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San Diego’s downtown redevelopment agency faced a simple question with a $6 billion answer.

Was downtown broken or fixed?

For more than three months this summer, a consultant hired by the agency, the Centre City Development Corp., worked on an answer. It concluded that downtown San Diego was broken.

All that was left was the proof. A preliminary draft of the study has little.

To be sure, the study wasn’t finished. It was left undone after a late-night, last-minute deal in the California Legislature circumvented the public process that the study was supposed to kick off, one that would have justified CCDC’s continued existence. Instead, the legislature in October eliminated the limits on downtown redevelopment without showing that neighborhoods remained rundown or blighted.

Under the new state law, CCDC will exist until 2043 — about 20 years longer than it would have otherwise — and grab a substantial share of an estimated $6 billion in future downtown property taxes.

The study in its current form does nothing but add to burgeoning questions about the deal’s legitimacy and the core mission of redevelopment agencies, such as CCDC.

Redevelopment’s purpose is to fix broken neighborhoods by using tax money to spur private investment. Then redevelopment is supposed to go away.

If downtown is no longer broken, should it receive tax money that otherwise would go to different city neighborhoods, San Diego County and the state? If downtown is no longer broken, did the state legislature create an illegitimate kitty for development subsidies? If downtown is no longer broken, is there a better use for $6 billion?

Similar questions about downtown blight form the foundation of two lawsuits filed recently against the state law.

Michael Jenkins, an attorney and former senior city redevelopment official, said the study appeared to be generic with few specifics about downtown — a “boilerplate approach.” Thirty-five years of downtown redevelopment has led to the revitalization of the city’s Gaslamp Quarter and building of city landmarks like Petco Park and the Horton Plaza mall. Given that history, Jenkins said, the study ultimately would have needed significant rigor to prove those neighborhoods remained rundown.

The Legislature’s bill could have been an attempt to get around that process, he said.

“It could very well be that this amendment to the law was undertaken because there was some concern about whether the area would properly qualify,” Jenkins said.

Outgoing CCDC head Fred Maas warned against reading anything into the study as written. Early drafts of studies, he said, often look substantially different than their final versions and have significant errors.

Any conclusion, however, that parts of downtown still need fixing is obvious, he said.

“There’s certainly areas of downtown that are blighted,” Maas said. “No question about it.”

Maas said he hadn’t even read the study because he believed it was so preliminary.

Still, Maas’ agency tried to keep the study secret.

First, CCDC denied a voiceofsandiego.org public records request for it. The agency cited a provision of the state’s public records law exempting drafts from public view if those documents aren’t ordinarily retained and the public interest in secrecy outweighs the public interest in disclosure.

In response, VOSD noted the exemption is designed to provide privacy for matters with action pending. In this case, CCDC had already cancelled the study — it was no longer pending. Further, the court found that documents where the public has a substantial interest in disclosure should be revealed even if they’re drafts.

CCDC yielded a bit. Citing the same public records exemption, it released parts of the study, but not the whole thing. Only after VOSD said it would publish a story on the agency’s refusal did CCDC release the full study.

The reason for secrecy? Keeping the study private would “prevent the misleading of the public based upon preliminary analysis and discussion,” wrote Frank Alessi, CCDC’s chief financial officer, in a letter.

“The Corporation believes that there are significant public interests that are served by not disclosing very preliminary draft documents that have not been developed, which might contain erroneous opinions or information and which might not represent the actual views and recommendations of the Corporation,” Alessi wrote.

The study, however, wasn’t supposed to represent CCDC’s opinion, but rather the opinion of an outside expert hired to determine if CCDC should still exist.

Also, the full document later showed some of CCDC’s redactions were inexplicable. The agency blacked out the word “study area” and its definition as well as placeholders for specific examples of blight, such as “insert/describe SCS Engineers’ Study results here.”

Before releasing the full draft study, CCDC released
a redacted version of it.The yellow higlighted area shows
an original redaction. Click the image above
to see what CCDC redacted.

