Ovrom's Proposed Shake-Up of CRA Faces Cultural, Institutional Hurdles

By HOWARD FINE
Staff Reporter

As long-time City Manager in Burbank, Bud Ovrom was, in his own words, "used to snapping my fingers and getting things done."

Now, barely one month into his tenure as chief executive of the city's Community Redevelopment Agency, Ovrom is proposing an ambitious restructuring. He plans to thin out the ranks of top management, reduce the number of area project chiefs and de-unionize them, and create a new housing department within the agency.

"We've really passed beyond the point of Band-Aids for this agency," Ovrom said last week. "I would have liked to wait a little longer, but with the (budget) situation in Sacramento, we simply can't wait."

But, as Ovrom is quick to acknowledge, snapping fingers in L.A. is likely to get a different reaction than in Burbank. He could be about to get a lesson on how huge bureaucracies, special interests and multiple layers of oversight can put the skids on even the most benign proposals, let alone the controversial plan that Ovrom has put forward.

"This is a major bet on his part," said Larry Kosmont, an economic development consultant who has run four smaller redevelopment agencies. "There's no doubt that his restructuring plan comes with great risk."

How that risk plays out will be seen as early as the end of this month, when Ovrom's plan is to go before the CRA's seven-member board. If the board votes in favor, the plan must go to the City Council for final approval.

Ovrom is relying on the respect he's garnered for his achievements in Burbank, deference to his honeymoon period and, above all, the fact that the CRA is likely to lose millions of dollars in funding to Sacramento as the state tries to balance its books.

L.A. City Councilman Eric Garcetti, chairman of economic development committee, says he supports Ovrom's reorganization plan.

"We have too much overlap of our economic and community development agencies in general," said Garcetti, explaining that the plan could provide more autonomy to local communities. "Los Angeles could benefit from having a more streamlined, more regionalized and more accountable structure at the CRA."

In his budget, Gov. Gray Davis has proposed diverting $250 million in redevelopment property tax revenues to Sacramento. The CRA's share of this is about $7 million, nearly 10 percent of its $76 million budget.

The typical response to such a revenue loss is cutting staff and Ovrom's plan does include an immediate staff reduction to 208 from the current 220 and down to 180 by June of next year.

But his plan goes beyond these reductions. Ovrom wants to trim the number of staff directly reporting to him from the current seven to just two: one for all the CRA projects and one for internal affairs. "Seven reports is way too many, especially since I have to spend a good deal of my time reporting to the CRA Board, the Mayor and the City Council," he said.

In what could be his most contentious move, Ovrom wants to slice the number of project managers to seven from 16, in effect turning project managers into regional CRA administrators. Each administrator would oversee a number of CRA Project Areas in his geographical zone.

Ovrom wants these administrators to be non-union and serve at the pleasure of the chief executive. This would sharply reduce union and civil service influence within the agency, which is bound to stir strong opposition from employee unions.

When added to the typical bureaucratic inertia found in many large government agencies, this alone could generate enough opposition to derail the plan.

"He is going to run into the same type of problems that managers everywhere run into when trying to change the direction of large organizations," said John Molloy, a development consultant who headed the CRA from 1993 to 1997. "I truly wish him a lot of luck."

Focus on housing

Another element of Ovrom's plan could also pose problems: creation of a housing department within the CRA. Ovrom says the department is necessary because the major focus of future CRA projects is going to be housing.

"When you look at what L.A. needs, it's housing, not more retail projects," Ovrom said. "So we have to be equipped to handle this."

But there already is a city agency that handles much of this work: the Housing Department. And Mayor James Hahn is in the midst of building a separate $100 million Affordable Housing Trust Fund. The creation of a new housing department in the CRA could easily be seen as treading on others' turf.

Ovrom said he intends for the CRA's housing department to work closely with the city's Housing Department. "The goal is to work together, not at cross-purposes," he said.

Even if his plan wins approval, he will need to carry it out and the CRA's culture has proven resistant to change over the years as administrators have come and gone.

"There's no question the CRA is dysfunctional," Kosmont said. "A large part of the problem is that everyone has deferred responsibility and floated the key decisions to the top ranks. Not enough gets done in the field."

Ovrom said the CRA culture has been largely responsible for the stalling out of several major redevelopment projects, particularly the Valley Plaza project on Victory Boulevard and the downtown San Pedro project, both of which have been in planning stages for decades.

"We have to start moving these projects out the door," Ovrom said. "And to do that, the culture must change inside the CRA."

Another challenge facing Ovrom is that 16 of the 34 CRA project areas are bringing in less in tax revenues than they were when they were formed. Many of these project areas were created in response to the 1992 riots and line narrow street corridors, making it very hard to assemble properties into viable redevelopment projects.

"These deficit project areas may need to be merged with other project areas or terminated if projects can't be found to save them," Kosmont said.

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