Padilla Bill on Redevelopment Agencies Should Be Top L.A. Priority

By Gary Toebben

For Mayor Antonio Villaraigosa, City Council President Herb Wesson and the members of the Los Angeles City Council, the number one priority for this week should be to rally Speaker John Perez and the other members of the Los Angeles Legislative Delegation to mobilize statewide support for Senator Alex Padilla’s bill SB 659 which would extend the life of Redevelopment Agencies (RDA’s) from Feb. 1 to April 15.

Padilla’s bill is not about whether to end RDA’s, that issue has already been decided and the State won. Padilla’s bill is about making sure that the dissolution of RDA’s does not cost our city and state thousands of jobs and billions of dollars from the abandonment or mismanagement of projects which are already underway.

Last year, Governor Brown led the charge to eliminate the State’s nearly 400 RDA’s and reallocate their property tax revenue to counties, school districts, cities and the state.

In December, the California Supreme Court ruled that the State had the constitutional authority to eliminate RDA’s. The Court’s decision set in motion a hasty process for determining a “Successor Agency” to take over the responsibility for each RDA’s assets and projects that require continued oversight or management.

Unbelievably, the time schedule for eliminating the 64 year old RDA program is February 1, which is 14 days from today.

Last week the Los Angeles City Council decided not to take on the responsibility as the “successor agency” to the Los Angeles RDA. After reviewing a 60-page report from the City’s Chief Legislative Analyst and Chief Administrative Officer, the City Council, with the blessing of Mayor Villaraigosa, decided that the City did not have the financial resources to assume responsibility for the salary and benefits of the 192 people that are currently on the RDA payroll.

It is unlikely that Los Angeles County will vote to become the “successor agency’ which means that a three-member oversight board will be appointed by Governor Brown.

It is unclear when this board will be appointed and whether it will have time to do any planning by Feb. 1.
Governor Brown and the legislature won the political and judicial battles over the use of property taxes generated by RDA projects. The L.A. City Council protected itself from an immediate increase in the City’s budget deficit.

RDA’s will be eliminated and there will be no new RDA projects. But none of these actions eliminate the need for continued oversight and decision making to make sure that the thousands of RDA projects that have been used to revitalize cities across the state do not crumble under lack of management.

As of today, there are scores of unanswered questions and dozens of unintended consequences about how this process will be managed overall, let alone in 14 days.

Before State officials celebrate their victory and L.A.’s Mayor and City Council wash their hands of RDA “successor agency” responsibilities, it is absolutely essential to the economy of Los Angeles and California that the Mayor and City Council focus their complete attention on mobilizing the Los Angeles Legislative Caucus to pass Senator Padilla’s bill, SB 659.

While the Governor, the legislature and the L.A. City Council are worried about money, we’re worried about keeping jobs.

Only this action will give the City of Los Angeles and other cities across the state the time to assure that private and public assets that have been invested in creating new jobs are not doomed with the demise of RDA’s. There is no higher priority this week.

And that’s The Business Perspective.

The Business Perspective is a weekly column by Gary Toebben, President & CEO of the Los Angeles Area Chamber of Commerce, produced with the input of Public Policy staff.

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January 19, 2012  Copyright © 2012 Eastern Group Publications, Inc.

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