Earlier this month California Governor Jerry Brown proposed— among $12.5 billion in budget cuts— eliminating the state’s over 400 redevelopment agencies, instead redistributing their funds directly to cities and counties. The move, if passed this spring, would disband the agencies as soon as July.
Brown hailed the proposal as a limit to the state’s bloated bureaucracy and a necessary evil in budget-strapped times, and there is no shortage of opinion on the idea: Some claim that redevelopment funds deliver money to much-needed areas that would otherwise be ignored by investment; others that they deliver corporate charity and are playgrounds for corruption. But for the design community the consensus is pretty straightforward: the move would be a disaster.
“I can’t imagine this is going to happen. There’s just going to be so much outcry,” said architect Alice Kimm of LA-based John Friedman Alice Kimm Architects, who calls the decision “bad news.”
The Los Angeles Community Redevelopment Agency (CRA/LA) just awarded Kimm’s firm a contract to design the city’s three-acre Clean Tech Innovation Campus—75,000 square feet of office and demonstration space for clean tech research and development companies located inside an existing masonry building— which would be the focal point for the city’s Clean Tech Corridor, just east of Downtown LA. While the CRA is working on the project with the city’s Department of Water and Power, Kimm doesn’t know if the project is still going forward. “I’m a little bit worried now,” said Kimm.
Evan Westrup, a spokesperson for Governor Brown, said that current redevelopment projects will continue. Meanwhile cities like LA are creating agreements with their redevelopment agencies to protect present and future projects (LA’s agreement would put away $930 million for such work). But Kimm still doesn’t know for sure.
“I’m not going to say the CRA is the most efficient agency, but the work they do is super important. Who is going to take over that work?” she said.
Despite their inefficiencies redevelopment agencies provide a huge amount of work to architects and builders, and their removal, say architects, would be like pulling out the rug just as a modest recovery was starting to take hold. The California Redevelopment Association reports that redevelopment activities support over 170,000 construction-related jobs a year. Moreover the move would stall or cancel billions of dollars worth of major projects in cities statewide, from buildings to parks to mixed-use complexes to entire neighborhoods, like the Clean Tech Corridor.
Ron Vrilakas, principal at Vrilakas Architects, estimates that if Brown’s proposal is passed his firm will lose work on about $40 to $50 million in projects and will have to lay off much of his staff. “The only work that’s still got life in the last 18 months is work that has a public financing component, and specifically redevelopment agency funding,” he said. “Without those it’s a pretty grim result.”
Vrilakas adds that without CRA funding his city will continue to sprawl rather than develop in a sustainable way, with infill and the redevelopment of underserved neighborhoods. “We have a delivery system of development that’s built around sprawl. That’s the path of least resistance,” said Vrilakas, who said he’s open to taking a look at cutting the agencies, but finds their “full scale elimination” to be “draconian,” and “short-sited,” depriving cities of much-needed investment.
“What other department has been singled out to be eliminated entirely?” he said.
Westrup argues that the measure will not completely obliterate redevelopment funding, but that it will “return power to the local level,” giving cities the choice of what to do with redevelopment funds. “Essentially it eliminates a state subsidy for private development,” said Westrup. “It doesn’t preclude cities from continuing to redevelop; it gives cities the choice of where their scarce dollars would go.”
As for the hit on future investment, a recent California Legislative Analysis Office (LAO) report on the budget states that “the state’s costs associated with redevelopment has grown markedly over the last couple decades, yet we find no reliable evidence that this program improves overall economic development in California.”
But while he admits that some redevelopment agencies are “dysfunctional,” LA architect Roger Sherman is very impressed with the economic turnarounds produced by others, including Culver City, where he is working on a $13 million mixed-use project that was funded in part by the Culver City CRA.
He adds that much of Culver City’s impressive recovery—and its resulting tax windfall for the city and state— was made possible by the work of the local CRA. “It’s very hard to generalize. In some cities they’ve been very effective,” said Sherman. “It’s all about execution.”