From Greg Sebourn, candidate for Fullerton City Council:
I was recently asked by a fellow member of the CRA why I felt that Redevelopment Agencies were bad for the public. After my long dissertation (found throughout this blog and elsewhere), I boiled it down to the CRA’s own principles.
7. That the market economy, based upon capitalism and free enterprise, allocating resources by the free play of supply and demand, is the greatest system for creating personal freedom, a strong constitutional government, and is the most productive supplier of human need.
Redevelopment vs. the Principles of the California Republican Assembly
Perhaps this candidate will attend our next MORR conference meeting in Sacramento where we can take him to school on the topic of eminent domain and redevelopment.
As you know there is a major difference between a valid “public use” and some of the horror stories that Assemblyman Chris Norby, District Director Bruce Whitaker and I hear virtually every other week. As it is we were invited to speak before a group meeting in Riverside tomorrow morning.
At the moment I cannot devote time looking for my SRA Book where there might be some other references to your topic headline.
Let me sign off as a prior four term CRA unit president as well as my connection to Chris’s MORR family.
Say Larry, how come the CRA endorsed Hide and Seek Harry Sidhu?
Tony.
I am not a member nor have I ever been a candidate for the GOP Central Committee. In fact, as our city council meets on the 1st and 3rd Monday’s I rarely get to any of their regular monthly meetings.
Speaking for myself, although we live in another jurisdiction, I did not support Harry.
While Redevelopment Agency Activities should be subject to careful scrutiny, they are not evil in and of themselves. First, under the constitution, neither the state or federal government can EVER give away property to a private entity or party. There is a constitutional prohibition called “gift of public funds” which prohibits the government giving anything away or selling it for less than market value. Any government agency violating the constitution should rightly be called on the carpet.
The second area which has historically been subject to government abuse is the finding of “blight.” Redevelopment law was put into place so that if an area fell into disrepair and began to become a danger to the community, the government could step in to restore the area to economic vitality. I have been involved in a program that took about 100 crack houses (literally of the drive up variety complete with slits in the doors for money/drug exchange and protective gun men behind the doors) and condemned them and immediately bull dozed them. Until it was condemned, this housing area had the highest murder rate and one of the highest crime rates in all of California. No private entity could have stepped in and assimilated these parcels. Once assimilated, the parcels could be sold to a private entity that was able to construct much needed marketing and retail for an area that was previously horribly underserved.
However, the above is unfortunately not the ordinary case. In many cases in Southern California, solid housing neighborhoods and mid-level retail were found to be “blighted” and condemned despite a complete lack of supporting evidence. In one famous case, a city condemned one big box retailer to simply replace it with a competitor. The courts finally drew the line and rejected that use of redevelopment power. Until recent reasonable scrutiny was thrown on these abuses, high end retail areas were condemned under a poorly conceived finding of “blight.”
In most of Orange County, it would be very difficult for any agency to make a legitimate finding of “blight” that would support use of the Redevelopment Agency process (although there are probably pockets here and there that really would meet the definition). Forgive the long diatribe, I am just afraid that those pointing out the rampant recent abuses (and there are many, believe me) “throw out the baby with the bathwater” and reject that few but important times when the Redevelopment Agency can properly exercise its power for the betterment of the community.
I am a approximately 25 year lawyer that has spent much of my career fighting the abuses of Redevelopment Agencies and trying to reform the laws so that they can actually accomplish their intended purpose.
Geoff. If you are referring to the 99 cents only store in Lancaster I am very familiar with that victory. Owner David Gold and LA attorney Gideon Kanner have each appeared as guest speakers at our MORR property rights conferences.
Perhaps you might check out the GIFT of Mission Viejo public funds when our mall was being renovated for 6-8 months BEFORE that council approved the related parking structure redevelopment bond measure. I met with a Deputy AG in Sacramento on that after the fact council approval.
Or perhaps we can discuss “just compensation” of valid takings which is another topic for another day.
Geoff, the redevelopment Agency in Fullerton has been handing out freebies to developers for years: free air rights; free land; write downs and subsidies. They’re all “gifts” of one kind or other but they are all justified by the bogus “economic development” mission that is never scrutinized by anybody.
Larry: I was talking about the CRA. Do you know why they endorsed Sidhu?
If the “free” gifts outstrip the tax increment that will be created by the property, that is simply illegal. That doesn’t mean that it isn’t happening, it simply means that no one with the knowledge and resources has stepped up to put an end to the abuses. There were very upscale areas in West LA that routinely declared high end neighborhoods “blighted” just so that they could expand a studio property. It took a concerted property owner effort to stop that practice. The problem is, that often when some one steps up to block the abuse the calculation of “just compensation” jumps up dramatically and the land owner is offered a veritable pot of gold that makes him quietly go away. Another abuse, but sine the public is the victim and neither party to the deal is going to turn themselves in, pretty hard to catch.
Tony. Quick response. No, I do not know why they endorsed that carpetbagger
Larry, at the time I was counsel for 99 cents only stores and know the story well. Lancaster’s use of its power was abusive, plain and simple. I will look into the Mission Viejo Mall situation.
As I am sure you are aware, adoption of bonds is an entirely different misuse of public funds than the exercise of the taking of property by Redevelopment agencies. Bond adoption is exactly like using your credit card instead of paying cash. Seems easy at the time but then those nasty interest payments can double the actual cost of whatever you are buying.
