West Covina Renewal Agency Rebuts Grand Jury’s Criticism

WEST COVINA —  Recent Los Angeles County Grand Jury reports critical of the Community Redevelopment Agency’s management are generally inaccurate and without substance, according to the agency response submitted to Los Angeles Superior Court last week.

The grand jury’s reports, issued in May and June, concluded that the city has lost an undetermined amount of potential revenue because projects were loosely monitored. The reports were also critical of the city’s failure to set aside enough of its tax revenue to provide low-income housing as required under state law.

At same time it filed the response, the West Covina agency also submitted an independent analysis of the grand jury’s reports, written by A. J. Wilson of Management/Development Associates.

“The grand jury report was prepared by persons who apparently had very limited knowledge of the redevelopment process and law,” Wilson’s analysis stated, adding that many findings of the grand jury’s auditors were unsubstantiated. But he also reported that the auditors accurately highlighted the agency’s lack of documentation of its procedure, a practice that could create problems later.

Some Points Conceded

In its response, the agency said some of the reports’ recommendations are valid and will be complied with. The bulk of the changes will involve formalizing administrative policies in guidelines, city Redevelopment Manager Chester Yoshizaki said. The agency will also consider the grand jury’s suggestion that all agency data be audited by an outside agency before being filed with the county or state, he said.

The grand jury’s term expired in July. Yoshizaki said he does not expect the new grand jury to take any further action in the matter.

Last Monday, the City Council, meeting as the Community Redevelopment Agency board, decided to hold a study session to review the policy statements in the response. No date has been set for that discussion, which will be open to the public, Yoshizaki said.

The agency came under the grand jury’s scrutiny after “continuing adverse media attention concerning the relationship between the agency and its developers,” according to the jury reports.

Defense Offered

The reports concluded that because the agency negotiates with a single developer for each project, the agency board is usually put in the position of accepting proposals as presented. In its defense, the agency said the majority of projects involved negotiations with existing landowners or businesses.

The agency noted that 13% of the projects and developers it approves are selected on a competitive basis, including the two largest projects undertaken by the agency, the Lakes and Eastland Tower.

The agency seeks out developers to build the remaining projects, such as family restaurants, Yoshizaki said.

In such cases, he said, few firms may be interested in bidding on the project, creating non-competitive situations. “Real estate just doesn’t work that way. A lot depends on the market,” Yoshizaki said. “You can’t simply put out a request for proposal. Some restaurants may not be ready.”

In response to the grand jury’s contention that the agency has no formal guidelines to evaluate the feasibility or cost of a project, the agency submitted a “development information sheet” for financial analysis of projects, which it said auditors overlooked.

Housing Requirement

The agency also challenged the grand jury’s criticism of its policy on developing low- and moderate-income housing.

State law requires that 20% of tax revenues allocated to the agency be used to increase and improve low- and moderate-income housing in the community. But the agency pointed out that under certain circumstances, cities can exempt themselves from the obligation.

“We may meet housing goals by other means, (such as) encouraging private developers to provide low- to moderate-income housing,” said Assistant City Manager Leonard Eliot, who also serves as the agency’s assistant executive director. “The law does not say we have to put aside 20% every year.”

Agency Concurs

The agency agreed with the grand jury’s recommendation that it adopt a formal set of policies regarding the low- and moderate-income housing fund.

The agency staff has used the state Health and Safety Code as a guide, Eliot said. It is now developing administrative procedures to identify what action is needed, a schedule for compliance and the documentation required.