While no public office has prospered in the current economic climate, it’s been a particularly tumultuous time for the Los Angeles Community Redevelopment Agency (CRA/LA). In early May, a state judge ruled that the California legislature had not violated the state constitution in seizing some $2 billion from hundreds of local redevelopment authorities across the state, including the CRA/LA. Shortly afterward, the agency named its new director, Christine Essel, to replace Cecilia Estolano, whom many think was pushed out by Mayor Antonio Villaraigosa. Meanwhile, a precipitous drop in tax income had left the agency’s budget hurting before the state even got involved.
The Sacramento Superior Court judge’s ruling on funding will siphon about $85 million from the CRA/LA’s budget over the next two years. That money will be used to cover educational shortfalls within the state’s budget. Last year, the state’s CRAs fought a similar move in court and won, but this time they failed, severely limiting the agency’s work on projects like small business loans, infrastructure, new parks, affordable housing, and private development.
CRA spokesperson Mary Nemick estimates that the cuts will result in a loss of 2,300 construction jobs and a loss of $360 million in private investment for the city. Due to the state’s wrangling, along with the drop in local tax increment finance revenues, the CRA’s estimated budget next year will be down 14 percent to $586 million, noted Nemick.
A group representing the 397 authorities has already announced plans to appeal the state ruling and is requesting a stay on the fund seizure pending that appeal. “The state’s action is shortsighted and does not move the state forward or address the needs of working families throughout Los Angeles and our state,” Essel told AN.
Essel is a former senior vice president of government and community affairs for Paramount Pictures, and before that had been an airport commissioner for Villaraigosa. She was also board chair of the Central City Association in 2007 and 2008. She ran unsuccessfully for city council last year.
Her predecessor, Estolano, claims that she left the agency of her own accord, but several have said she was forced out after a fight with the mayor around the CRA’s relocation from its centrally-situated downtown headquarters to the Garland Building on the western edge of downtown. In retrospect, that move may have signaled the agency’s fall from grace to hard times.