Beware Redevelopment “Reformers” Bearing Gifts

As we noted earlier, no sooner did the ink dry on the California Supreme Court’s opinion upholding recent legislation abolishing redevelopment agencies, that the snakes started crawling out of the woodwork, with proposals to revive this wasteful and widely despised government practice. The latest comes from a fellow named William Fulton, former Mayor of Ventura, now a senior fellow at the Sol Price School of Public Policy at USC, and a “planning consultant.” Fulton took to the pages of the LA Times to instruct the Great Unwashed on the virtues of redevelopment so it can be restored more or less to its status quo ante, only more so. William Fulton, Getting Real About Redevelopment in California, L.A. Times, January 12, 2012 — click here  How does he propose to do that?

Fulton proposes a revival of redevelopment, subject to three “key reforms.”

First, that redevelopment be used only for “true” revitalization — like elimination of brownfields, construction of affordable housing, transit-oriented development, and “inner-city retail” where there are few stores (and never mind why there are few stores in those areas). And who would get to say what requires “true” revitalizatiion? Fulton tells us not.  Second, that tax-increment money should be capped “perhaps at 5% of property tax.” And third — ta-da! — “we should eliminate the requirement that to be redeveloped, an area must be officially deemed ‘blighted'” because “the truth is that the blight-finding is usually a fiction, a vestige of urban renewal days that cities regard as a procedural step they must take in order to gain access to the tax-increment [money] flow.” Golly. And here we thought that a finding of “blight” is the sine qua non of redevelopment, without which the prefix “re” in “redevelopment” would be missing, and it would be just plain old private development.

In other words, what Fulton saves as the bottom line of his proposal, is the conclusion that the use of “blight” as justification for redvelopment has been a fraudulent fiction. But instead of restoring it to the status of an honest safeguard, an enforceable legal reality, Fulton would just get rid of it and leave the often unelected city hall boys in any one-horse burg to take whatever private property they want for any reason or no reason other than it seems like a good idea at the moment, so they can turn it over below cost (or even gratis) to their redeveloper-buddies who presumably will do wonders with it by way of “affordable housing” and urban revitalization that — in spite a half-century of redevelopment efforts — never materialized. American cities have steadily lost population and declined, and continue doing so now.

What is most significant about Fulton’s argument and what tips his hand is that in spite of his vague and by now ritualistic criticisms of redevelopment, he never mentions specific abuses of the eminent domain power which over the years has become an integral part of redevelopment, nor the gazillions in in public funds wasted or just frittered away for nothing, a phenomenon that of late has been part and parcel of California redevelopment, and the subject of Los Angeles Times exposes. Not a peep about that, nor any mention of how Fulton proposes to bell the cat — how he means to insure that this does not happen again.

All of this is only another illustration, if any were needed, that as practiced in America for the past half century or so, urban redevelopment — the taking of land from A in order to give it to B, in spite of constitutional prohibition — is immoral in concept, a corrupting influence on municipal governance that is ineffective in execution, and a prime candidate for being done away with root and branch. California has just achieved that very thing. So let’s leave well enough alone and  let the no-redevelopment system operate for a while and see how it works. Maybe it will improve things. But if not, it can’t be worse than the wasteful and often corrupt method of syphoning off public tax revenues into the pockets of crony redevelopers and holders of tax-free redevelopment bonds, while American cities continue decaying. Certainly, converting redevelopment into a private, money-making free-for-all in which elimination of blight or any other discernible “public use” would not be required in order to seize privately owned land from its rightful owners so it can be given to the likes of Costco stinks. If the past system was bad, Fulton’s proposal would make it worse.

Finally, never let it be said that our attitude is all negative. If Fulton is honest about his proposal, we could see our way clear to support him, subject to three modest safeguards:

First, that the taken land not be used for another purpose than the one specified in the resolution of necessity, and if it is sold, the money paid for it go to the taxing authorities whose funds were ripped off to acquire it.

Second, that the “just compensation” payable to condemnees displaced by urban redevelopment include  full compensation for all their demonstrable economic losses, including business losses, like they do in in Louisiana whose state constitution provides that condemnees be compensated “to the full extent of [their] loss,” including attorneys’ fees which are also recoverable by condemnees in Florida.

After all, redevelopment inherently involves the taking of private land for private gain (that will presumably trickle down to the community, but private nonetheless), so we see nothing wrong with the urban-redevelopment complex paying the full, true cost of doing business and not dumping some of it on people whose “sin” is that their land happens to wind up fortuitously in the path of a private “project” like a shopping center, a car dealership, or the like. If redevelopers need to be encouraged financially to do what they do, let the city pay them out of its own revenues, not by sticking its grasping hand into the condemnees’ pockets.

Third, if the “public”project for which private land was taken does not materialize as proposed for, say 10 years, the former property owners should be able to regain title to it should they choose to do so.

That way Fulton and his buddies would still get their goodies but at government expense — not the expense of the governments’ victims. After all, as Justice Holmes once put it, the public — the same as everyone lese —  is entitled only to that for which it has paid.

Afterthought. Old age must be creeping up on us because it took a while for the light to go on. The Sol Price School of Public Policy at USC, where Fulton is doing his scholar thing, is named after Sol Price who gave it $50 million, and who was a pioneer of “Big Box” retailing. His outfit merged with Costco that just happens to be the big-time beneficiary of old-style redevelopment, whereby other people’s property is taken by eminent domain and turned over to it. Some “public use,” eh? See 99 Cents Only v. Lancaster Redevelopment Authority, 237 F.Supp.2d 1123 (C.D.Cal. 2001).

Your faithful servant is not a fan of the late Justice William O. Douglas who did a lot of harm to the law of eminent domain in his infamous Berman v. Parker opinion. But, as they say, even a broken clock is right twice a day, and we think Douglas was on the money when he observed in one of his law review articles that legal commentators should disclose their point of view so their readers can tell through what spectacles their advisor views the problem at hand.  It would have been better if the Times had disclosed the Fulton-Price-Costco connetion, instead of presenting Fulton as a former mayor and scholar.

 

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