Ending Corporate Welfare in San Diego!

by on March 4, 2011 · 5 comments

in Civil Rights, Economy, San Diego

Serra Mesa, San Diego: To kill the Beast or not, was the question. Has it grown into an enormous creature with an insatiable hunger for more and more tax dollars supporting the profits of developers and wealthy speculators? Has what was once a modest program to end blight in inner cities by creating safe, decent, affordable housing and helping neighborhood businesses band together for remodeling and nearby infrastructure improvements been hijacked by bribed politicians to become a lucrative entitlement for large conglomerates and economic cartels?

What has got the mayor of San Diego peeing his political pants, ranting and raving and flying off to Sacramento for personal begging outside the Capitol building with a implicit hand-written sign which read ‘how dare you consider ending welfare for the rich?” What has got a spineless City Council (with the exception of Sheri Lightner and newcomer David Alverez) falling all over themselves to pass a resolution which urges the governor not to ax funds to their financial benefactors – developers, real estate agents, hotel moguls, speculators and various snake oil salesmen still pushing the nonsense of “trickle down economics?” Todd Gloria in his vote for the resolution did base it on the need to continue affordable housing projects in his district, including my neighborhood in City Heights.

Those were some of the questions which arose at the March 2 forum, entitled “Redevelopment: Abolish or Reform?” Sponsored by the Affordable Housing Coalition of San Diego and the Grantville Action Group, and held at the Salvation Army’s Door of Hope facility in the Birdland neighborhood of Serra Mesa, the gathering drew a diverse crowd who were each given time to discuss their personal views on Governor Brown’s proposal to abolish redevelopment agencies statewide and what that would mean for San Diego.

Ever so often, we in California elect a politician who rises to the stature of statesman; a person of both vision and courage. Progressive Republican Governors Hiram Johnson (1910) and Earl Warren (1943) and Democratic Governor Edmund “Pat” Brown (1959), who built the finest free college and university system in the world until Ronald Reagan and the corporations through Proposition 13 began to dismantle it, were all Governors of vision who had the audacity to challenge the excesses and power of “robber barons,” corporate CEO’s and megalomaniac tyrants of wealth.

Jerry Brown, whose first two terms as governor was a faint-hearted reign in order not to offend the powerful, had his eye on higher office. He dribbled around the edges with modest environmental programs and “small is beautiful” rhetoric rather than whack away at the underpinnings of the corporate state Reagan had cunningly begun. Now, being too old to run for President of the United States and having to answer only to his conscience and faith, he seems to be taking a hard look at the systemic bulwark of corporate welfare and how their lobbyist’s force the public to pay for infrastructure improvements near their developments – roads, sidewalks and traffic mitigation projects which they should being financing, in the first place, for the privilege of doing business in the community.

The Lie that Redevelopment Has Become

As I sat, listening to dozens of citizens take to the podium illuminating their personal experiences about the excesses and abuses of the redevelopment processes in San Diego, it seemed so similar to the painful voices of villagers and indigenous leaders I had heard traveling through northern Mexico with the Zapatista commandants during their “La Otra Campana” movement in 2006. Time and again, village elders would complain about huge, multinational corporations moving into their communities, exploiting resources, paying non-livable wages and then sending the profits off to distant investors, while their local elected officials took bribes and were given positions in the corporate hierarchy for their success in selling off of the public commons. However, the participants at the redevelopment forum in San Diego were no peasants; they represented the best and the worst in each of us.

I had come to the forum expecting to vote in a planned final show of hands for the elimination of redevelopment agencies in San Diego. Vehemently opposed to the obscene amount of money used to subsidize corporate profits, particularly downtown through the Center City Development Corporation (CCDC), and the massive bribery and municipal corruption that the redevelopment process has engendered, I was happy initially that the participants at the March forum seemed 5 to 1 in favor of abolishing redevelopment. Their pleas for neighborhood autonomy and a voice in quality of life issues stripped away the mask of representative democracy, showing the power of the corporate state to dominate, dictate and distribute the common wealth to an elite using the redevelopment process.

