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Tuesday, Sept. 2, 2008 | Last month, as San Diego’s redevelopment drama was approaching its peak, a Union-Tribune reporter asked Mayor Jerry Sanders a simple question: Were the problems at the Southeastern Economic Development Corp. and the Centre City Development Corp. caused by a few bad apples or were they the result of the city’s decision to outsource its redevelopment efforts to autonomous, private corporations?

Sanders blamed the bad apples, and claimed that the underlying model was sound. Yet we shouldn’t simply take the mayor’s word, and instead give the question more thought.

As has been oft-noted in the coverage of the redevelopment saga, San Diego imported the idea of using quasi-government nonprofits to manage its urban renewal from Baltimore. Therefore, our first step should be to a look at Baltimore, to see whether it has suffered any of the same problems.

In a recent column, Peter Q. Davis, the former chairman of the CCDC board, described the decision to look east in this way:

A study was done on how other cities were addressing similar problems (of downtown blight) and it was found that several different forms of government involvement were being used with various degrees of success. One city with tremendous challenges, which seemed to be making the most headway, was Baltimore. A visit to that city by San Diego civic and elected leaders led to a consensus that their way would be the best for San Diego.

Baltimore had chosen to place their downtown redevelopment operations under a separate corporation reporting to the City Council rather than as a city department. The reason was to develop confidence in the private sector, whose financial commitment would be a required part of a successful undertaking. It was felt that private firms were reluctant to deal in a bureaucratic environment and would be more comfortable dealing with a corporation headed by private-sector business people, who would not be under the binding and time-consuming restraints that dealing with municipalities often involved.

Davis is right in that, throughout the 1970s, Baltimore was seen as model for urban renewal. And, if you believe that competitive bidding, accountability of redevelopment departments to elected officials, and requirements for public participation characterize a “bureaucratic environment,” Davis’ narrative is generally correct. However, he leaves out some important details.

Baltimore’s plan to delegate redevelopment to a system of 24 quasi-public entities — known as the “quasis” — was intended, by its design, to insulate redevelopment from political control and from the public. Instead of the City Council, decisions about redevelopment would be made by private entities controlled by Mayor William Schaefer and his developer allies, who could make decisions with “speed, flexibility, and minimal public scrutiny,” according to scholar Marc Levine.

When SEDC Chairman Artie “Chip” Owen recently told fellow board members that “they had an obligation to SEDC as a corporation first and foremost, then to the community, and then to the city,” he was absolutely right. That’s how SEDC is designed — and that’s what the Baltimore model intends.

As Levine wrote in 1987 (with internal citations omitted):

[Baltimore’s] mayor assured would-be corporate participants in his renaissance plans that “Baltimore wants you so badly, we’ll let you write your own terms.” As the city’s chief economic development official said: “I think corporations appreciate being able to work with us because we’re here to smooth the way. …”

To send a signal to the business community that Baltimore was a “pro-business” city, that business development priorities were placed above social spending, and that business could count on a local government sympathetic to their interests, Schaefer implemented a “Spartan” fiscal policy, in real terms, the mayor slashed municipal spending by 20%, while real expenditures on “economic development” rose by 400%.

So, by importing the Baltimore model, did San Diego also choose to import the underlying philosophy and priorities it engendered? And are these the right priorities for our city today?

Many Baltimoreans surely didn’t share Schaefer’s vision for their city. Critics of the quasis derided them as a “shadow government.” And the most important qausi, the Baltimore City Trustees Loan and Guarantee Program, a development bank run with complete autonomy by two mayoral appointees with the power to package various governments funds (including the federal Community Development Block Grants), was shut down by the mid-1980s.

In the 1980s, an important report pronounced that there was “rot beneath the glitter” of the city’s waterfront redevelopment, and observers noted that Baltimore was “a Third World city in the First World,” marred by social exclusion and racial inequality.

Even if we still believe in the Baltimore model, it’s not clear we need CCDC and SEDC. Baltimore turned to nonprofits because they could do things like avoid public disclosures and do away with competitive bidding, which the city itself was forbidden from doing by its city charter. In San Diego, our nonprofits face the same open-government requirements as the city, and the California Community Redevelopment Law already allows the city council, sitting as the Redevelopment Agency, to negotiate with developers without a competitive bid.

Yet, if Baltimore is not the vision we want for our city, we should not rush to embrace the redevelopment system of San Francisco and Los Angeles. While neither city has the equivalent of a CCDC, both delegate control over their redevelopment agencies to appointed commissions. During the cities’ redevelopment booms, these commissions were stacked with downtown boosters and corporate executives. In San Francisco, the redevelopment agency ran roughshod over the elected Board of Supervisors by “snowing” the officials with so many studies and reports that they could rarely keep up. As a city official wrote to the mayor in 1967:

In important ways, the Redevelopment Agency has become a government within a government. It already has too broad a range of responsibilities for effective control to be exercised by the Mayor and Board of Supervisors.

To co-opt leaders of the black community, which bore the brunt of displacement that resulted from the city’s redevelopment efforts, San Francisco’s agency awarded the city’s top Baptist churches nonprofit housing development rights. (If you’re looking for comparisons, Carolyn Smith, the deposed head of SEDC, was the daughter of the prominent Rev. George Walker Smith.)

San Francisco’s mayor and city manager eventually stripped the redevelopment agency of its independent clout, and Dianne Feinstein centralized control over urban renewal in Mayor’s Office of Community Redevelopment.

In Los Angeles, a City Council attempt to dissolve the independent board of commissioners for the city’s Community Redevelopment Agency failed by just one vote. In 1991, the elected officials did pass an oversight reform ordinance essentially eliminating the agency’s autonomy and giving the city council final say over all agency decisions.

As the citizens of San Francisco and Los Angeles — and even Baltimore — eventually decided, the absence of accountability and the lack of public participation may indeed make for effective urban redevelopment, but they don’t make for a good city government. Which do San Diegans want?

Vladimir Kogan is a doctoral student at UCSD’s Department of Political Science. His e-mail address is vkogan@ucsd.edu.

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