RDA financial blunder
District 3 paid the price
I spent a good deal of my professional career as a financial analyst at IBM. So, when I look back at San Jose’s history I see, sadly, far too many moments of budgetary incoherence, bad judgment, and wishful thinking.
But because we always talk about the Housing Department’s reckless spending or pension negotiations (worthy topics, both) let me set the Wayback machine back to 1975, so we can remember a financial blunder that is quickly going down the memory hole: The San Jose Redevelopment Agency.
https://www.sanjoseca.gov/home/showpublisheddocument/11319/636664736085200000
Take a stroll through downtown San Jose today. There are fantastic small businesses, impressive historic architecture, and potential galore. But taken as a whole, it’s the most moribund big city downtown in all of California. And for every vintage streetlight there are scores of boarded up storefronts, piles of trash, lost unhoused residents, and generalized decay.
You wouldn’t know it, but this area — our beloved downtown, was the recipient of more than $1 billion (some say up to $3B) in taxpayer largesse from the 1980s through the 2000’s to “redevelop” the area. Guided by the Redevelopment Agency, taxes were redirected to help “jumpstart” the downtown, which means that corrupt subsidies rained down on developers like never ending summer shower. The common conversation 30 years ago was — downtown just needs more people to sustain these businesses and that’s why they fail. The City has beat on the drum of more people more people for decades. Well, we have more people and yet less small businesses survive in downtown and the RDA did not help.
Press conferences, academic papers, stirring speeches heralded the arrival of what has to be one of the nation’s biggest planning face-plants and a monumental fleecing of local and state taxpayers.
Where did the billion go? Perhaps as subsidies to create the Fairmont Hotel (bankrupt as of 2018). Or subsidies for the Pavilion retail shopping center (bankrupt, now a server farm). Or Camera 12 which had decades of subsidies and failed. Or providing our pioneering grocery store Zanottos, multiple loans and yet it too failed. Or when Safeway moved in and the RDA invested in the garage and then de-invested — Safeway left because parking is crucial to success. In downtown, we moved out many small businesses in the hopes of anchor stores that never came and gave subsidies to scores of businesses that took their slice of the pie, went belly-up, and departed in the dead of night.
Not to mention the fortunes redirected from property taxes that could’ve gone to schools and the city itself.
With this election we will bid adieu to the last of the officeholders who helped navigate this horrific fiscal shipwreck. Let’s hope a new generation of leaders can learn from their predecessors’ mistakes and chart a more modest, cost-effective, and accountable path for downtown that celebrates small businesses.
Because that $1 billion is gone — and we’ll never get it back. And the culture of those small businesses is gone — and we’ll have do much more than ever before, to get those back.
So I’d set the Wayback machine to January, 1975, when the city voted itself the Board of the Redevelopment Agency, and vote No.
