Downtown Long Beach Associates President and CEO Kraig Kojian explains why redevelopment is important not only to downtown Long Beach, but the entire city, during a news conference aimed at rallying support for the MyVoteCountsCA.org campaign.
UPDATE 11:15pm | Area business leaders and officials who support redevelopment joined together in Long Beach this morning to rally support for a campaign telling state lawmakers, who currently hold the fate of California redevelopment in their hands, that the people have voted, and they want redevelopment to be left alone.
State legislators could as soon as this week vote on Gov. Jerry Brown’s proposed budget, in which $1.7 billion would be diverted this fiscal year from redevelopment agencies across the state to cover Medi-Cal and courts system costs. As it stands, redevelopment would be terminated altogether.
The rally was held at First Street and The Promenade, where redevelopment supporters touted MyVoteCountsCA.org and urged people to sign a petition that will be sent to Sacramento with the message that “enough is enough.”
The campaign is based on Proposition 22, a state ballot measure that passed last fall barring the state from pilfering local governments’ coffers. Redevelopment supporters believe lawmakers would be breaking state law should they approve a budget that includes the liquidation of redevelopment agencies.
The constitutional amendment specifically bans the state from borrowing or withholding tax revenues and funds that have been allocated to local government, public safety. and transportation. It remains unclear whether terminating a program that relies on such tax revenues would fall under the auspices of this law.
Long Beach Chamber of Commerce Board Chair Jim Eaton expressed exasperation with elected officials in Sacramento.
“We are frustrated and concerned that Sacramento is ignoring the voters’ will and are poised to eliminate redevelopment,” Eaton said. “Last November, just four short months ago, 61 percent of California voters voted ‘yes’ on Proposition 22.
“Prop. 22 was put on the ballot because of too many years of Sacramento politicians taking local government money to solve the state budget mess,” he continued. “What part of no do they not understand?”
In Long Beach, the push is on to preserve redevelopment programs.
Kraig Kojian, president and CEO of Downtown Long Beach Associates, said that much of downtown Long Beach’s renaissance can be at least partially tied to the efforts of the city’s redevelopment agency.
He wants the state to “keep its hands out of our local pocketbooks.”
“The current budget plan to kill redevelopment flies in the face of the clear will of the voters and represents yet another attempt by the state to divert our local tax dollars away from our communities,” Kojian said. “If that happens, the future improvements of our downtown are at risk.”
Kojian estimates that shutting down redevelopment in Long Beach would cost the city hundreds of millions of dollars in economic activity and thousands of jobs.
Statewide, redevelopment proponents say that redevelopment activities support 304,000 jobs, contribute to more than $40 billion to the state’s economy and generate more than $2 billion in state and local taxes.
Citywide, redevelopment activities create 5,700 local jobs annually, redevelopment supporters said.
Former Ninth District Councilman Val Lerch, who today serves as a board member for the North Long Beach Redevelopment Project Area, was also on hand. He painted a crisp snapshot of how redevelopment is directly linked to improvements in his district.
“Long Beach’s Redevelopment Agency continues to make positive impacts on our local economy, and the numbers speak for themselves,” Lerch said. “From 2002 to 2010, our Redevelopment Agency has invested more than $101 million in public improvements in the North Long Beach area alone.”
Those public improvements, the former councilman added, generated $156 million in business revenue and created more than 1,200 local jobs.
“Frankly, I’m outraged that our state leaders think they can dismiss the vast majority of Californians who voted last November to support Prop. 22 and stop state raids of local funds,” Lerch said.
The event preceded the Long Beach Redevelopment Agency’s vote later this morning to transfer control of its $180 million in assets to the city to ensure the state can’t get its hands on it. The Long Beach City Council is slated to consider receipt of the assets at tonight’s council meeting.
A Scathing Audit
Redevelopment foes support the governor’s proposal, having long complained of widespread fraud and mismanagement of tax increment funding through a program that lacks oversight, has easily manipulated rules and contains a plethora of loopholes and opportunities for fraud. Detractors have even called it an example of corporate welfare.
