After Redevelopment, LA May Consolidate Economic Development Efforts

A consulting team has proposed a whole new post-redevelopment economic development structure for Los Angeles.

Unsurprisingly, the recently released report [PDF] by HR&A -- commissioned by L.A.'s chief administrative officer and chief legislative analyst -- calls for the creation of a consolidated Economic Development Department. But if the proposal is adopted by the city, it would represent revolutionary change for a city that has long been characterized by a large, sluggish bureaucracy that has difficulty being nimble enough to compete on economic development.

Perhaps most interesting is how HR&A proposes to fund the new operation: With the money the city now receives in its general fund because redevelopment was killed. One oft-overlooked point about the end of redevelopment is that it created a "windfall," if one might call it that, for city general funds. Redevelopment agencies typically received somewhere between 60% and 100% of property tax increment from inside redevelopment project areas. Now that the money is distributed to taxing agencies just like all other property tax money, cities are getting about 15% of it into their general funds.