With the shutdown of its Community Redevelopment Agency (CRA) early this year, Los Angeles—like all California cities—finds itself without the usual financial tools aimed at revitalizing communities and generating new revenue. However, LA won’t take it lying down.
The city is now in the process of building a new agency that would fulfill the same goals—without the accompanying allegations of inefficiency and corruption that plagued its almost 70-year-old predecessor.
The dissolution of the CRA, said Miguel Santana, city administrative officer, “provided the city an opportunity to look at redevelopment and economic development entirely differently. We saw it as a chance to figure out how we can be more effective in bringing about economic development.”
At the end of June, LA City Council gave conceptual approval to start work on a new entity that comprises an Economic Development Department and an accompanying economic development nonprofit. The setup was modeled after agencies in other major cities.
In Chicago, for example, the Department of Housing and Economic Development oversees land-use plans and policies that spur business and job creation while the Department of Business Affairs and Consumer Affairs has “business consultants” that help local business owners with permits or licensing issues. The mayor of Chicago serves as chairman for World Business Chicago, a nonprofit corporation that oversees city economic development.
San Diego has the Economic Development Division and the Mayor’s Office of Economic Growth; New York has the New York City Department of Small Business Services, which teams with the New York City Economic Development Corporation; Austin has the Economic Growth and Redevelopment Services Office, which contracts with various nonprofits and uses tax-increment financing, bonds, and tax incentives.
In Los Angeles, said Santana, “The nonprofit corporation is really about strategic planning, development, identifying partners, funding, goal setting and targets. The economic department is really about the implementation of those ideas.”
The city hopes that contracting with a nonprofit will afford more flexibility and creativity, because the entity will not have to go through the government bureaucracy. Of course, Santana is quick to confirm, the mayor and the City Council will still be the ultimate decision makers.
The city is searching for a consultant to help them develop a more fleshed-out proposal for City Council approval in January 2013. That consultant should be announced within the month. According to Santana, the city is also hammering out a set of objectives that the new entity would fulfill.
Gerry Miller, the city’s chief legislative analyst, said that the city will soon “have a full report and a lot more substance in order to recommend how to proceed.” The city wants its plan to be running by July 2013. In the meantime, Santana said, “This year is going to be about putting it together, identifying goals and objectives, laying out the framework and finding a way of funding it.”