Activism plus capitalism in 40 Acres

Construction workers hoisted a green-and-white Starbucks sign onto a quaint, brick building in Oak Park recently. It was a big moment in one of the poorest sections of Sacramento.

Due to open in spring, the coffeehouse is a key tenant in a redevelopment project named 40 Acres, former NBA All-Star Kevin Johnson's $4.4 million attempt to inject a jolt of economic caffeine into the troubled neighborhood where he grew up.

This article was written by Harry Azar for a news letter that he puts out. He has been fighting the property rights issues that are going on in his neighborhood (Oak Park) for some time. The issues that he deals with in an inner city neighborhood are not unlike the issues we deal with in the rural areas.

Harry was one of the speakers we had at the Sawgrass Ralley at the California State Capitol.

Redevelopment Scam

Oak Park is squandering away the 11 million dollars Redevelopment Funds. Most of it has gone to SHRA consultants and Non-Profits with no discernable results for us. Except of course that: We have more non-profits in Oak Park than the entire County of Sacramento by a factor of ten. The Fund is very nearly depleted, but SHRA, and the Non-profit industry are after what little remains. What have we got for the 11 million dollars? SHRA and Non-profits have milked us under false pretense, and produced salary for themselves and lots of paper for us. SHRA takes properties off the tax roll and gives it to a non-tax paying non-profits, or pays them more money to offset the property tax they might pay. The appeal of the non-profits to the redevelopment agencies is that; Now they can take advantage of that little clause in the Fifth Amendment “, nor private property be taken for public use without just compensation.” Non-profit is a compassionate shell they present as the “Public Use.” But non-profits are individuals making a profit from others misery. They never really cure the misery, but keep it in compliance. The losers of this scam are the neighborhoods that need the tax money for Police, Schools, Fire fighters, Public works, etc. That is how they make us to constantly vote on “Issues” and “Propositions” on the state, county and city ballads to extra tax ourselves for services such as Police, Schools, and infrastructure. —Maybe!

The crime is an all-encompassing plague covering 70% of the Californian Municipalities. Municipalities issue tax-exempt bonds for one purpose and then use the money for something else. Meanwhile the bondholder in good faith declares the interest payment they receive as tax-free on their income tax. Since the money was not used for the original purpose, the tax-free exemption is a counterfeit. The underwriters of the bonds promote supposedly investment grade bonds that through misrepresentation and misappropriation turn out to be junk bonds. When a non-profit receives the land and improvement capital at negligible cost the lost value permeates through the economy leaving the California taxpayers holding the bag, and the neighborhood bankrupt.

Originally the laws were set so that the redevelopment agencies would retire at the end of the 40 years. SHRA on 2013. Senate Bill 211 (Torlakson) passed in October of 2001 extending the life of the redevelopment agencies in California by decades. Although the bill was in limbo for more than a year due to the controversial issues, Gov. Davis was manipulated by the redevelopment agencies into signing the bill right after 9/11. The new bill extends the economic rule of SHRA for more than half a century in Sacramento. They now can incur indebtedness up to 20 more years (2033). The Eminent Domain authority is extended for 12 more years (2025). They still have to meet certain requirements. But SHRA will cheat, coerce, lie and steal to meet all the loopholes constructed for their use in SB 211.

The bill is exclusively devoted to providing the ‘Very low, Low, and Moderate-income housing.’ SHRA translates that into aggressive ghetto housing in Oak Park, Alkali Flats, and Del Paso Heights, making them a minimum-security prison for the state of California. Nowhere in the new bill the “Redevelopment” of neighborhoods, or the economic needs of the community is addressed. The Bill allows them to incur more debt under the guise of blight removal. All the while adding to the blight.

The law requires that SHRA show substantial evidence that blight does exits in an area and cannot be removed without agency assistance. SHRA nurtures blight, thereby extending their own employment.

“Necessary and essential parcels” are the private properties which happen to be adjacent to the blighted (often SHRA owned, or Section-8) properties. Even though the private owners of the adjacent properties may keep up their building, they are the prime victims of the predatory behavior of SHRA through eminent domain. The non-profit non-taxpayer entities stretch the civil infrastructure to the limits, and expand the blight.

SHRA is facing an “unmet housing needs of the very low, low, and moderate income households” obligation. SHRA operates under a net deficit of housing stock required by law. They have misappropriated the funds by feeding their huge own overhead and bailing out non-profits. Now they want more money to buy time against the inevitable. They are constantly adding to the 51 billion dollar indebtedness of the State of California.

Ponzi scheme is an old turn of the century scam in which the investors would parlay an investment of $1,250 into $2000 in 90 days. It appealed to the investors’ greed. Ponzi was using new investors money to pay off the old investor, thus requiring an ever-increasing supply of new investors. Eventually the scheme collapsed and those who had stayed in lost everything. Redevelopment scam is a very large Ponzi scam in which the taxpayers of California are left at the end holding a bag full of debt.

