The Morphing of Civic San Diego and the Need for City Council Oversight

Focus on March 18th Public Safety and Livable Neighborhood Committee Meeting

By Anna Daniels / San Diego Free Press
This past October, Reese Jarrett, newly hired President of Civic San Diego (CivicSD), appeared before the Public Safety and Livable Neighborhood Committee of the San Diego City Council. The committee chairwoman, District 9 council member Marti Emerald, directed a number of pointed questions toward CivicSD staff, followed by additional questions from District 4 council member Myrtle Cole.

Councilmember Emerald provided a brief description of CivicSD as a city owned non-profit established in June of 2012 to continue the city’s economic revitalization efforts. CivicSD already had a contract with the city, the redevelopment Successor Agency, to handle the administrative duties associated with the winding down of redevelopment projects.

As Councilmember Emerald noted at the meeting, CivicSD was “morphing,” and community members had definitely started to take notice and voice concerns.

Now there were updated CivicSD bylaws and another contract with the city which transferred the ongoing functions of CCDC and SEDC to CivicSD. Those same bylaws also broadened the scope of CivicSD activities and guaranteed its ongoing existence as the city’s development mechanism. Yet there was little fanfare or public discussion about how economic development and revitalization efforts should continue in the city after the end of redevelopment.

Oakland and Los Angeles carry out at least some of those efforts as their own municipal functions. Council member Emerald noted this divergence in approach at the committee meeting, pointing out that an entity such as CivicSD would be providing input to the municipality if we had chosen that model. San Diego has essentially outsourced these functions to CivicSD, which is under the direction of an unelected board. The public has never had a meaningful opportunity to debate the merits and alternatives to that decision.

The media has been shamefully silent on this point. This silence has marginalized voices like CivicSD board member Murtaza Baxamusa who wrote the thought provoking article Beware of Wall Street Schemes on Redevelopment.

CivicSD is no longer a contractor with a two or three year shelf life– the amount of time it would take for projects that had been in the redevelopment pipeline to be released or not by the California Department of Finance. As Councilmember Emerald noted at the meeting, CivicSD was “morphing,” and community members had definitely started to take notice and voice concerns.

Friends with benefits

There were two sticking points for Emerald. At the time of the October committee meeting she expressed her concern that the CivicSD board of directors functioned as the sole arbiter of whether there were adequate community benefits resulting from CivicSD projects. The second point, confirmed by Reese Jarrett, was that while CivicSD maintained the sole authority for any debt incurred, it was not necessarily the responsibility of CivicSD to reimburse that debt, which would fall to the city’s general fund.

Emerald expressed support for continued economic development in the city, pointing to the benefits of prior redevelopment in District 9 and the economic and social revitalization needs that still existed in under-served communities. But she was also concerned about a lack of accountability from CivicSD’s board which she described as having “the sole authority to allocate money and buy or sell land and buildings.” She added “I am troubled that they are not accountable to the city council or taxpayer…The reaction from CivicSD has troubled me even more with its dramatic push back.” She noted that in the past CCDC had to go before the city council for approval in certain instances, but there was no such city council oversight of CivicSD. With the demise of redevelopment, there are no operative State laws either.

The issue of community benefits has become particularly contentious. Emerald stated that public subsidies to non-governmental organizations and the private sector should be made with the stipulation that there must be direct benefits to the community other than the service that a business is proposing. She also pointed out that funding proposals which emphasize community benefits make applications more competitive in a highly competitive environment.

CivicSD itself was in the process of drafting a community benefits policy, but a change of leadership in March with the exit of President Jeff Graham, halted the effort. Jarrett reported that CivicSD had resumed crafting a policy based upon priorities in communities that would include broad representation.

90 Days and a To-Do List

The Public Safety and Livable Neighborhood Committee directed CivicSD to return in 90 days with a plan that includes a synopsis of outreach efforts and which provides an outline of a policy regarding community benefits agreements, with the expectation that the full council would see a community benefits policy as part of the annual budget request. It also requested a review of CivicSD bylaws in conjunction with the IBA and City Attorney to tighten up oversight.

Jarrett responded that CivicSD would provide a review of board policies and make recommendations for policy changes. In addition, planning committees, specifically in City Heights and Encanto, would be asked to provide input on the bylaws.

The CivicSD Roadshow

That October 29 Public Safety and Liveable Neighborhood Committee meeting provides the context for much of the CivicSD activities and public responses in the ensuing months. CivicSD launched a “Community Benefits Consensus Project” with the goal of “building a collaborative network of stakeholders to inform development of Civic San Diego’s Community Benefit goals.”

There was an audible gasp in the room when this particular project was presented. None of the community benefits ticked off, including two public bathrooms and a privately owned but publicly maintained park, was able to diminish the impact of this grotesquely out of scale development.

Their third of four sessions was held in the City Heights Library Performance Annex on the evening of January 8, 2015. Like the other sessions before it at NTC, this venue was “sold out.” My husband and I crashed it. I shared the concern with other City Heights residents that CivicSD was going to do an end run around our area planning committee (CHAPC) when undertaking projects in this community. In addition, they had proposed expediting the planning and permit process to reduce costs to potential developers and it was unclear what that meant from a community perspective. And finally, there remained the sticky issue of the final disposition of prior redevelopment projects in City Heights.

