Lakeside Apartment Neighborhood Association

Articles

Oakland Shell Game: Redevelopment

Many Oaklanders wonder why there is so much money for unnecessary development, yet nearly every service our city government is supposed to provide is starved for funds. What's up with that?

Once upon a time, the Oakland City Council wanted special legal powers. It was illegal for Oakland's City Council, or, in fact, any other city council to have these powers, because the temptation was too great for abuse and corruption.

Then someone found the loophole

All a city council had to do was to set up a redevelopment agency, without voter approval, and appoint themselves as its board. Since the redevelopment agency is a separate legal entity with its own budget, this made these special powers legal. Oakland was one of many cities that did this. Cities justify this by claiming it to be a temporary measure in order to eliminate "blight".

In this way, they gave themselves four powers which would be illegal if they were acting as the city council. These powers work together neatly to foment corruption and abuse.

The four powers are these:

  • 1.Tax Increment
    Although the Oakland City Council — excuse me — I mean the Oakland Redevelopment Agency, pretends this is so complicated that only the gods on Mount Ogawa could possibly understand it; it isn't all that complex. A property with a big new building on it will be reassessed and pay more taxes. However, except for a small passthrough required by law for funding education, the redevelopment "tax increment" does not effect the general city budget allocated for providing citizens with municipal services. The entire tax increment, minus the passthrough for education, is skimmed off by the redevelopment agency. This is money that can't be spent on city maintenance, public safety, or other needed city services.
  • 2.Bonded Debt
    Unlike any other public agency, a redevelopment agency can sell bonds without voter approval.
  • 3.Public Asset Giveaways to Private Developers and Other Private Concerns
    Cash grants, forgivable loans, land sold for less than market rates — such as the Oak to Ninth Project, or land given outright, tax rebates, and gratis public improvements, are examples of these giveaways. Note that only certain favored developers and corporations get these benefits. Those who generously contribute directly and indirectly to political campaigns benefit most.
  • 4.Eminent Domain for Private Use
    In the past, eminent domain was only used for true public uses like school and road construction. Now, especially since last year's Kelo Decision, eminent domain is almost arbitrarily declared by redevelopment agencies because a favored developer has plans for it. The small private landowner is at greatest risk of being subject to eminent domain. The redevelopment agency hires consultants whose job is to make small landowners settle for as little as possible. Although redevelopers claim they seldom actually use eminent domain, it's a bit like an armed robber claiming he seldom actually shoots anyone.
 

Cities first claimed redevelopment was a tool to eliminate blight. It has not eliminated blight. They then claimed it was a tool for economic revitalization. It hasn't worked for that either. Now they claim it's a tool for the ill-thought-out notion known as "smart growth". It won't work for that either.

You can examine a tool and figure out its purpose. A redevelopment agency is designed to allow our city council to be greedy, abusive and corrupt without being indicted and sent to prison, as they so richly deserve. That is what it is designed for; that is what it does. It does this very well. It isn't meant to do anything else.

As with any other addiction, those addicted to corruption lose the ability to assess reality and speak the truth.

We have neighborhoods with lots of vacancy signs — both retail and residential, a housing market heading for trouble, a sub-prime meltdown, and, according to the U.S. Census Bureau, a declining local population. Yet, the Oakland Redevelopment Agency insists there is an urgent need to build, build, build in order to have more money for city services. This is clearly disingenuous. All the new BUBs (big ugly buildings), have not improved our city services and our housing has gotten much more expensive. Oakland shut down it's fingerprinting division in the Police Department and halved its police staff due to budgetary restraints.

The city government and the redevelopment agency are two separate legal entities with two separate budgets. Remember the tax increment? Our city government gets the same amount in taxes whether a project is built or not. The redevelopment agency gets all the tax money over that, and borrows against the "tax increment".

Currently the Oakland Redevelopment
Agency is over $329,000,000 in debt and rising!

Our city government is playing a crooked shell game with us. It has become arrogant and has forgotten that the City Council was elected to represent our voice in Frank Ogawa Plaza.

Intervention

So what can we do? At the very least, we need to stop this debt compulsion. Corruption is like any other addiction; we need to stop being in denial. We need to start talking about this. Talk with friends, neighbors, relatives and even strangers. Oakland's City government needs our intervention to stop this budgetary pathology.

We need to wake up and
hold our councilpersons accountable.

As our council districts come up for re-election we need to discuss redevelopment with all of the candidates. Due to the loophole, we may not be able to throw our council persons in jail, but we can throw them out of office.

The truth about redevelopment needs to be exposed to all. Please feel free to share and copy this article.

— Orna Sasson, Chairperson, L.A.N.A.