The Morning Report
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Thursday, Feb. 19, 2009 | Mayor Jerry Sanders’ office is considering eliminating or consolidating the city’s two nonprofit redevelopment agencies: the Centre City Development Corp. and the Southeastern Economic Development Corp.
The two agencies are unique in California and have both been subject to scandal and upheaval within the last year: CCDC for the undisclosed financial relationships of its former president, Nancy Graham; SEDC for the clandestine bonus system created by its former president, Carolyn Y. Smith.
The Mayor’s Office is developing a plan for more direct oversight of the two nonprofits. The examination will go further, said Rachel Laing, a mayoral spokeswoman, and also evaluate whether the agencies should be reorganized.
“We’re taking a holistic look and trying to figure out whether this is the best structure,” Laing said. “Those are two possibilities that have to be considered.”
If the agencies are eliminated, their duties could be folded under the auspices of the city’s existing Redevelopment Agency, which currently oversees revitalization projects in neighborhoods such as Grantville, North Park and City Heights. The Mayor’s Office is also considering whether it can gain efficiencies from consolidating SEDC and CCDC into one nonprofit.
Any recommendation to reorganize the agencies will likely draw protests from the City Council members whose districts cover the redevelopment areas. City Councilman Kevin Faulconer said he believes CCDC’s specific attention to revitalizing downtown has proven advantageous.
“I’ll certainly look at anything the mayor’s folks come out with,” Faulconer said. “But the specific geographic focus of CCDC has been successful.”
City Councilman Tony Young said he did not want to see SEDC disbanded. He said getting rid of CCDC made more sense because much of downtown’s redevelopment work is already complete.
“Give SEDC a chance to do what it was set up to do,” Young said. “SEDC needs a chance to be able to be successful and I’m not going to allow anybody to just disband an agency that serves my district.”
Laing said that no decisions have been made about the agencies’ future and none would be until after auditors complete a performance review of CCDC, which is due by May.
The reorganization discussion is causing CCDC to delay its search for a new president. CCDC Chairman Fred Maas said the agency didn’t want to launch a national search at the same time the city was considering a reorganization.
“It’d be damaging to our reputation and the city’s reputation that we’re soliciting applications for candidates but by the time (they start) the organization could disappear or appear different than at the beginning of the search process,” Maas said.
SEDC’s board is pushing ahead with its search for a new top executive. SEDC Chairman Cruz Gonzalez and Brian Trotier, SEDC’s interim leader, both said they were unaware of any effort to reorganize the agency’s functions. “That’s the first I’ve heard of it,” Gonzalez said. “The mayor has not told me he’s considering disbanding SEDC.”
A City Council subcommittee will discuss on March 23 whether to amend CCDC and SEDC’s operating agreements to create more direct oversight of the agencies. The two function as separate nonprofits and do not directly answer to Sanders, though they are city agencies. The agencies’ boards are appointed by the mayor; the boards select their presidents.
Last summer, in the midst of the SEDC bonus scandal, Sanders and three City Council members called on Smith to resign. She resisted. She was fired in July by the SEDC board but did not leave the agency until September.
The Mayor’s Office is deliberating about how to tighten oversight in the wake of that. No decision has yet been made, Laing said. “There needs to be a hammer in the city’s hand that can be wielded,” she said.