Will LA/CRA Be Reinvented or Renamed?

On April 21, Mayor Richard Riordan pulled the plug on the Los Angeles Community Redevelopment Agency (CRA). He did so without fanfare or rhetoric; instead, he simply proposed that, as part of a cost savings measure in the city budget, the CRA would be merged with the city's Housing Department and some parts of the Community Development Department. In fairness, the mayor did not say he intended to kill the agency, or do away with its agenda. Quite the contrary, the mayor said that the merger was intended as "a focused, comprehensive strategy for producing housing, commercial, industrial and business development." The result of the merger would be a new entity, the Citywide Development Agency, governed by a new 9-member commission. 

Yet it was not necessary for the mayor to say that the once fiercely independent agency was a thing of the past. The fingerprints were everywhere for anyone who chose to look for them (which apparently does not include the Los Angeles Times, which never picked up on the story of the CRA's changing status until the day of the mayor's press conference, and even then failed to notice its significance.) For the first time, the CRA was being treated like an ordinary city agency, and its $360 million budget was to be incorporated into the city's own spending plan. The CRA Commissioners, who had hoped for a new life as the city's economic development chieftains, got pink slips instead - the only city board to be dismissed, with the exception of Public Works. 

ln all likelihood, no conspiracy or a "get the CRA" movement underlay the agency's change of life. Instead, it was a change in direction coming directly from Riordan himself, who has stressed business development above real estate development. Unlike the Bradley administration, which prided itself on grand projects such as California Plaza, Crenshaw Hills Plaza. the renovation and expansion of the Los Angeles Central Library, the ports’ 2020 plan and the expansion of LAX, Riordan's focus is on citywide business development and housing, which could arguably use CRA powers like condemnation, land write-downs and below-marketing financing on a spot basis, but would rarely have a call for large-scale efforts. In short, the urban renewal and real estate emphasis implicit in redevelopment is no longer the order of the day.

Chris Stewart, a former CRA Commissioner, said he envisioned the Riordan strategy as leading to many small redevelopment and/or housing projects, scattered throughout the city, rather than a few mega-projects in privileged redevelopment areas. Deputy Mayor Rae James is fond of talking about the "little City Hall" concept, in which eight or even fourteen government centers would serve neighborhoods more directly, and CRA Chairman Stanley Hirsh, a team player, talks about the little City Hall idea as if it were a done deal: "We' re going to have our ears to the ground a hell of a lot better than now." 

Riordan's reorganization is modeled after corporate downsizing, and it's not by accident that the architect of the agency realignment is William Ouchi, a UCLA professor and Riordan special advisor who is famed for theories on business organization. Indeed, in the case of affordable housing, the mayor had good cause to ask why three separate agencies, the CRA, Housing and the Community Development Dept., were all pursuing separate tracks to achieve the same goal. As one highly-placed City Hall official put it, one of the mayor's biggest questions was, “Why can the CRA do housing on different terms, on the same piece of ground, as the Housing Department?" CRA Chairman Stanley Hirsh agrees, “We didn't coordinate," he says of the Housing Department. “If the First AME Church comes to us for help, they can't go the to the Housing Department for help." 

Beyond organization, however, the Riordan realignment could be seen as something of a power grab. Riordan himself, in his budget message, spoke of a new agency that had "no part isolated from city oversight." Former City Councilman Art Snyder, now a lobbyist and still an acute observer of City Hall, said it was possible that the CRA-Housing merger helped put redevelopment powers more directly under the mayor's control. He observed that historically, "the CRA started out having an indirect relationship to the Mayor." In 1992, City Councilman Zev Yaroslavsky led the fight for the council to gain closer supervision of the agency, with a diminishment of the mayor's influence. With the realignment, Snyder speculated, the agency may have "gone from an indirect relationship (with the Mayor), to no relationship, to a direct relationship." 

If the old CRA was the loser in the realignment process, Housing may come out as a net winner. The combination of 500-employec CRA with the 270-employee Housing Department creates staff resources previously unimagined. The affordable-housing kitty is considerably enriched, with the addition of 20 percent of the agency's tax increment (about $30 million) set aside for housing, as required by state law. An added bonus, according to director Gary Squier, is that Housing would be exempt from the city's civil service requirements, which would allow Squier and his staff to hire outside consultants to handle some of the gnarlier aspects of housing finance. Squier also said he hopes the new agency would be exempt from the CAO's bean counting, in the form of inflexible allocations for each line item in the department budget.

If the reorganization does indeed spell the doom of the old CRA, what has been lost? Arguably, the age of grand projects is dead; the Los Angeles riots taught us that the city must place its priorities elsewhere, if the city is to remain a viable place to live and do business. 

Perhaps the definitions of blight, despite ongoing revision, still smack of 1950's-style urban renewal, in which the best cure for a blighted landscape was a new project, rather than a deeper, systemic cure for poverty, low educational achievement and crime. The CRA had many achievements, but it also tended to alienate the neighborhoods it was created to serve; fears of eminent domain and top-down planning stymied the Hollywood Redevelopment Project as well as a proposed expansion of the Watts project. Even in middle-class neighborhoods, the very mention of a possible CRA study was enough to send home owners into hysteria. That's not a good political profile for an economic development agency seeking a community base. 

Los Angeles was fortunate to have had the CRA, but it's importance had shrunk as the needs of the city changed. The age of grand projects is over, and the time of small-scale rebuilding has begun. The only thing that is surprising is how quietly it all happened.