For me, once imprisoned by the Fascist dictator of Portugal, Antonio de Oliviera Salazar, I am a strong opponent of the corporate state. After all, it was Benito Mussolini who said in 1939, “Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power.”  To concentrate political and economic power together in a hierarchy of unelected marionettes, as in CCDC, whose control over municipal assets and whose dispensation jurisdiction has grown each year to the point they own politicians outright, from Councilman Kevin Falconer to Assemblyman Nathan Fletcher, is a reflection of corporatism at its worse. The CCDC agency’s recent end-game around our elected representatives on the city council over the cap limit points to not only the power and arrogance of the corporate state, but the brokenness of representative democracy and the need to replace it with participatory democracy. So, a stake through the heart of the redevelopment process seems to be a first step in that direction.

As the forum progressed, and more and more speakers mounted the podium, many of them from the city’s local planning committees, calling for capital punishment for redevelopment; I realized the dynamic which was playing out at the gathering. As a former elected member of the City Heights Area Planning Committee, who had fought for years on behalf of affordable housing against the developer and real estate interests which dominated the committee, members who worried more about property values rather than human values and nimbyists who fought every project or improvement for anyone below the middle-class economic level, I realized at the forum that those same old battles about the priorities of class-cleansing were emerging in the discussion about redevelopment.

The two principal speakers for eliminating redevelopment were Brian Peterson of the Grantville Action Group, who has fought redevelopment, mostly over eminent domain issues and the lack of input by the local planning group, and Fred Schnaubelt, a former city councilman and myopic real estate broker, who crystallized the whole debate when he said “the housing coalition is just making the situation worse by the policies they are attempting to get adopted,” alluding to high-density, affordable housing projects

Affordable Housing Beyond Redevelopment

Then, the last speaker, Doris Camp, of the San Diego Housing Federation, reminded the audience that without the redevelopment process many of the affordable housing projects in the city would not have been built. And, when she asked people to reconsider their terminal bias for redevelopment, I realized that there just wasn’t enough political will on the part of ambitious council persons to fight for affordable housing against the property rights fanatics and not in my neighborhood guardians who sit on the planning committees throughout the city. That without the redevelopment agencies, in spite of their pimping the corporate addiction to public funds, there is no mechanism to advocate and support any affordable projects in the city.

Brian Trotier

Brian Trotier, a former interim CEO of the Southeastern Development Corporation (SEDC), spoke in favor of reforming the redevelopment agencies with concrete legislation that would specifically define “blight,” require that all efforts go toward the neediest citizens and neighborhoods in the city and that a specific ratio of public money to developer money be established rather than a blank check for corporate welfare. He also called for a formal agreement, a contract, where developers would be required to meet their threshold of promised jobs, tax increment estimates and neighborhood improvement pledges.

With the end of redevelopment, he spoke of the loss of “a tool” to entice and allow developers to build affordable housing projects in neighborhoods where they not normally would build because the economic profit margins weren’t there. Gregg Robinson, a professor at City College, blasted the redevelopment agencies for using affordable housing “as a battering ram to get funding and support.”

With a lack of accountability, excesses in corporate welfare, staffed by shady characters, like Fred Maas of CCDC, and downright criminals, like Carolyn Y. Smith, former director of SEDC, who not only wrote herself personal checks but spent an astounding 38% of total spending on administrative costs, the major redevelopment agencies in San Diego have, by a recent estimate, spent an incredible $2 million per apartment or condo for affordable housing, when staff costs and corporate hand-outs are factored out.

What a perversion of the primary intent of the legislature in its redevelopment law which required 20% of all tax increment money be earmarked for low and moderate income housing. They further required that if there was any modification or change in the original project plan – such as Petco Park or numerous other corporate welfare projects such as hotels or office buildings – that the affordable housing percentage raises to 30% of tax funds raised and that expenditure on “moderate” housing could only come after 49% had already been earmarked for “low, very low, or extremely low income housing.”  Another requirement was that the redevelopment agency could not exceed 15 percent of its total allotment for “moderate” housing in any 5 year period.   CCDC has not only consistently broken the law by spending 90% of its housing funding on “moderate” income housing, which hovers around market priced housing, but distorts, lies and fails to account for a lot of its expenses.  Five years ago, when I took a CCDC organized tour of downtown buildings financed with redevelopment funds, along with other members of the Housing Coalition, we heard the outrageous claim that a $250,000 condo constituted “affordable housing.”