Now that CCDC has released the study, the agency’s spokesman also promised to reveal the consultant’s notes.

In its current form, the study doesn’t back up the blight claims. Instead, it declares on several occasions that downtown remains rundown. It only provides simple crime statistics as evidence. Beyond that, the study mainly calls for examples to back up its assertions to be filled in later. For instance, a section on unsafe or unhealthy buildings ends with “insert examples here.” Maas has said the agency only was weeks away from presenting a finished study to council when the state legislation passed.

Two officials with the consultant who performed the study, Keyser Marston Associates, couldn’t be reached for comment. CCDC spent $162,000 on the company’s work.

After the state law passed, Brian Trotier, head of CCDC’s sister agency handling redevelopment in southeastern San Diego, questioned if CCDC could prove downtown remained rundown. After reviewing the draft study, he remained unconvinced.

“That report doesn’t change anything because that report doesn’t show you anything,” Trotier said.

The agency’s outside legal counsel has argued the Legislature didn’t need to address the blight question to give CCDC access to more tax money.

Maas said the remaining blight downtown never came up in conversations he had prior to the bill’s passage.

State legislators had their opportunity to discuss remaining blight downtown before passing the law, Maas added. They decided to pass the law without waiting for a blight study.

“It may be right or it may be wrong, but I didn’t see a delegation from San Diego making a trek to Sacramento to have a blight rally,” Maas said.

Courts have been willing to overturn redevelopment in areas where blight wasn’t proven. A state appeals court 10 years ago rejected a redevelopment designation in an affluent suburban Los Angeles city after the court decided the area the city wanted to fix wasn’t broken.

“The purpose of the [California redevelopment law] is to provide a means of remedying blight where it exists,” the court wrote in its decision. “The [law] is not simply a vehicle for cash-strapped municipalities to finance community improvements.”

In San Diego, much of the rhetoric surrounding the state law’s passage has focused on it allowing the city to receive more tax dollars and create jobs, not eliminate blight downtown. Newfound redevelopment money is expected to help pay for a new Chargers stadium and an expanded Convention Center should one or both be approved.

Jenkins, the former city redevelopment leader, had sympathy for the argument that San Diego doesn’t receive its fair share of tax revenue from the state. Elected officials have to balance that concern with what’s required in the spirit of redevelopment law, he said.

“That’s ultimately the real question here,” he said. “Is this the process that we want to have happened for such a monumental decision to be made?”

Discussions about extending CCDC’s life began 18 months ago, but lay dormant until a Chargers official said in December 2009 an increase was needed to pay for a potential downtown stadium. In June, the City Council approved spending $500,000 for the Keyser Marston study amid some concern about the impact to other city neighborhoods. A decision on increasing CCDC’s potential tax revenues was supposed to take a year to 18 months.

But two months after the council action, local Republican Assemblyman Nathan Fletcher and Mayor Jerry Sanders began discussing state legislation to lift downtown tax limits without a study. Fletcher’s bill didn’t become public until the night before state legislators passed the budget in October, angering City Council members, City Attorney Jan Goldsmith and county leaders who all were left out of the deal.

Fletcher, Sanders and CCDC agreed to a series of public meetings on the state legislation’s effects after intense criticism for orchestrating a secretive maneuver on a decision without knowing the impact on numerous agencies’ bottom lines.

Correction: The original version of this story said CCDC spent $162,000 on consultant Keyser Marston’s work. But other consultants should’ve been included in that total, too. Invoices Keyser Marston submitted to CCDC show the consultant billed for $104,000.

Please contact Liam Dillon directly at liam.dillon@voiceofsandiego.org or 619.550.5663 and follow him on Twitter: twitter.com/dillonliam.

Liam Dillon

Liam Dillon was formerly a senior reporter and assistant editor for Voice of San Diego. He led VOSD’s investigations and wrote about how regular people...

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