Can Mayor Pulido Resurrect Redevelopment Agencies?

Santa Ana Mayor Miguel Pulido. (Photo by: Violeta Vaqueiro)

Santa Ana Mayor Miguel Pulido is heading an effort to resurrect California’s controversial redevelopment agencies, working with the public relations firm Forde & Mollrich to solicit donations from cities to fund a ballot initiative that would reverse one of Gov. Jerry Brown’s signature policy achievements.

Cities' contributions would go to a nonprofit setup to draft the Jobs & Economic Development Initiative or JEDI for the November 2014 ballot. It would allow cities to once again capture tax increment revenue, the central component to what was formerly called redevelopment.

The mechanism finances improvements to areas defined as blighted by using the rise in property tax revenue derived from projects in targeted areas. Brown’s recent elimination of redevelopment steered that revenue stream back to schools, special districts and cities' general fund accounts.

Neither Pulido nor officials at Forde & Mollrich returned phone calls seeking comment. Department of Finance spokesman H.D. Palmer also wouldn't comment on the initiative.

Under the old redevelopment concept, cities needed to declare a location blighted to take advantage of redevelopment.

JEDI agencies would expand the definition of blight to include “specified areas of high unemployment,” according to a document circulated by the initiative's backers. The premise is that JEDI could provide an engine to lower the state's unemployment to the national average, the document states.

“High unemployment is the new blight, which quickly translates into the old blight — neighborhood deterioration and crime,” the flyer reads.

JEDI's predecessor was often credited for revitalizing downtowns and other districts but also drew allegations of abuse, corruption and steering money away from city general funds.

In 2011, Brown pushed to ax some 400 redevelopment agencies across the state, arguing that they diverted much-needed tax revenue from schools. Officials of cities dependent on redevelopment funds reacted with outrage and accused Sacramento of raiding local revenue to solve the state's budget problems.

Yet Pulido’s JEDI seems to have received a cold reception, if not outright suspicion, from officials in some cities.

Westminster Councilwoman Diana Carey said Pulido was pitching a “hard sell” on the initiative, which made her uncomfortable. She also didn't like the idea of contributing to a nonprofit that would use the money to draft the initiative.

“I at one time had a nonprofit myself, and I thought, how could this possibly be a nonprofit? That gave me a kind of pause, and I had concern about that,” Carey said.

Carey also questioned Pulido’s motivation.

“My first question was, who's he working for? That never came up,” Carey said. “He's not listed with any of the companies involved. I don't know what his role is. I don't know if he's getting a fee.”

At least one reason for Pulido's hard sell is the deadlines for the three-phase approach to assembling JEDI. According to the flyer, the initiative's backers hope to have the research and drafting phase completed by November. Signature gathering and fundraising would start in December, and the campaign to pass the initiative would begin in June.

The Westminster City Council turned down the request for a donation of up to $50,000 during a closed-door meeting Sept. 11, Carey said.

The Palm Desert City Council during a public meeting last June also rejected a donation request.

A staff report listed several problems with the initiative, including potential opposition from other lobby groups and potential retaliation from the state Department of Finance. Like other cities, Palm Desert's receipt of leftover redevelopment funds depends on the Finance Department's approval.

Under federal tax law Section 501(c)6, the type of nonprofit collecting cities' funds is not required to disclose the identities of its contributors.

According to minutes of the June 27 meeting in Palm Desert, the city manager said the contributors are mostly Orange County cities. It specifically lists the “Costa Mesa's” and “Long Beaches” as cities that have contributed.

However, Costa Mesa Mayor Jim Righeimer and other council members said they haven't heard of the initiative.

“We're not interested,” Righeimer said.

Please contact Adam Elmahrek directly at aelmahrek@voiceofoc.org and follow him on Twitter: twitter.com/adamelmahrek

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