The legislation closing down California’s redevelopment program refuses to recognize loans, suck as Santa Clara’s, between RDAs and their sponsoring cities. There’s a reason: These arrangements were key mechanisms for diverting public money to questionable uses.
For example, L.A.’s RDA diverted buckets of money out of its affordable housing fund – about $900,000 in 2010 alone – into unspecified “overhead,” according to State Controller John Chiang’s 2010 audit. Palm Desert transferred RDA money to spruce up a four-star private golf resort. Pittsburgh’s RDA gave $16.6 million to that city’s general fund for unspecified future projects, losing interest that properly belonged to the agency.
No discussion of municipal malfeasance would be complete without an example from Bell, whose RDA transferred $1.2 million of affordable housing funds into a slush fund for city officials – this in a city where almost one household in six lives under the poverty line. Eight former city officials are on trial and face significant prison terms if convicted.