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What's the deal?

The Santa Barbara Plaza flap raises concerns about the Community Redevelopment Agency's workings.

May 02, 2008

The stalled Santa Barbara Plaza development, detailed this week in The Times, suggests how badly a project can be bungled when incentives are not in line with goals. Christopher Hammond, a politically connected developer of extremely questionable credit- worthiness and reliability, was able to draw $15 million in public funding for a retail and housing development at the foot of Baldwin Hills that remains unbuilt. Despite a history of bounced checks, warnings from City Controller Laura Chick and no shortage of lawsuits against Hammond from unpaid contractors and creditors, the city (including former Mayor James K. Hahn and former and current City Council members Mark Ridley-Thomas and Bernard C. Parks) continued to work with the developer.

In principle, providing public "catalyst" funding for retail projects in distressed areas makes sense. Indeed, one of the ironies of the Santa Barbara Plaza project is that several years ago Hammond's wife, Ayahlushim Hammond, then the downtown regional administrator for the Community Redevelopment Agency, funneled money from her area to his project in South L.A.

That might seem a logical step: moving funding from an area that doesn't need it to an area that does. But that assumes the movement of money is subject to due diligence. Instead, Hammond received millions in taxpayer money without having to complete the kind of credit check you would need to perform to get a slightly better rate on your mortgage. Market discipline tends to be forgotten when public funds are too easily obtained; meanwhile, city officials and agencies can avoid responsibility when grandiose projects fail. Nobody, in other words, has enough incentive -- or enough at risk -- to see the project through.

For The Record
Los Angeles Times Saturday, May 03, 2008 Home Edition Main News Part A Page 24 Editorial pages Desk 2 inches; 53 words Type of Material: Correction
Redevelopment: An editorial Friday incorrectly reported that Ayahlushim Hammond, while working for the Community Redevelopment Agency, transferred money from her area to a project her husband was directing. Officials investigated allegations to that effect and concluded that Hammond disclosed her relationship and that others were responsible for the CRA's handling of the project.

The CRA has long struggled to deliver funding for promising but difficult projects, and we probably wouldn't want its decisions to be completely insulated from politics. But there is also reason to believe that the CRA's structure of regional administrators putting together development deals and the agency's insufficient protection from political influence result in too many sweetheart arrangements.

In this case, the CRA apparently paid nearly half a million dollars over market value for two lots that had not even been appraised. Rather than being disciplined for that action, it has been rewarded, recently winning City Council approval to purchase two more properties at the site for $5 million. Given Hammond's failure to make anything happen -- and the desperation around this project in an election year that will see Parks and Ridley-Thomas competing for a county supervisor seat -- this new purchase may be the least-bad option. But this is no way to run a shopping mall.

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