Thursday, June 16, 2011

Impact of AB1X-26 and AB1X-27, measures to dissolve redevelopment Prepared Remarks by CEO, Christine Essel

Complete Statement Attached

Impact of AB1X-26 and AB1X-27, measures to dissolve redevelopment

Prepared Remarks by CEO Christine Essel,

Community Redevelopment Agency of the City of Los Angeles,

To the CRA/LA Board of Commissioners on June 16, 2011

Yesterday, the Legislature passed two bills. The first dissolves California’s redevelopment agencies. The second creates an opportunity for the City of Los Angeles to choose to have CRA/LA continue its important work.

But there is a price. For the CRA/LA to continue, we would have to pay our prorated share of $1.7 billion by January, 2012, and we would have to pay a very steep annual amount to the state every year after that. Based on current information, we estimate the January 2012 payment would be roughly $70 million and the annual payment thereafter would be roughly $38 million. This annual amount may fluctuate based upon changes in future tax increment.

If the city does not elect this option, the CRA/LA would be dissolved. A successor agency, which could be the city under a county-appointed oversight board, would take over our assets and wind down our work program. If the city does not elect to pay this price and the CRA/LA is eliminated, then Los Angeles additionally would not receive any amounts beyond its AB1290 share for many more years.

Although this is a significant blow, at a time of state-wide economic recession, there is a path for the CRA/LA to survive.  That path, because of the substantial loss of revenue, would require us to look at our available resources and determine how best to manage them.  We also will be meeting with our attorneys in closed session to review litigation options.  The California Redevelopment Association has strongly criticized this legislation, which is bound to lead to litigation.

Even with reduced resources, we shouldn’t give up this Agency’s important work.  Ensuring our survival also would ensure that:

o   CRA/LA can continue to employ its unique land-use tools and regulatory authorities to revitalize neighborhoods with the dedicated, long-term attention such work requires;

o   That our knowledgeable and experienced staff can continue to implement a critical work program targeted to job creation and economic development;

o   We will continue to provide much needed capital to spur private development and produce housing developments that can catalyze the economy and eliminate poverty.

Perhaps this legislation’s most destructive impact is the uncertainty and disruption it is creating for so many across the agency, the city and beyond.  So we will look to the City to act quickly to ensure our survival.  This will allow Los Angeles to keep more of its tax dollars in place and sustain city priorities and projects.

About Community Redevelopment Agency of the City of Los Angeles

CRA/LA ( is a public agency regulated by the State of California and operating within the City of Los Angeles. CRA/LA makes strategic investments to create economic opportunity and improve the quality of life for the people who live and work in our neighborhoods. CRA/LA manages 31 redevelopment projects areas and three revitalization areas in seven regions: East Valley, West Valley, Hollywood & Central, Downtown, Eastside, South Los Angeles, and the Harbor.


CRA_CEOBudgetStatement_06_16_11.pdf Download this file

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