Since I have had as many cases against various public agencies over the issue of just compensation as any lawyer in California ( and have given speeches to many groups around the state about this), I am more than willing to talk about how government can “lowball” the value or refuse to pay “severance” damages to wholly compensate a private land owner.
Finally, we can also talk about the other “tricks” in the quiver of abusive government agencies such as refusal to pay true relocation costs, overvaluing the cost of restoring disturbed property or my all time favorite “regulatory taking.” I once had a city build four brick walls around my clients property and made us go through the expense of trial to prove that we no longer could use our property. We not only one the case but received our attorney fees and other compensation. I also had the case where “allegations” of an endangered species froze property use for eight years and we had to fight an recovery money for temporary taking.
Larry, needless to say, I am squarely on the private rights side of this one and am more than willing to continue the discussion any way that you would find useful.
Geoff.
I testifed before a Housing & Economic Development Committee in Sacramento on redevelopment abuses. In one hearing I met and listened to Ronzel Cato testify how the city of Fresno took his property when he had no desire to sell.
Both Tom McClintock and myself refer to Ronzel’s true life story as an illustration of local government abuse.
Ronzel is a fifth generation African American, the first in his family history to achieve the dream of every resident, to own a piece of America only to have it taken away for a turkey processing plant that went BK within a year or two. There are many other horror stories I have heard or witnessed across this country.
Geoff. I am pleased to see your efforts on behalf of victims. Exactly four years ago a member of the Castle Coalition/Institute for Justice requested my support in creating a limited group of property rights individuals to attend a fact finding meeting in LA with representatives of the GAO in which we were to address a dozen issues “in relation to eminent domain use in Los Angeles.”
Our team included three land use attorney’s, three LA area victims, and myself. They were represented by two members from DC and a government attorney from a Chicago office.
i.e. Question #7. “Can you provide examples of property or land acquired by the city’s use of eminent domain that remained unused or were used for purposes other than those stated by the city when proceeding with the condemnation?”
Perhaps you might be familiar with Vaughn-Benz furniture manufacturing in south Central LA. That complex, with two buildings and 30 employees was taken for an animal shelter but a complication arose.
When I spoke to David (Benz) he told me that there was no comparable land in downtown LA at the price he received. They offered him UP TO $20,000 for relocating his factory. What an abuse.
In our meeting with the GAO team we did discuss “unjust relocation compensation.” Many manufacturing businesses do not recover after a relocation where you might need to hire and train all new employees.
As to the 99 cents store victory I was under the impression that our colleague Gideon Kanner was the lead attorney.
Readers. This case in unique in that the plaintiff, 99 Cents Only Stores, owner David Gold, did NOT own the space in question. He had a 5 year lease with a 15 year option. The Lancaster RDA said they love the 99 cents store however Costco could generate a higher level of tax revenue. The District Court judge was not very pleased with that lame justification and issued an Order Granting Plaintiff’s Motion for Summary Judgement and Denying Defendants’ Motion for Summary Judgement.
Mr. Kanner was the lead attorney on the appeal. I was representing 99 cents on other advice and permitting issues involving the Lancaster/Palmdale area at the time the case was on going. Gideon and I have spoken about it a number of times over dinner.
I have had more success as of late defeating requests to take and have started using the “public use” defense more aggressively. I would say that the public agencies are at least starting to listen to that issue.
Geoff.
The next time you dine with Gideon give him my regards.
“Blight” can be whatever rulemakers define it to be.
All of the land that comprised El Toro MCAS was designated a blighted area. Who’d ever want to live in Irvine near that run down slum like area? That’s why Lennar only paid $650 million for the land and gave Irvine $200 million plus 1347 acres. Hopefully someday there will be a Great Park funded by redevelopment incremental tax revenues that people will be proud to live near.
anonymous.
Your first sentence is what I have used in many of my speaking engagements on this topic.
We tried to fix it four years ago when SD Sen. Christine Kehoe conducted a joint session on the topic of redevelopment and blight. In addition to testifying at that hearing I worked with her staff promoting what we call “metrics.” I was one of the first to support SB 1206 prior to it being watered down in order to get an adequate number of our legislature to buy in. I received a letter from Arnold in Nov 2006 in which he points out his personal analysis which led to his eventual signature on the bill.
As to the reuse of MCAS El Toro the blight might relate to the clean up as they dumped aviation fuel into the ground for decades prior to the base closure.
I would imagine that there are neighborhoods in Detroit and perhaps New Orleans which could benefit from a redevelopment project. However, barring a major disaster, I do not see the need to use public funds for private venture in Fullerton.
Thank you for the great information all of you have provided here.
Greg. If you checked our state’s redevelopment activity you would find that most of the projects are actually “development” rather than “redevelopment.”
You could pick any inner city as they age and are allowed to decay.
In 1992 Mission Viejo won an award as of the finest planned communities in American. In that same year our city council declared roughly half of the city blighted and formed a redevelopment agency and a RDA project area that included our commercial areas south of Oso Parkway to the border of San Juan Capistrano.
Following my 1998 testimony in Sacramento Tom McClintock addressed his committee calling it a “bogus declaration of blight.”
In the 2005 Joint Assembly and Senate hearing in San Diego I promoted creation of standard “quantitative” criteria so that we are all on the same page in declarations of blight.
I was born in Newark NJ which was no different than Detroit. I know what blight is and it surely is not what we found in moving into Mission Viejo.
For additional information on this topic please contact me and I will make sure you get a copy of our latest booklet on this topic. “Redevelopment. The Unknown Government.”
That’s the rub.