Bud Ovrom Steps To The Plate As CRA/LA's New Administrator

Bud, the LA CRA is saddled today with multiple pending lawsuits and faces an uncertain budget as the governor looks to slash redevelopment funds to help balance the state budget. Given the Agency's uncertain health, what attracted you to this new responsibility?

On a personal level, I had been in Burbank almost 18 years. I had been in city management over 33 years. I felt it was good for me and good for Burbank if I finally were to retire from city management and open a new chapter. For personal rejuvenation, I always knew that I was ready to do something different. And, I knew that my next challenge would be involved with development, because I spent much of my career in developer-related activities. I suspected that I would go to work for a development company at some point. Then, the CRA position came along and it interested me.

It sounds corny, but I do honestly believe that we are at a historic moment here, on the heels of Valley secession failing and with the mayor's commitment to empower communities. That is something that I would like to be involved with. One of the biggest challenges cities face is how to keep the benefits of a large urban area but still empower the local areas to pull themselves up by their own bootstraps. How can you make Hollywood do what Burbank did? How can you make San Pedro do what Long Beach did? I find that very challenging and exciting-perhaps one of the most challenging things going on in government anyplace.

In Burbank, redevelopment was organizationally under the city manager and under the city council. In Los Angeles, it's a relatively independent organization and legally a state entity. Are we better served by a separate agency? Or, would LA be better served to have a city manager with the management authority to integrate all city departments together to serve the needs of an entire community?

Certainly, in a smaller city where everything is integrated and the city manager is in charge of the planning department, the public works department, the utility department and redevelopment, that is much easier to manage than a situation like Los Angeles, where each department is so big and so autonomous. Someone was joking with me by saying that, in Burbank, I could walk into a department and tell them to do something. In L.A., the head of another department might not even return my calls. That's different, but it's also one of the appeals of the job. In my nature, I am a consensus building, collaborative sort of guy. I was not solely responsible for everything that was accomplished in Burbank over the past 18 years. It was a collaborative effort involving the hard work and cooperation of many people. A big city like L.A. is more challenging, but I relish that challenge.

Bud, you assume this position at the CRA with potential lawsuits pending both with the County over the Staples downtown redevelopment plan and with the School District over the Valley Plaza development. At the same time, the governor is looking to zap redevelopment funds to help balance the state budget. Could you have picked a more difficult challenge?

I don't know. But, I do want to hit that head on. I know that there are challenges from the County on the downtown redevelopment plan. The city, the County, and the redevelopment agency should be on the same page here. Cleaning up the blighted areas, dealing with the homeless problem, and providing more homes for working class families are all issues that the city, county, and the redevelopment agency should agree upon. I have to believe that there is some common ground there to reach win-win agreements on these issues that I would like to help find.

The same goes for the school district. I just cannot see the redevelopment agency at war with its school district. Schools are at the heart of any neighborhood and we're trying to build neighborhoods. In some of these blighted neighborhoods, the investments being made by the school district is going to be one of the biggest investments made in these neighborhoods. So, I view the school district and the redevelopment agency as natural allies and I'm going to try to build on that.

What is your opinion of the press reports of the state's interest in taking local redevelopment money to cover the budget shortfall?

That is a very real threat. The state budget situation is a bona fide crisis. They can argue about how many billions of dollars they are in the red, but it's staggering. All levels of government-cities, counties, schools, state, redevelopment agencies-are going to get hit very hard. It appears redevelopment agencies are going to get hit disproportionately hard. If you're a city and you have to choose between protecting your general fund, with police and fire services at stake, and protecting your redevelopment agency, you are going to protect your general fund first. If the state is going to reach a compromise with local governments on where to cut, redevelopment agencies are going to suffer larger cuts than other public services.

What is the best case for the state not disproportionately cutting redevelopment budgets?

It ought not to happen because the one thing you want to do during an economic crisis is build your economic foundation-create jobs and build housing. We are one of the few government agencies that can get to the root cause of recession. We can help create jobs. We can help build housing. We can help make things happen that can stimulate the economy. If you repress the one entity that can help stimulate the economy, then you will not get to where you ultimately want to go.

TPR recently carried an interview with USC Law Professor George Lefcoe asserting that "tax-increment financing for redevelopment is being used by many cities as an ATM machine, entitling them to unaccountably draw funds from county and school district accounts." How do you respond to that assertion?

I cannot defend every redevelopment agency in the state. I would be one of the first to agree that there have been redevelopment agency abuses. I am professionally embarrassed by some of the things I see being done by redevelopment agencies in the name of redevelopment. The city of L.A. throughout, whether it's in downtown, South Central, San Pedro, or in the San Fernando Valley, has some bona fide and righteous redevelopment work. Yes, I agree that there have been redevelopment abuses in many cities. And, for all I know, there have been redevelopment abuses in the past in Los Angeles. However, the redevelopment work that faces us is very real and this is what the redevelopment law is all about.

Let's go back to L.A. and the context of your new job. City managers are instinctively trained to find the political center. They have to keep a majority of the council to remain employed. Where is the center of gravity in Los Angeles vis a vis the CRA?

After a week on the job, I'm not yet sure. Like a kid learning to ride a skateboard, I'm not yet sure where the center of gravity is. I'm going to have to find that for myself. But, it is worth noting that I work for seven commissioners, all of whom were appointed by the mayor.

How should we then judge your tenure six months to a year from now? What would be the proper benchmarks?

What will be most important to me in the first few months will be building the relationships. I really want to reach out to the school district and build a relationship. I want to reach out to the county and build a relationship. I don't think we can get on with tangible work until we have solved some of these relationship problems.

Are we going to have done dramatic building projects in six months? Are you going to see construction all over the place in six months? No, that kind of activity is not going to happen that fast. We can't get there until we stop fighting with other entities and start working closer with other entities.

Another example of that is with tax-increment. I don't know if there was ever a time when tax-increment in redevelopment was the only way to do things. But, it surely is not the only way to do things today. Not only do we have to solve our problems with the county and with the school district, but also we have to reach out to the other city departments that work in the same areas. The city has a housing department. The city has a community development department. The city has a housing authority. We have to get all of these people who have a role in housing and economic development to make the working relationship among them seamless. Earlier, we touched on the fact that the CRA is an independent entity under state law. That is true by legal definition. But, on a working level, I have to work with the city's housing department and the city's community development department in an absolutely seamless and collaborative manner.

Lastly, as an experienced city manager and now Administrator of the LA CRA, you clearly have been on the front lines of the battles over state and local fiscal relationships. Our State's budget crisis increasingly has focused everyone's attention on whether it's possible to do structural fiscal reform. Do you have any thoughts or recommendations on this issue?

I had been up to my eyeballs in local government financial reform for over a decade and, frankly, over the last three or four years, I dropped out of it from sheer frustration. In the previous administration, I worked for the League of California Cities on the constitutional revision commission on the way local government is financed. The financial relationship between all levels of government is absolutely dysfunctional. It is worse than dysfunctional-it is destructive. The idea of rewarding cities because they can build Wal-Marts instead of rewarding cities because they build housing or because they support companies and create jobs is absolutely the wrong kind of incentive to be there. Of course, those are the rules we live with. In Burbank, we worked within those rules and built all of the big box retailers and made a fortune in sales tax revenue, because that's how the system works. But, I don't agree with that system. You have to reform local government finance so that cities have a true interest in building homes and creating jobs.