Council Declines Takeover of Redevelopment Agency in L.A.

By Richie Duchon, City News Service

The City Council severed ties today with the Community Redevelopment Agency of the City of Los Angeles, a move top policy advisers said would shield the city budget from $109 million in costs but is not likely to fully protect the municipality from lawsuits.

After a lengthy debate, the council decided – on a 9-3 vote – against becoming the so-called successor agency in charge of liquidating the CRA/LA, a task required by a recent state Supreme Court ruling.

The move leaves the city with little control over the fate of 86 major projects, including many affordable housing developments, worth about $4 billion in total development costs.

The city has until the end of the month to decide whether to put the agency’s housing assets under the charge of its Housing Department.

The California Supreme Court in late December upheld a state law that eliminated the 400 redevelopment agencies across the state, which use increases in property tax revenue to fund development projects mainly in blighted parts of cities.

The law passed by the Legislature required the elimination of the agencies by Feb. 1. It also forced local governments to establish successor authorities to dismantle the agencies.

The council had by Friday to decide whether to take on the responsibility, which would include absorbing all of the CRA/LA’s employee and administrative costs.

City Administrative Officer Miguel Santana and Chief Legislative Analyst Gerry Miller warned in a report released late Tuesday that the salary and retirement costs for the 192 CRA employees could be as high as $109 million.

The law passed by the Legislature to dissolve redevelopment agencies did not provide enough protection for the city on employee and other liabilities, the report said.

“The reality of the situation is the CRA as we know it is dead,” Council President Herb Wesson said. “And I think it is time for us to take it off of the machine.”

The council approved Wesson’s motion for the city to begin immediately working with legislators in Sacramento to protect it from some of the costs and to request an opportunity to become the successor agency if the terms become more favorable to the city’s budget.

Councilmen Eric Garcetti, Richard Alarcon and Ed Reyes cast the dissenting votes, all saying the council did not have enough time to assess Miller and Santana’s report.”It is difficult to make a decision in 24 hours,’’ Garcetti said.

Alarcon argued it was unnecessary for the council to vote today when the deadline was not until Friday.
“We should use every minute of the day until the last minute to get more analysis,” he said.

Alarcon also chided the Executive Employee Relations Committee, which is jointly run by Wesson and Reyes, for moving begin the process of laying off CRA/LA employees.

“We should fight for these city employees. We should fight for the projects. We should fight in court if necessary,” Alarcon said.

Nearly all the council members were vocal in their opposition to the elimination of redevelopment agencies.

“This is a dark day,’’ said Councilwoman Jan Perry, who described herself as a strong supporter of CRA/LA. She said the move jeopardized more than 900 units of low-income housing and 3,000 construction jobs in her district.

Perry asked for a report back from legislative analysts on the possibility of creating a new redevelopment agency modeled after New York City’s.

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January 12, 2012  Copyright © 2012 Eastern Group Publications, Inc.

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