When will Huell Howser cover shakedown’s in Redevelopment projects?

Assemblyman Chris Norby correctly named his informative booklet on redevelopment “The Unknown Government” for a very valid reason. Redevelopment is a very expensive stealth activity.

How many residents know that “out of California’s 478 cities, 387 operate redevelopment agencies?” Peeling the onion further I need to mention that these are state agencies in which local city council members, “lacking the skills to manage large sums or negotiate complex deals,” commit millions of dollars in future bonded indebtedness without voter approval. As of now our statewide RDA debt is around $93 billion dollars.

Basic information on these agencies can be found at the end of this post.

Friday’s LA Times report by Kim Christensen and Jessica Garrison exposes redevelopment agency abuses including Temple City where former mayor Judy Wong was sentenced to 16 months in state prison for bribery.

The $64,000 question. Will Huell Howser visit any of these RDA sites?

Not to violate copyright laws I will edit the Times story and add their link at the end of this post.
My warning is that while we have part time city council members whose stipend may be at minimum wage, the opportunity for abuse is wide open.
Generally, the City Council members switch hats and function as the redevelopment agency which by itself is not an elected position.

Oct 1. 2010  LA Times             ARRESTED REDEVELOPMENT

Lots of cash and little scrutiny in city redevelopment

“City agencies meant to improve blighted areas are rife with problems that cost the public millions.

It was a redevelopment deal with an unusual form of payment: plain white envelopes stuffed with cash and delivered to a go-between at a preschool.

And that was only part of what developer Randy Wang said he paid to Temple City officials who “repeatedly solicited bribes” in return for their support of his $75-million Piazza mall project.

His allegations led to criminal charges against then-Mayor Judy Wong and three other people, all but one of whom have pleaded guilty or no contest to bribery, perjury or other crimes. Wong recently was sentenced to 16 months in state prison, the harshest penalty so far.

As for the project — 3.7 acres of retail space and restaurants — construction that was to be finished two years ago has yet to begin.

“Does anyone REALLY believe this will get built in our lifetime?” asked a miffed Facebook user on the “I Love Temple City” page, under the heading of “The Piazza/vacant lot/mud hole.”

The Temple City fiasco reflects problems at many of California’s 400 municipal redevelopment agencies, obscure arms of government that pair public money with private developers to improve blighted areas.

The Times found widespread instances of corruption, questionable spending and poor accountability at such agencies, which take in $5 billion in property tax revenues each year. Under state law, the agencies are allowed to keep any increases in tax revenue in areas they improve.

One state audit found that dozens of agencies had failed for years to share money with schools and counties, as required. Los Angeles County agencies shorted schools and services by at least $60 million in fiscal year 2005, a review by the state controller found in 2008.

Auditors also found that the City of Industry reported to the state that it gave $2.5 million to schools and the county in 2006. The problem was the payment should have been $21 million.

And when auditors sought more information, 14 of the county’s 74 agencies did not respond and 11 others admitted they did not follow the law. .

A recent report by the Senate Office of Oversight and Outcomes concluded that no state agency oversees redevelopment. In many projects, even the most basic accountability is lacking, said George Lefcoe, a professor of real estate law at USC.

“What we really want to know as taxpayers is, what kind of public funds were involved — what did we give and what did we get?” he said. “You cannot get those answers anywhere.”

“Just because someone is running it doesn’t mean they’re qualified to manage large amounts of money,” said Stanislaus County Supervisor Jeff Grover about the redevelopment agency in Riverbank, a city of 22,000 in the Central Valley.

In 2007, the Riverbank agency spent $1.7 million for the Del Rio Theater, with plans for a downtown arts venue. Unfortunately for local taxpayers, their leaders didn’t order a structural evaluation of the 60-year-old building until after the sale.

Engineers last year declared it unsound, city records show, and it could be razed.

King City, a Monterey County town of about 11,600, had big plans for Town Square, a $9-million redevelopment project.

It also had Scott Galbraith, a free-spending redevelopment director with a taste for establishments like Chester’s Beer of the World and Hooters, according to a 2004 city-funded investigation that accused him of making sweetheart deals with Town Square’s developer.

The city’s private investigator also found that Galbraith steered $375,000 to a Canadian marketing firm he had ties to, and that he billed the city $89,000 in personal expenses, including restaurant tabs and airfare for his wife.

The investigator reported the episode as a “total system failure” marked by “incompetence and impropriety and “little or no accountability.”

