New Development Agency Raises Questions

Without doubt, Civic San Diego is the new model of redevelopment. Yet it is being created without the standards on economic development, affordable housing and community engagement that state law provided.

The City Council voted Monday to restructure and rename the downtown agency, Centre City Development Corp., to Civic San Diego, to shift its purpose from redevelopment to economic development, land-use permitting and project management. The Southeastern Economic Development Corp. will be made a subsidiary of Civic San Diego, and the southeastern area will lose its independence. Other project areas like City Heights, North Park and San Ysidro are left behind.

This raises significant questions regarding the role and responsibility of continuing the shell hollowed of the key ingredients of redevelopment.

1. Economic Development

Economic development is in the eye of the beholder (or the football fan). My numerous analyses, which have been independently verified by a performance audit, reveal that CCDC has had a questionable record on job creation. This is important since redevelopment was defined in state statutes, with specific parameters of what could and could not be done, and defined the fundamental purpose to “expand employment opportunities for jobless, underemployed, and low-income persons.” However, CCDC did not fare well compared to its peer agencies in this regard.

An independent performance audit (following the Nancy Graham scandal) affirmed the concern that CCDC is too focused on lifting up buildings rather than lifting up people:

“There appears to be little disagreement that CCDC has met and often exceeded expectations related to facilitating infrastructure improvements in the Centre City and Horton Plaza project areas. However, it does not appear that CCDC has promoted economic development or social service delivery to the extent that CCDC’s peers have — this represents one of the most cited concerns by community stakeholder groups, which at times expressed criticisms that CCDC is primarily orientated to facilitate development and thus, caters to developers.”(Szoberg Evashenk, CCDC Performance Audit, July 2009)

Not only has the record of CCDC on jobs been dismal, little was being done to address employment quality for future jobs. A third of the jobs created in the next two decades in downtown were projected to be low-income, according to a study on the community plan in 2004, with almost 80 percent of hotel workers, and 69 percent of retail workers having a household income below the low-income mark. Put in the perspective of redevelopment, demand created for affordable housing by low-income jobs was seven times the rate of affordable housing for low-income households created in downtown.

2. Affordable Housing

Since California redevelopment law required CCDC to dedicate a fifth of all TIF to the provision of affordable housing, it is a fair question where future funding sources will have similar mandates. These funds have been spent on many affordable housing projects, particularly the permanent homeless shelter. Although a consulting agreement provides for Civic San Diego to continue the affordable housing activities for the next four years, the purpose of the organization, as written into the articles of incorporation and bylaws, do not mention affordable housing. Also unclear are the delineation of the roles and responsibilities between Civic San Diego and the San Diego Housing Commission.

This is a significant concern. Civic San Diego has no goals and no requirements to ensure that at least 15 percent of the housing stock under its jurisdiction is affordable to low and very-low income families. No requirements to ensure that at least 30 percent of housing developed by the new entity would be affordable. No requirements to ensure that 20 cents on every dollar raised by the new entity would be spent on affordable housing.

3. Community Engagement

CCDC operations were limited to redevelopment project areas. The proposed articles of incorporation and bylaws of Civic San Diego remove all references to redevelopment, and substitute with contracted services for the city of San Diego. The corporate structure approved by the City Council allows for citywide economic development by Civic San Diego. Although the four-year consulting agreement limits its permitting authority to downtown, there is nothing in the organizational documents that limits the geographic focus of any operations. Nothing in these documents prevents the City Council from approving another “consulting agreement” to extend the permitting authority of Civic San Diego to any neighborhood in the city, whether or not it was a redevelopment project area.

The extension of authority of this downtown consulting group into southeastern San Diego may just be the beginning. Communities across the city are wary about the reach of this downtown agency: is it just a change in name, or a reincarnation of CCDC with much broader powers? In what way would community input (such as that from Project Area Committees) be institutionalized? Could this agency be potentially contracted to re-write the planning and zoning codes in other parts of the city?

Civic San Diego is essentially a government contractor paid by permit processing fees, and whatever it can skim off administrative costs from redevelopment leftovers. It poses an inherent conflict of interest in that it is financially dependent on permit fees, so regardless of whether a project serves the public interest, Civic San Diego will have a financial interest in approving it.

These are quite fundamental questions about the future of the city. Questions that should engage stakeholders and communities through a process of respectful input, rather than a Friday afternoon supplemental docket, for a last-minute City Council hearing that few in the community can attend. This is not about winding down a defunct redevelopment agency; it is about creating a new model of redevelopment for the city. It is not about continuing CCDC. It does not make sense to create Redevelopment 2.0 without any standards to ensure good quality jobs, affordable housing and community engagement. It needs for work for everybody.

Murtaza Baxamusa is an adjunct lecturer with the Sol Price School of Public Policy, University of Southern California; and the Director of Planning and Development for the San Diego Building Trades Family Housing Corporation.

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