This particular consensus project session consisted of a number of presentations followed by a brief question and answer period. There was an introductory panel discussion on the topic of “Leveraging Development to Benefit Community.” A number of examples were provided, including the recently opened Copley Y on El Cajon Blvd in City Heights. The final example was the Pinnacle Towers, the high rise condos jutting up into the East Village skyline.

There was an audible gasp in the room when this particular project was presented. None of the community benefits ticked off, including two public bathrooms and a privately owned but publicly maintained park, was able to diminish the impact of this grotesquely out of scale development. The fact that only 72 units out of 900 were designated as affordable housing was not lost upon us either. As Jay Powell noted in “Thoughts on the Civic San Diego Road Show” developers and community members can have widely divergent views on what constitutes a benefit. Or blight.

The substance of the session was the introduction to MindMixer, an online outreach and feedback tool that provides a format for soliciting community benefit ideas. The process would continue with the vague and mysterious formation of “stake holder tables” with limited but representative participation and an additional table for community planning representatives. It was not clear whether this process would also be conducted online. Above all, presenting MindMix as the sole outreach and feedback tool in my City Heights community, with its peculiar demographics, struck me as surreal.

CivicSD project consultant Cheryl Phelps fielded questions following the rollout of MindMixer. While she was able to answer a number of questions relating to the MindMixer process, more substantive questions about CivicSD itself were referred to Reese Jarrett, who was standing deep in conversation in the wings of the Performance Annex after his initial introductions. Questions needed to be repeated and Jarrett would once again retreat to the wings after his response.

While this session was purportedly about community benefits, there was no substantive discussion on the topic, although City Heights resident Jim Varnadore handed out a list of proposed benefits that reflected his neighbors’ preferences, and Samer Naji, of the Community Budget Alliance also came prepared with a list.

I spoke with Reese Jarrett at length after the meeting. My clearest take away from that conversation was his assertion that developers will not be interested in projects if the community benefit requirements are too onerous. Jarrett is clear and consistent about developer needs. At the October 29 committee he stated that economic development in under-served communities will only occur if CivicSD incorporates the expediency of downtown processing in those communities.

Jarrett was referring to CCDC’s ability to circumvent the normal planning and permitting process and expedite it. CivicSD wants to apply this expedited approval process to other areas of the city. While the media has covered the labor issues that have arisen as a result of what is essentially outsourcing of a city function, few serious critiques have been offered that look at the impacts on meaningful public involvement or the potential environmental impacts on individual projects. In short, this expedited processing benefits developers. It should also be looked at as a public subsidy and it should deliver community benefits.

CivicSD board member Murtaza Baxamusa points out in a recent opinion piece the potential downsides for communities:

• We cannot consider the environmental impacts of a project, such as air pollution or traffic.

• We cannot require a developer to provide affordable housing or community amenities, if the developer does not agree.

• We cannot reject a project if we feel it does not comply with elements of the general plan.

• We cannot compel developers to provide a different density or building type.

• We cannot compel developers to provide sustainability features, even if we feel the community plan calls for them.

Council member Emerald’s description of CivicSD’s “dramatic” push back to the concerns she raised strikes me as an understatement. This is the message that I hear from CivicSD.

CivicSD operates with an astounding degree of autonomy and few limits on where and how it can operate, beyond those imposed by individual grants. The City of San Diego has granted CivicSD that autonomy and in doing so has sacrificed accountability and transparency, the cornerstones of good governance. Taxpayers are also the deep pockets for CivicSD debts.

The debate about community benefits must be seen in this broader context. Is CivicSD truly the appropriate mechanism for the economic and social revitalization of under-served communities like City Heights? I am unconvinced that CivicSD has much interest in relatively small projects in City Heights beyond their ability to provide a revenue stream from administrative functions associated with New Market Tax Credits (NMTC).

CivicSD has its eye on a much more lucrative goal–the creation of a large private investment fund that would come from “banking institutions, developers, pension funds, insurance companies and community development financial institutions (CDFIs).” The city could also contribute.

Andrew Keatts goes on to describe how CivicSD would use that money.

Civic San Diego would take the money from that fund and purchase properties and assemble adjacent properties, draw up new restrictions on them that increase the amount of development allowed and sell the properties to developers. Basically, they acquire the properties at a low cost, take the initiative to upzone the properties — inflating their value — and sell them off to developers who want to build at the increased density.

It is worth keeping all of this in mind as we prepare for the March 18 Public Safety and Livable Neighborhood Committee meeting. Item #-4, Report from Council District 9 regarding Council Resolutions regarding the Transparency, Accountability and Oversight of Civic San Diego.

Anna Daniels is a past president and board member of the City Heights Community Development Corporation and long time resident of City Heights. She is currently a member of the Community Budget Alliance, representing the Library Organizing Project. The opinions expressed are her own.