Community redevelopment agencies may be the most prevalent tool in the redevelopment arsenal, but they are far from the only one. In fact, there is a host of federal, state and local programs, all aimed at revitalizing blighted urban areas.
The programs generally fall into one of four general areas: federal grants; federal or state tax credits for employers who locate within specific zones and hire a certain percentage of workers from that zone; loan programs; and special assessment districts.
However, virtually all these programs come with strings attached, and their effectiveness in dealing with the often-stubborn problems of urban blight has been mixed.
"No single tool is going to be the magic bullet that revitalizes an area," said Mott Smith, editor of The Planning Report, an L.A.-based urban planning newsletter. "It's how they are combined to produce the maximum leverage that the greatest impact on redevelopment will be realized."
Federal empowerment zones and state enterprise zones offer tax credits to companies that are located within a specific designated area and that hire employees from within that area. Such zones tend to be good tools for enticing companies into an area or keeping them from leaving. But the tax credits garnered only take effect after a company is up and running, and do not provide up-front money necessary to jump-start redevelopment, according to Tom Jirovsky, senior vice president at Kosmont & Associates, a local real estate consulting firm.
"You might get a couple of key companies to move into an area, but by itself, an empowerment zone or enterprise zone will not take a blighted area and make it whole," Jirovsky said.
After being denied in late 1994, L.A. finally was awarded a federal empowerment zone in January 1998. It covers the northeast San Fernando Valley around Pacoima, as well as South Central L.A. and parts of East L.A.
Federal tools that provide up-front funds include Community Development Block Grants, issued by the Department of Housing and Urban Development, and grants issued by the Economic Development Administration, for redeveloping abandoned military bases and aerospace sites. Much of the HUD money is specifically earmarked for affordable housing; in recent years, the overall amount of block grant funding has been decreasing, intensifying the competition for those funds.
Another federal program, known as Brownfields and administered by the U.S. Environmental Protection Agency, funnels federal dollars to abandoned and polluted industrial sites. It also grants subsequent tenants or owners immunity from pollution liability (as long as they don't cause further pollution). Since many of these sites are in older industrial neighborhoods, the Brownfields program can be a useful, if limited, tool to revitalize an area that few would want to enter for fear of liability, Jirovsky said.
Another tool designed to revitalize inner-city areas is the Community Development Bank, established by the City of L.A. in 1995, shortly after L.A. was initially denied an empowerment zone. The bank was designed to pump money into inner-city businesses that could not qualify for traditional bank financing. However, the bank ran into problems a large portion of its loans have gone sour, with recipient businesses either unable or unwilling to repay them. The bank is now the target of several lawsuits from businesses it has foreclosed on.
Smith said the high level of sour loans is an inevitable outcome, given the nature of the bank's customer base.
A far more popular economic development tool has been the business improvement district, or BID. In essence, a BID is a special assessment district in which property owners or businesses vote to assess themselves an extra tax to be used for the upkeep of the district, for such improvements as added security and sidewalk sweeping services.
While BIDs have sprung up throughout the region, they tend to be most effective in areas that are fairly robust but need a little sprucing up, Jirovsky said.
"BIDs can be effective in areas that have a significant business base already there, like Old Town Pasadena," he said. "They would not be my tool of choice for run-down areas, because you simply don't have a reliable tax base already there."
Just last month, a new redevelopment program entered the scene: Riordan's Project Genesis. The program was originally designed to allow private-sector corporations to contribute $250 million toward redeveloping 15 sites throughout the city, giving the companies naming rights similar to those bought by Staples to get its name on the new downtown sports arena. But three banks that agreed to participate in Project Genesis Wells Fargo & Co., Washington Mutual Inc. and BankAmerica Corp. balked at that arrangement. They favor putting $40 million into a pool of private- and possibly public-sector funds and setting up a committee to disburse the funds to various projects.
Because it is designed to tap into private-sector funds, Genesis stands a good chance of success, its supporters say. But the results of similar programs in cities like Philadelphia and Houston have been mixed. Critics fear the program could go the same way as previous ambitious redevelopment programs, like Rebuild L.A.
Planning Report editor Smith said all these redevelopment tools have their uses, but that substantial progress toward eliminating urban blight will be impossible without a more-concerted planning effort.
"The key is how you tie all these things together. If you want to bring back an area, you need improvements in housing, transportation, schools and commercial areas. No single entity is responsible for all this; it needs to be coordinated," Smith said.
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