Galbraith denied the allegations and said city leaders were well aware of his actions. No criminal charges were filed, but the city sued Galbraith and the developer, who filed a counterclaim that they had been defamed. The dispute was settled out of court.

In 2008, the San Gabriel Valley city of Rosemead paid $4.4 million for a hotel property it planned to redevelop as part of a larger project including retail outlets. In the interim, the city leased it for two years, planning to collect $6,000-a-month rent the first year and $10,000 the next.

But the contract didn’t require the operator to actually make the payments, and the city allegedly lost more than $50,000 in unpaid rents. Apparently no one on the council at the time caught the omission, said Councilman Steven Ly, who was elected last year.

“The best-case scenario is that it was just bad mismanagement,” he said. “The worst case is that there was something nefarious going on.”

Hercules, population 25,000, boasts a certain coziness that has little to do with its size or location on San Pablo Bay in Contra Costa County.

In 2003, after a federal grand jury indicted its affordable-housing manager on charges of bilking the program of $390,494, the town turned to Nelson E. Oliva and his NEO Consulting firm to take over.

Oliva, who had worked for Hercules’ then-city manager, Mike Sakamoto, in Bellflower’s city government, landed a two-year contract worth $255,000 for his company, doing business as Affordable Housing Solutions Group.

It was the start of a lucrative relationship — and it didn’t end when Oliva succeeded Sakamoto as city manager in 2007. Last year alone the company did $950,000 in city business, including overseeing other city programs.

Apparently to head off conflict-of-interest concerns, Oliva gave the company to his daughters, Adrianna and Taylor, one then in high school, the other in college. Taylor Oliva, a recent graduate of UC Davis, was named president in 2007, according to NEO’s website, which until recently had lauded her as the firm’s “guiding force … responsible for the overall operations of all corporate activities.”

That job description was a little more formal than one the Contra Costa Times found on her Facebook page earlier this year.

“Ha ha ha … I loves my job!!!” read the posting, which has since disappeared. “Its good money and my co-workers are great. It also happens to be a perk being the bosses daughter, believe it or not. Free Lunches!!! lol.”

Pastor Billy Ingram first heard of plans to redevelop the Crenshaw district’s Santa Barbara Plaza in 1984, in a speech by then-Los Angeles Mayor Tom Bradley.

“Since then, I have been in hundreds of meetings and I have heard all of the propositions, the schemes, the games, the snake oil, you name it,” said Ingram, whose Maranatha Community Church is by far the best-kept parcel on the 22-acre property.

The plaza was sliding into decay three decades ago. Today it is a sprawl of mostly boarded-up businesses and chain-link fencing surrounding a huge wasteland of a parking lot.

Los Angeles leaders once envisioned the site, redubbed Marlton Square, as a $170-million showpiece of new shops, affordable homes and condos for seniors. Little of that has come to pass, thanks largely to the decision to award millions in subsidies and loans to developer Christopher Hammond, whose good record of building affordable housing was offset by his history of financial troubles.

The Times reported in 2004 that Hammond or his companies had bounced dozens of checks totaling $200,000, and that he was being evicted for not paying his office rent. Then-City Controller Laura Chick also warned the council, but it still tapped Hammond, a prolific political contributor and fundraiser, to shepherd the project. She later said city leaders “blew it.”



“Since the California Redevelopment Law (CRL) granted redevelopment authority to cities and counties in 1952, cities and counties have been given a set of special powers to eradicate blighted conditions in urban areas. These powers–eminent domain, tax increment financing, and ability to assemble and sell property–distinguish redevelopment agencies from all other local government agencies in California.

The CRL creates a redevelopment agency (RDA) in every city and county which can exercise redevelopment powers in designated redevelopment areas. To activate the RDA, a city or county must adopt an ordinance and bylaws. In most instances, the legislative body of the city or county serves as the governing board of the RDA. Once the legislative body in a city or county establishes an RDA, it can adopt a redevelopment plan governing the development of specific areas within the city’s or county’s jurisdiction. These areas are designated “project areas” under the CRL.”

To avoid “conflicts of interest” relating to city business Mission Viejo council member Cathy Schlicht has Agendized a Revolving Door Ordinance to prevent former staff, commissioners and council members, who must file Form 700s, against engaging in self dealing for four years after they leave office.

A stiffer policy already exists for post government service including a personal lifetime ban after leaving DoD. “After you leave Government service, you may not represent someone else to the government regarding particular matters that you worked on while in Government service.”

Cathy’s agenda proposal should be supported by our city council on Monday.

About Larry Gilbert