Proposition 13 started this whole tax increment business on good intentions but given enough time and attorneys it got corrupted into a huge scam. The indebtedness caused by the California redevelopment agencies is estimated to be $51 billion dollars. (Other reports go as high as $200 billion), of which $10.5 billion is the principal , and $40.5 billion is the interest. The interest which they have to buy more bonds to pay off. They cannot buy more bonds without incurring more debt. An endless, vicious circle.

The public is conveniently not privy to the accounting practices of SHRA. Enron had to account to somebody eventually. Where are the independent auditors for the redevelopment practices? It has been suggested that like Al Capone, There may be a way to bring down this cancerous scam through the IRS, or the Securities Exchange Commission (SEC). Because the bonds are not always used for tax-exempt purposes.

The debt can be settled by the sale of all the Redevelopment Agencies current assets. The principle may be paid off on the previously incurred indebtedness, leaving us debt-free. Free to give to Schools, County & City infrastructure, Police and Fire Departments, public works, and etc. But that would put the freeloaders of SHRA out of a paycheck and they would have to get real jobs instead of the present con game.

Senate bills regarding Redevelopment involve heated discussions on the State Congress floors with stories of gross misconduct brought forward by the opposing views. However the proponents of SB211 and such bills have million dollar lobbyists like the Sacramento based CRA (California Redevelopment Association.) The lifeblood of hundreds of entities depends on this teat delivering a steady flow of the property tax increment dollars. Lobbyists thereby recycle tax increment funds into ‘political contributions’ to pass favorable laws. The CRA’s 1996 directory listed 25 developers, 26 bond brokers, 37 law firms, and 101 consulting firms.

(sources: “SB211”, “O.P. PAC meetings”, “Redevelopment, the unknown government. by Chris Norby Orange Co. Supervisor”, “articles from the Downey Eagle by Jerry Andrews”

He is onto something here, but needs to develop this concept a little further. What would be really great is if he can show a pattern of racketeering and tie it to profit interests.

Here he runs into a little trouble:

The indebtedness caused by the California redevelopment agencies is estimated to be $51 billion dollars. (Other reports go as high as $200 billion), of which $10.5 billion is the principal , and $40.5 billion is the interest.

Followed by:

The debt can be settled by the sale of all the Redevelopment Agencies current assets. The principle may be paid off on the previously incurred indebtedness, leaving us debt-free.

It is thus, secured debt that pays interest on the assumption that property tax revenues will rise subsequent to completion of the work. Mr. Azar doesn't make the case here that this doesn't eventually happen (it often doesn't). He also doesn't address what happens to those squeezed out of the area and the burden it places on property owners elsewhere. It doesn't address how those who had their property taken by eminent domain were paid less than they would have been had the land been redeveloped in the marketplace.

Mr. Azar is right, redevelopment is usually a crooked scam that benefits developers and future tenants at the expense of property owners and taxpayers. He needs to build a stronger chain in his arguments and appears to me to have both the energy and intelligence to do it.

I wish him well.

This is part of an email that Harry sent me:

I started a petition drive and sent out newsletter mailers to 500 people to stop a ghetto housing on MLK and Broadway. No official helped me nor acknowledged my arguments.

On Nov 5th I filled the PAC mtg w/ people, and brought a video camera. Had a Native American neighbor video the meeting. The chairwoman had financial involvement (conflict of interest) and seeing the camera abstained from voting. I virtually blackmailed the social democrats into voting no. The vote was 4-4 and the measure failed. We got away by the skin of our teeth. Guess who was the non-profit profiting from the potential tax credits: Niameih corp. The largest ghetto-maker this side of Mississippi. I am probably on their hit list now. Incidentally, on Dec 12th the Bee wrote an article about it. The socialists took credit for "stopping the low income housing" and no mention of me and 500 signature petition. Oh well. It is the result that is important.

That was the third year the Niemiah mafia has been trying to cash in on our tax credits on Broadway. Also Niemiah and SHRA ARE the reason K. Johnson is not succeeding. Commercial redevelopment on Broadway would put ghetto-makers like shra out of business. They try their hardest to dampen the commercial growth on Broadway. Cilia Yineguez resigned from SHRA at the peak of her career to work for St Hope. She is a "Plant" to keep him down.

New issue is the formation of the Micro-Redevelopment agencies known as the PBID (Property & Business Improvement District). I have done extensive research and found out it is a rip off of the taxpayers money aimed at robbing old grandma's and small owners properties. It virtually doubles the property taxes for them. (Where is your Prop. 13 now?)

Anyway I have been fighting it tooth and nail. Met w/ L. Hammond 1/21, Been to City Council on 1/30, and made presentation to the Oak Park PAC on 2/5. The applicant is OPBA, Oak Park Business Association (their members are non-profits and individuals) They have exempted themselves, while slating over 50 residentials as "businesses" to be taxed. The voting is per Square footage of 'land', not per owner. So they have included parks, schools, and SHRA ghetto housing in it. One vote from City will win the ballot measure! What democracy?!!

Harry Azar

I must note here that Harry, though not black, is a person of color. His issues are not based on race but economics. I would hate to see someone twist his use of the word ghetto to somehow mean anything other than slums. He has nothing against affordable housing just government corruption.

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