. “Can we win the war?”

In a PowerPoint presentation, McLaughlin outlined ‘a brief history of the Martinez RDA wars’ since the 1950s, when the then-City Council sought to form an RDA to revitalize “just one block.” In actuality, plans had already been drawn to condemn 10-20 blocks of Downtown Martinez and build 4-6 story apartment complexes, said McLaughlin. Martinez residents defeated that plan, and subsequent RDA formation efforts in the decades since, while various Martinez City Councils have spent hundreds of thousands of dollars over years on RDA consultants, feasibility studies and plan drafts in an effort to convince voters to support a Martinez RDA.

McLaughlin explained to the crowd of roughly 75 participants, including California Assemblyman Chuck DeVore, how in 2004, despite a City-financed “educational” flyer about redevelopment agencies — which described no negative outcome s— while RDA supporters vastly outspent opponents, an RDA ordinance, Measure M, passed by a margin of 459 votes.

“In 2004, RDA creation is still treated by law as just another Council action, and so there are only 30 days to collect 10 percent of the registered voters’ signatures for a referendum. What follows: weekend union-hall breakfasts followed by walking; phone networking; shopping center signature gathering; evening walking. A bit before the 30-day deadline, over 3100 signatures (almost 50 percent more than required) are submitted. The referendum petition is subsequently certified, and the RDA ordinance [was] suspended,” according to Tim Platt, a participant of the http://martinezca.org anti-RDA Web site.

Platt and McLaughlin both point out that the current Council is completely pro-RDA, particularly with Council member Janet Kennedy’s appointment to the Council in 2002, despite the fact that she did not run in the election. Kennedy is married to Jim Kennedy, Director of Contra Costa County’s Redevelopment Agency, who manages a staff of 16 and an annual budget of over $100 million, says the California Redevelopment Association.

According to the California State Controller’s annual report on the 425 RDAs in the state, in fiscal year 2006-2007—the most recent data available—Contra Costa County’s 17 RDAs (alternatively called Community Redevelopment Agencies (CRA)) received $170,262,305 in tax increment revenues, while all other local taxing agencies (school districts, fire districts, etc.) received $21,588,986.

Additionally, for fiscal year 2006-2007, the Contra Costa County Redevelopment Agency spent $1,793,471 on administrative costs, and took in $32,503,963 more in total revenue than it spent.

The Institute for Community Economics, with support from the U.S. Department of Housing and Urban Development’s Office of Community Planning and Development, explains in a working paper on California Redevelopment Law, that “California first authorized cities and counties to create redevelopment agencies in 1945 as a vehicle for addressing blight and economic distress. One of the main tools of redevelopment is tax increment financing. Under tax increment financing, the property taxes that existing taxing authorities –cities, counties, schools and special districts – receive from within redevelopment project areas are capped and most of the future tax increases – the tax increment – go to the redevelopment agency. The tax increments are used by the redevelopment agency to finance infrastructure improvements, site acquisition, real estate development and rehabilitation projects and other activities that support the revitalization of the redevelopment project area.”

Opponents of RDAs contend that while the original intent of RDAs may have been beneficial to communities, the scheme has been hijacked by developers, consultants, lawyers and bond brokers, and the 425 California RDAs currently have over $81 billion in bond indebtedness.

“One of the first acts of the Fullerton RDA was to hold an eminent domain hearing against a man who owned a home on the edge of an orchard, because a Gemco wanted to build a mega store on the property,” Norby said this week when asked how he first got involved in fighting RDAs. “I helped him and we beat it, but during my time on the Council I saw the RDA morph into something my colleagues used for personal profit.”