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Agency Was Key to Revitalizing Hollywood

Following last week’s California Supreme Court ruling, the Community Redevelopment Agency, Los Angeles (CRA/LA) could be dismantled.

The W Hotel and Residences in Hollywood was one of the projects that was made possible through funding from the CRA/LA. (photo by Edwin Folven)

The court upheld the constitutionality of AB 1X26, which dissolves the state’s redevelopment agencies and redirects their property tax revenues, despite challenges from a handful of associations and cities, including the California Redevelopment Association and the cities of San Jose and Union City.

The court also struck down AB 1X27, which would have allowed the agencies to operate if they agreed to a plan that included annual payments.

“This is a very important ruling by the state government,” Councilmember Tom LaBonge, 4th District, said. “We’re going to look at it and see what the impacts are as we move forward.”

If the court decision is implemented accordingly, CRA/LA would be dissolved by Feb. 1, according to the organization’s spokesperson, David Bloom. However, in a statement, Mayor Antonio Villaraigosa said he will meet with mayors from across the state, Gov. Jerry Brown, Assembly Speaker John Perez and Senate Pro Tem Darrell Steinberg next month to discuss long-term solutions.

“Many will see this decision as a setback, but I see it as an opportunity for California to step forward and responsibly invest in our future,” Villaraigosa said.

Bloom said the Supreme Court decision will not likely affect all of CRA/LA’s current projects. He said the agency tried to queue as many projects as possible, but it is likely that only those that were approved by the city with all the contracts signed by June 29, 2011, will be salvaged.

“Other projects, at this point, are in grave danger,” he said.

LaBonge said new projects that were counting on CRA/LA funding will likely be altered. However, it is not the governor’s intention to stop projects that were already “in the pipeline,” he said.

“This is an ever-changing time in California,” LaBonge said. “We will live through this, but hopefully we’ll take the right steps for the future.”

Marty Shelton, chairman of the Hollywood Chamber of Commerce, praised CRA/LA’s efforts over the years, saying that the agency was “catalytic” in bringing several large-scale developments to its Hollywood “zone,” including the W Hotel, the Hollywood & Highland Center and the Kodak Theatre.

“They don’t get credit for a lot of other work they’ve done,” Shelton said, referencing the agency’s affordable housing projects. “It’s definitely improving the environment [of Hollywood]. For what they have, and for what they will continue to do, they’re a vital component of the city.”

Shelton said that prior to last week’s Supreme Court decision, he was of the impression that a compromise had been reached. Bloom said AB 1X27, which was struck down, would have allowed the agency to return to its full operation. The city had opted to enter such an agreement, with $95 million payments coming to Los Angeles from CRA/LA annually, he said. Statewide, the payments would have been $1.75 billion annually, Bloom said.

He said CRA/LA employs approximately 200 people, though that is lower than usual. The agency generally holds about $125 million in resources, with an operating budget of approximately $47.2 million, which includes employee costs and fixed costs for the fiscal year 2012.

That funding, though, will now serve a different purpose, according to a statement from the governor.

“Today’s ruling by the California Supreme Court validates a key component of the state budget and guarantees more than a billion dollars of ongoing funding for schools and public safety,” Brown said.

According to a statement, the court allowed the passage of AB 1X26 by reasoning that if the Legislature had the authority to create redevelopment agencies, it had the power to dissolve them.

According to Villaraigosa, CRA/LA helped create approximately 18,400 jobs in 2011.

Tags | California Supreme Court, CRA/LA, Redevelopment agencies