Their sentiments received somewhat of a boost this morning when State Controller John Chiang released the findings of an audit of 18 select redevelopment agencies
There are 398 active agencies statewide, and collectively the average about $5.5 billion in expenditures each year.
Chiang cited widespread accounting and reporting deficiencies, questionable payroll practices, substandard audits, faulty loans and illegal use of affordable housing funds as being commonplace at most of the agencies audited.
John Shirey, executive director of the California Redevelopment Association, dismissed Chiang’s audit as politically motivated and lacking soundness, calling it in a prepared statement a “politically motivated campaign piece to support those who want to abolish redevelopment.”
Bob Stern, president of the nonpartisan Center for Governmental Studies in Los Angeles, told the San Jose Mercury News that he disagrees that the audit was political in nature. He thinks it was high time someone scrutinized them.
“Until this year, no one was looking at how redevelopment agencies spent their money or whether the money was being spent wisely,” Stern reportedly said. “Even if Jerry Brown doesn’t succeed in taking away the money, he has put a spotlight on these programs.”
Poll Results Reveal Support
A poll released last Friday indicates that about 64 percent of likely California voters oppose liquidating redevelopment agencies.
The telephone poll was conducted by Probolsky Research LLC between Feb 21 and 24 involving 753 voters. Its margin of error is plus or minus 3.7 percent with a 95 percent degree of confidence, according to the poll.
The findings include that 59 percent of voters say redevelopment agencies are a good idea; 63 percent say that Prop 22 should not be changed to allow the state to take local funds, and 63.9 percent of voters say that redevelopment agencies should be allowed to continue operating, when given the choice between elimination or continuation.
3:01pm | In a move to protect its assets in the event that the state moves forward with the governor’s plan to eliminate redevelopment, the Long Beach Redevelopment Agency Board voted today to hand ownership of its more than 200 properties over to the city.
RDA Director Amy Bodek said the properties have a value of roughly $180 million on the books.
RDA Board Vice-Chair Diane Arnold and board members John Cross, John Thomas, Julie Heggeness and Teer Strickland cast supporting votes regarding the transfer. Chair Bill Baker and board member Vivian Tobias were absent.
The RDA board members agreed to the move to maintain local control of the properties in the event that Gov. Jerry Brown’s proposed state budget, which includes doing away with redevelopment as a means to save roughly $1.7 billion this budget year to help close a $26.6 billion state budget deficit, is approved by the state legislature. They fear that should redevelopment be terminated, control of the properties could go up for grabs.
State lawmakers could vote on the budget proposal as soon as this week.
The $1.7 billion would be redistributed to fund Medi-Cal and the courts system under Brown’s plan, said Tom Modica, director of government affairs and strategic initiatives for the city of Long Beach.
“In the future (under the governor’s plan eliminating RDAs) the tax increment would be distributed to local taxing entities like schools, counties, special districts and cities,” Modica said in a Monday e-mail.
There are 398 active redevelopment agencies in the state, and their expenditures are estimated at about $5.5 billion a year.
Roughly 40 percent of Long Beach lies in a redevelopment project area.
In addition to the 200-plus properties, the RDA Board also voted to transfer ownership of several fixed assets, including various parking pay stations, the surveillance camera system installed along Pine Avenue and automated parking equipment for the parking garage at City Place.
Several residents expressed opposition to the move, relaying concerns that future city council’s could sell off the properties to, for instance, offset the city’s deficit.
The RDA Board stated that keeping the properties and assets under local control is paramount at this juncture.
The Long Beach City Council is expected to consider assuming ownership of the land and fixed assets during tomorrow’s city council meeting, scheduled for 5 p.m. in the Council Chambers at Long Beach City Hall, 333 W. Ocean Blvd.
Disclosure: Long Beach Post publisher Shaun Lumachi is a consultant to the Long Beach Area Chamber of Commerce.