Marjorie Murray, who runs the Center for California Homeowner Association Law, read my post the other day about the bad deals cities have been making to get sports stadiums, and she sent me this note, which she has graciously allowed me to post here. Way back in 1994, Marjorie wrote an article for California Lawyer in which she pointed out how prison construction was at that time the "silver bullet" for local governments, and how it had the potential to turn bad on them...which it has. And CIDs fit right into this picture of searching for the silver bullet. Read on:
Evan: I read with interest the posting on sports stadiums as a failed economic development tool for local governments.
Cities and counties across the country are always looking for the "silver bullet" that will get revenues flowing into local coffers.
Nearly twenty years ago I wrote an article for California Lawyer on state prisons as an economic development tool for California local governments. ("Build it and They Will Come," (1994.) Cities and counties, however, chose to ignore the not-so-hidden costs of building a prison in their midst: wear and tear on infrastructure, increased demand for housing needed by prison staff, increased need for police, etc.
Now the prisons are so over-crowded that the courts have ordered inmates back to local governments, which will have to assume the cost of housing them in county jails.
A more recent "silver bullet" has been the thousands of California CIDs, seen by local governments as the ATM machine that would generate sky-high tax revenues. Instead, hundreds of CIDs throughout the state have become wastelands of foreclosed homes whose owners can't pay their mortgages, let alone property taxes. Just ask the City of Stockton if CIDs were the answer to their economic prayers. The city declared bankruptcy in June after going on a spending spree in anticipation of all those tax revenues that never materialized.
There truly is no "silver bullet" for local governments. No one prison, one sports stadium, or single 6000- home CID can rescue an entire city or county. California local governments need to wake up to this fact.
Anyone interested in the 1994 California Lawyer article will find it here at this link: http://www.callawyer.com/clstory.cfm?pubdt=199404&eid=14430&evid=1
Marjorie Murray, President
Center for California Homeowner Association Law
3758 Grand Ave., Suite 56
Oakland, California 94610