Today, CCDC continues to vomit its fabrication that it has created affordable housing in the inner city. For instance, the latest addition to the rental housing market downtown at Ninth Avenue and B Street, the Pointe of View, charges from $1,600 to $3,400 a month for its one- and two-bedroom units.  Now to CCDC’s board members and publicists that may be very affordable with their six figure incomes from our pockets but to the vast amount of families in San Diego, it is not.

If Governor Brown succeeds in shutting down San Diego’s 17 redevelopment agencies, controlling 11,700 acres, ending corporate welfare as we know it locally, he will also be throwing the baby (affordable housing) out with the rancid bath water. Tens of thousands of families are on a waiting list for rental assistance. Over 8,000 families are on another list for public housing, while 5,000 people a month are evicted because of outrageous rent. Fifty seniors a month, hit city streets homeless. So what are we to do to make housing more accessible and affordable?

The San Diego Renters Union has called on the city council to make the San Diego Housing Commission an elected branch of city government, with its commissioners being elected every four years and answering to the voters of the city rather than politicians and their lobbyist cronies. Only then can the very important issue of safe, decent, and affordable housing be decided by the citizens, rather than back-room deals and store bought politics.

Announcing four two-hour sessions on redevelopment, Richard Lawrence, co-chair of the Affordable Housing Coalition (ahcsd@cox.net) said that the proposed community think tank would be for those who “have not had sufficient opportunity to think through your position on redevelopment and want to be in on the action with recommendations to policymakers.” Sponsored by the housing coalition and the Berkeley based Western Institute for Social Research (WISR), the March gatherings will be held at the Center for Policy Initiatives in Mission Valley.

{ 5 comments… read them below or add one }

annagrace March 4, 2011 at 12:56 pm

Excellent article on a complex subject Rocky. And you are quite right- the public sentiment is to throw out the rancid water of redevelopment with little awareness of the impact on affordable housing.

Rocky- in the short term do you think any of Brian Trotier’s recommendations can be “codified” in redevelopment policy? What would it take to make that happen?


Rocky Neptun March 6, 2011 at 1:44 pm

Dear Annagrace: It appears the state legislature may side with the Governor in eliminating the redevelopment agencies within a week or so. However, some of them, with deep pockets and many attorneys may well be put on life support by a variety of lawsuits, which could drag on for years; so, its still kind of shadowy what’s really going to happen.

So, your question, while a good one, is pretty much moot at this point in terms of what the legislature will do. We can, however, in San Diego push the city council into making the Housing Commission more responsive and active in the need for affordable housing as well as the watchdog agency for all uspent redevelopment agency funds and debts.

CCDC spent $114 million of federal grant money for the homeless on upscale projects and corporate welfare, as well as lucrative salaries for themselves. Someone in the cesspool of corruption and graft, at CCDC or in the mayor’s office, needs to be proscecuted as a good lesson.

The only way Brian’s recommendations will be adopted is if we citizens demand the city of San Diego codify them in whatever ordinances or programs replace the redevelopment agencies locally.



annagrace March 6, 2011 at 1:51 pm

Thanks Rocky.


Marisag March 4, 2011 at 5:33 pm

I live in City Heights. Redevelopment has built us an Urban Village and made a once horrible area nice again. The down side? It’s REALLY cheap building standards. These buildings will need to be replaced soon. They will not hold up to the test of time. Governor Brown should stick to his guns and close this cash cow down. I’d really like to not drive into a pot hole next year, which seems to be where we’re headed.


Danny Morales March 4, 2011 at 10:02 pm

Way-Go Rocky! Educational and informative with a kick.


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