Redevelopment done right is a good thing, a really good thing. It helps to revitalize communities by creating jobs and affordable housing and becoming a catalyst for beneficial economic activity. I’m a fan of such redevelopment.
But “redevelopment done right” in my book doesn’t just focus on the end results. In fact, putting too much emphasis on the results of redevelopment leads to serious problems along the way and keeps redevelopment agencies from achieving their maximum potential in the public interest. Here are some problems going on right here in the city of San Diego.
1) Until recently, the San Diego Redevelopment Agency had not audited its finances for fiscal years 2003 through 2006. In July, one of my clients (through me) asked for copies of the audit reports for these periods and was told that they had not been completed, despite a statute requiring them to be completed not more than six months after the end of the fiscal year. Two days after my client sued, the SDRA provided copies of the audit reports for 2003 and 2004 — both of which had been completed, it turns out, before my client asked for them. The SDRA’s position is that the audits were — and for 2005 and 2006 still are — being held up by the city’s audits. What’s so astonishing about that position is the fact that the SDRA and the city are separate legal entities; the SDRA is technically a state agency run locally. What financial mismanagement is the SDRA and the city hoping to cover up by issuing a consolidated audit that treats two separate entities’ finances as one? (Here’s a fun fact in light of recent events at city hall: The first signature on the two audit reports belongs to Jim Waring. For those of you who didn’t know, until last week Jim was also the SDRA’s Assistant Executive Director, immediately under Executive Director Jerry “I’m-laying-here-on-a-beach-in-Hawaii” and “I-soon-will-be-throwing-Jim-under-the-bus” Sanders.)
2) The SDRA owes the city roughly $250 million in loans. Nobody knows the repayment terms for the loans — a flaw noted by the Independent Budget Analyst last May as the Southeastern Economic Development Corporation was seeking approval of a $42 million bond. The last time I checked, the city could use a quarter-billion bucks to help it with its own debts.
3) The SDRA has not rendered a formal accounting on its affordable housing trust fund for at least the last five years. Further, the SDRA is supposed to take 20 percent of the gross additional property-tax dollars generated through redevelopment and use that money to provide affordable housing, but the 2003 and 2004 audits both noted that the SDRA was taking 20 percent of the net amount — after tons of administrative and other charges — and blamed the bad math on the lack of a written policy for calculating 20 percent of the gross additional property-tax dollars. (Honest, that was the excuse!) The note caught my attention for two reasons. On the one hand, the miscalculation was important enough to mention and yet the auditors expressly said that the amount wasn’t big enough to be worth reporting. If the amount of the miscalculation wasn’t a big deal—apart from violating the law, of course — then why did the auditor note the miscalculation in the first place? On the other hand, nothing in the audit report indicates that the shortage has been put back into the trust fund. If the problem had been corrected, there would have been a note saying as much.
(To prevent future miscalculations, perhaps Carl DeMaio’s Performance Institute could help the SDRA amend its procedures manual to state: “The amount to be deposited into the affordable housing trust fund is 0.2 multiplied by X, where X represents the gross additional property-tax dollars received for each fiscal year.” Given Carl’s reputation, he’ll probably recommend that the SDRA outsource the task; government will save a bundle that way.)
4) The Centre City Development Corporation is living large, while SEDC wanes. SEDC has so few people working for it that it has a formal arrangement with the SDRA for staff support, but CCDC doesn’t have such an arrangement. So, either SEDC needs more resources in order to do its job, or CCDC has too many people on staff and should be cut back and instead use SDRA’s staff. (I suppose that one answer to the disparity could be that CCDC’s success is more important than SEDC’s success, but I’m not prepared to accuse anyone of discriminating against SEDC (District 4) in favor of CCDC (District 2). If anything’s certain, it’s that the people and businesses in District 2 and District 4 are treated with equal fairness and concern by the leaders at city hall.)
5) Fred Sainz, the mayor’s propagandist, is rubbing off on Carolyn Smith, SEDC’s director. Just read this article, where VoSD reported that the 4 percent pay increase sought by SEDC for fiscal year 2008 was really a 13.5 percent increase in disguise. I’m not saying that the hard-working folks at SEDC do not deserve a pay increase. I am saying that our leaders are continuing their legacy of not being straight with the public about how the public’s money is being spent.
Now, I will confess that I do not know many of the folks in the SDRA, SEDC, or CCDC; most of what I know comes from public records and news reports. I do work with lots of people in the community who work with redevelopment staffers on housing, employment, and small-business issues, and those people assure me that the staffers are dedicated to using redevelopment to improve everyone’s lot (not meant in the real-property sense). I’m sure that’s true.
Indeed, the main problem with redevelopment, like so many of our other governmental problems, is the lack of leadership and dedication to the public interest. I strongly believe that government should promote redevelopment in a way that gives everyone in the process a reasonable chance of doing well. But I don’t see any reason to promote redevelopment under the auspices of creating jobs when the new jobs don’t pay employees enough to afford a place to live close to where they work, or when the redevelopment makes traffic and pollution worse, or when the redevelopment transfers land from local, family-owned businesses to chain stores and corporate interests, or when the redevelopment displaces persons with limited economic means without providing them with adequate relocation assistance. Our leaders pay lip-service to these concerns, but lip-service is as far as it goes.
Redevelopment was intended to be a way of revitalizing communities. Increasing the profits for those who can already afford to get into the game has become our leaders’ primary motivation in their redevelopment decisions. Maybe we should fire the leaders and give the staffers a chance to run the show. They certainly cannot do any worse. And given the recommendations I’ve heard from folks I trust, I’ll bet that the staffers will do an even better job.
We should try it. The worst that could happen is we’d save a ton in executive compensation! (The savings might even make a dent in the shortfalls in the affordable housing trust fund.
— CORY BRIGGS