Landowners become PALS to combat eminent domain by predatory L.A. redevelopment wolf-PACS

PasadenaPundit.com ^ | August 2, 2005 | Wayne Lusvardi

[WayneLusvardi]

Landowners become PALS to combat eminent domain by predatory L.A. redevelopment wolf-PACS Wednesday, August 03, 2005

With all the media hullabaloo about the recent U.S. Supreme Court case eminent domain ruling, one would think that local redevelopment agencies are hunkered down in bunkers fearing the wave of new legislation being proposed in California and other states to eliminate the use of eminent domain for redevelopment projects. Not so in Los Angeles where the City Council has adopted new procedures which will grab power away from eight citizen advisory committees for redevelopment projects, called Project Area Committees or PACS. In reaction to this power grab a new support group called People Allied for Land Saving (P.A.L.S.) has recently formed. Clearly, PACS are no longer PALS to local property owners, especially small business owners.

On July 26, the L.A. City Council adopted proposed revisions to the procedures for election of citizens to serve on redevelopment PACS [Council File 01-2062-S7]. Small business proprietors must now attend PAC meetings themselves or pay a full-time employee to do so and cannot delegate their participation to others.

The objections to this change in the election procedures to PACS are legal, loss of shared control, and intimidation of powerless small businesses by government.

PACS do not have the authority to veto the use of eminent domain in already-formed redevelopment project areas. But they do have the power to veto the initial formation of a redevelopment project area. Cities and redevelopment agencies are typically averse to PACS because once formed they can organize to form a larger constituency among the community who may resist redevelopment. Local politicians dependent on future campaign contributions from large corporations, and bureaucrats and public unions seeking to enlarge city coffers, typically look at PACS as a “fly in the ointment” of redevelopment.

A very real fear of small business owners is that if they don’t vote the way the Community Redevelopment Agency (CRA) wants them to their properties will be especially singled out for taking by eminent domain or written up for building code violations.

Another contention of landowners is that the newly adopted election procedures violate California Health and Safety Code 33385, which provides that residential and commercial landowners and tenants shall be represented and adequately represented on PACS. Apparently the City of LA has relaxed this provision in the past to allow small businesses to delegate representation on the PAC to third parties when participation was a hardship to running their business. Such delegates or agents have in some cases been highly sophisticated property rights advocates who are often opposed in principle to redevelopment. It is no wonder the LA Community Redevelopment Agency wants to purge the PACS of such opposition.

Reading this column you may ask “why should we be concerned about this?” Unlike Europe, America is a place known for constant economic renewal. You can’t make omelets without breaking some eggs is the thinking. Why fight city hall on redevelopment when it serves a larger public purpose of creating more jobs and increasing the tax base and economy? Affected property owners get just compensation for their properties and even relocation benefits.

The reason that small landowners resist redevelopment is that it is a con game where they are singled out as the loser. Redevelopment often has nothing to do with actual redevelopment or with increasing property taxes or the local economy.

Something like 80% of the property taxes in redevelopment projects goes to paying back the bonds and even more must be set aside for “affordable housing,” which is nothing more than corporate welfare projects. Redevelopment actually sucks up property taxes from the general public and grabs it for itself.

Of course, what cities want are the increased sales tax revenues from new retail and commercial developments. But this often only means that small businesses are replaced by large businesses. And it is questionable that redevelopment grows the local economy. There is only so much expendable income in a community to be spent on retail products and services. Where redevelopment is more successful is where it steals customers from other cities or commercial districts. So redevelopment is really more about predatory wealth capture from others. This is contrary to a free marketplace where things usually work themselves out.

Take the City of Pasadena for example. It redeveloped its “Old Town” district by using eminent domain only for truly “public” facilities, such as parking structures and street improvements. Once these public improvements were in place, the local economy of “Old Town” took off all on its own.

What the proposed State Constitutional Amendment sponsored by State Senator Tom McClintock (SCA -15 (http://www.leginfo.ca.gov/pub/bill/sen/sb_0001-0050/sca_15_bill_20050713_introduced.html) would do is curtail the abuses of eminent domain for redevelopment. Small property owners would have to be paid full price for their properties based on the new re-zoned highest and best use, rather than having that new found wealth transferred to those with more political power and money under the guise of a “public use.” Admittedly, there will be some “hold-out” sellers, but there will also be some landowners who held out who will be passed over and left out. Another side benefit of curtailing the use of eminent domain for redevelopment is that citizen Project Area Committees (PACS) would no longer be necessary. And neither would advocacy groups such as People Allied for Land Saving (PALS). Government could go back to being a pal instead of a predatory wolf-pack (wolf PAC) to property owners. As they say -- in a free market things tend to balance out. About the Writer: About the author: Wayne Lusvardi worked for 20 years for the Metro Water District of So. Cal. and lives in Pasadena.