Was the “Free Lunch” Really Free?

       Professor George Lefcoe of the USC Law School loves redevelopment, which is his prerogative, of course. But as he goes about acting as cheerleader for that widely despised process, perhaps he ought to be a little more careful about his factual conclusions. In his latest article, Redevelopment Takings After Kelo: What’s Blight Got to Do With It? 17 So. Cal. Rev. L. & Soc. Justice  803 (2008) Professor Lefcoe offers a number of “urban renewal success stories” even though he concedes as he must, that “these projects came at a high price in tax dollars and evictions. Whether they could be justified on a cost benefit basis is debatable. That they produced substantial civic benefit is not” (id. at 836). Oh really? That all depends on whom you ask, how you measure “success” and how you define “benefit,” doesn’t it? Like, is Professor Lefcoe thinking of net benefits, after considering both the economic and social costs of the project, or is he just thinking about the benefits alone? Besides, if a project fails the cost-benefit test, i.e., where the sum of all its costs exceeds its benefit, can it be counted as a “substantial benefit,” civic or otherwise? What do you think?          

         Case in point: the Los Angeles’ Bunker Hill redevelopment that Professor Lefcoe lists among his examples of successful redevelopment projects. Successful? Bunker Hill? For the benefit of readers who have had better things to do in life than to follow the adventures and misadventures of the Bunker Hill project, here are a few additional facts.

             There is no question that the Bunker Hill project produced the familiar, downtown cluster of glassy high rises in the center of Los Angeles. But as the readers of this blog know, there ain’t no such thing as a free lunch, and here the price was steep. And we don’t just mean the fate of those poor souls who got kicked out of their Bunker Hill homes, back in the days when there were no relocation benefits, so that residential condemnee-tenants and small business owners got nothing. One effect of the Bunker Hill redevelopment project was the economic destruction of the nearby commercial Los Angeles downtown center, notably Spring Street, known before then as “the Wall Street of the West.” As the businesses located there moved out and relocated to take advantage of the new, subsidized facilities being built on Bunker Hill, they left behind a swath of shabby, urban blight that has been resistant to improvement ever since. How long has it been this way? Let’s put it this way, your faithful servant began practicing law in 1964, and his firstest court appearance was on some godforsaken motion having to do with the taking of the last house on Bunker Hill. Now, your servant is a retired geezer, close to a half-century has gone by, and there is still vacant land on Bunker Hill.

             And as for Spring Street, it remains blighted in spite of the redevelopment agency’s repeated efforts to revive it. At one point the agency had to refund the purchase price to some poor suckers who bought condos in a converted Spring Street office building, only to realize after moving in, that they were now living in the midst of urban blight. So has anyone toted up the cost of the economic destruction of the Spring Street area? The uncompensated losses suffered by the erstwhile inhabitants of Bunker Hill? The lost tax revenues that were foregone while the land taken on Bunker Hill sat there vacant and unused for decades? Not as far as we know. It’s a lot easier to point to those Bunker Hill high-rises, and say that they’re just swell. Well, they may be swell for somebody, but in terms of their overall, objective benefit to the city that created them by subsidizing their developers, the jury is out, and it ain’t coming back. So the bottom line is that we don’t know whether the overall impact of the Bunker Hill project was positive, or whether its detriments outweigh its benefits. Remember that even without that redevelopment project, the Bunker Hill area abutting on L.A.’s civic center, would have been redeveloped privately, at least in part, as were other areas in Los Angeles, and that too has to be figured in to get an accurate picture. 

           We could stop here, but we won’t. “Los Angeles” is not just a city – the area loosely called Los Angeles is more of a region. with many cities and redevelopment projects. Have those been uniformly successful? Not on your life. Space limitations preclude going through their misadventures in detail, but we should at least list some of the problem children among them. There have been major redevelopment failures in Hawthorne, Redondo Beach, Pasadena and North Hollywood, to name a few. The last one alone went through $117 million and produced nothing – the Los Angels Times blew the whistle on that caper and disclosed that the NoHo redevelopment area was worse off after 20 years of redevelopment agency’s efforts than similar, surrounding areas that did not receive the “benefit” of agency ministrations. Oh yes, we almost forgot. The agency did accomplish one thing: it inspired such fury on the part of NoHo residents that, fearing for its safety, it had to move its office to a more secure location. With successes like that, who needs failures? 

           So all things considered, was the Bunker Hill redevelopment a “substantial civic benefit”? You tell us.

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