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Demise of redevelopment agencies looms in the state of big challenges

There's nothing that could make residents of places like Washington, Oregon or Montana feel better about how their states are being run than to be plunked down for a few weeks in California and get an amusing and bemusing look at the dysfunctional workings of the nation's most populous state.

  

Everything about California is big, and that includes the massive budget deficit that has been the focus of governor-again Jerry Brown since he was sworn in a year ago as the literal political-comeback kid.

  

Now comes what may be the biggest challenge ever faced by local governments and economic-development entities in California. More than 400 redevelopment organizations around the Golden State are scheduled to go out of existence on Feb. 1 and some of their financial obligations will be absorbed into the general funds of local governments in those areas where the EDAs now exist.

  

Part of the predicted fallout will be that states like the aforementioned Northwest ones will be cranking up their California recruitment efforts looking to woo businesses away from a place where they don't seem to be wanted.

  

That would be an unfortunate misimpression about California because local communities and economic-development organizations across the state strive mightily to create jobs in their areas with innovative ideas and initiatives, despite the image the state policies have fostered.

  

Four of the largest redevelopment agencies in California are all in the job-hungry Coachella Valley. Those are La Quinta, Indian Wells, Rancho Mirage and Palm Desert - communities well known to Northwesterners who trek south to the desert each winter in search of sun.

  

Redevelopment agencies provide funding for road, sewer, lighting and affordable-housing projects across the state under a 65-year-old law that allowed a city or county to create a redevelopment area to address urban blight. RDAs receive related property-tax revenue increases, known as tax increments.

  

All this chaos came about because a legislature-approved plan conceived and proposed by Brown sought to coerce the RDAs to give up $1.7 billion in increased property-tax funds if they wanted to continue to exist. It was branded the "pay-ransom-or-die redevelopment system" by the California Redevelopment Association.

  

Part of the reason that the governor and legislature viewed the RDAs as a good place from which to divert revenue is that for all the good works done by the RDAs in creating opportunities for developers to invest in communities and transform downtrodden areas, examples of excess and abuse occurred.

  

To be sure, there have been blatant instances of excess on the part of some RDAs as eminent domain was sometimes used to seize private property that was then transferred to developers along with cash subsidies.

  

But even if sometimes developers seemed to get deals that smacked of favoritism,

many local officials and economic-development leaders would contend that the RDAs usually fulfilled their promise of revitalizing decaying communities and creating jobs.

  

Billions were invested over the decades to dramatically rebuild dilapidated downtowns, creating millions of jobs for Californians and hundreds of thousands of low-income housing units for growing numbers of homeless families.

  

Defenders of the value of redevelopment might logically suggest that killing RDAs is a little like saying examples of Medicare excess or fraud mean that Medicare should be abandoned.

 

During his first stint as California chief executive, Brown's mantra involved a focus on creating lower expectations for his state's citizens. In this new era of spending realities, he's being forced to impose lowered expectations rather than just urge their acceptance.

 

Part of his implementing lower expectations by fiat was to have local development entities settle for less and divert their funds to education, roads and fire departments as he sought to balance priorities while dealing with the $20 billion deficit.

 

The California Supreme Court, in a two-part decision, ruled late last year that the state had the right to kill the agencies. But it didn't have the constitutional right to condition their continued existence on their agreement to pay the state an annual fee based on their portion of property tax revenues.

 

So, unless there's an unlikely 11th-hour reprieve by the legislature, which even the governor's allies say he doesn't seem interested in achieving since it was the RDA organization that took him to court, the RDAs close up next week.

 

So what happens then? The real estate assets of the RDAs need to be sold off. But some obligations of longer-term nature that must be satisfied will become the obligation of city general funds.

 

That's likely to be the start of an extended period of financial uncertainty for cities and counties, as well as for the real estate market that will be flooded with several thousand commercial properties that will need to be sold at fire-sale prices.

 

George Skelton is a Los Angeles Times' political columnist who joined the newspaper the same year Brown was first elected in 1974 and thus has the unusual perspective of having covered both Jerry Browns.  

   

Skelton was a long-ago political-writing colleague at United Press International before he joined The Times so I emailed him last week to ask if we could visit about "the two Jerry Browns."

 

He followed up by writing a column on the subject following Brown's second State of the State address. Skelton recalled Brown's 1976 State of the State as "best remembered for one depressing, if prophetic, line: 'We are entering an era of limits.'

 

The state's current situation is clearly an immersion in an era of limits.

 

The now-73 year old Brown, during his 1974-82 tenure, was tagged as "Governor Moonbeam" for proposing that the state develop its own communications satellite.

 

Skelton says the old "Gov. Moonbeam" still exists. And Brown certainly proved that's true when, despite the financial travails of his state, he made it clear that reduced expectations don't apply to his unwavering support for a $100 billion bullet train from San Francisco to Los Angeles.

 

Brown summed it up with: "government should pursue ambitious ventures even during times of economic strife."

 

Local economic-development leaders might well shake their heads in frustration, agreeing with the premise of a state that needs to be "ambitious" in times like these, but not in pursuit of a bullet train.

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Nickels' likely entry will enliven race for open Secretary of State post

Former Seattle Mayor Greg Nickels' likely decision to seek the Democratic nomination for Washington Secretary of State may represent a sobering reality to the three Democrats already announced and campaigning. But it's also a bit of cold water on the hopes of those who figured he'd seek to regain the city's top elected position next year from "the accidental mayor."

 

While Nickels has given himself until Valentine's Day to make up his mind about a race that he says he didn't really begin to contemplate until "over the Holidays," it was clear during a telephone interview that he's already thinking about what he would seek to accomplish in the office. The chances that he will decide not to run are remote.

 

"I think this office, where all businesses documents have to be filed, can be a place for someone to act as an ombudsman for small businesses all across the state," said Nickels, who would be seeking, along with the other Democrats, to be the first from their party to win the Secretary of State job in this state in 50 years.

 

The other Democrats include Kathleen Drew, a one-time State Senator who now works for Gov. Christine Gregoire and who is the only woman seeking the Democratic nomination. She has already received some important endorsements. Those include former King County executive Ron Sims, who recently returned from a stint in an Obama-Administration post, and King County Assessor Lloyd Hara, who is holding a fund-raiser for her next month.

 

The two Democratic legislators who have filed are Jim Kastama, a state senator from Puyallup who chairs the Economic Development, Trade and Innovation Committee (EDTI), and Rep. Zack Hudgins, a former employee of both Amazon and Microsoft.

 

The lone Republican in the race, and the first of any of the hopefuls to announce, is Kim Wyman, protégé of outgoing Secretary of State Sam Reed for a decade in the Thurston County assessor's office before being elected to replace him eight years ago when Reed decided to seek the state office.

 

Wyman notes that she has "already demonstrated the ability to perform the functions of the Secretary of State's position, like elections supervision and business filings, at the county level." She, of course, has the endorsement from Reed to replace him.

 

If the others of both parties hoping to succeed Reed were taken aback by the prospect of campaigning against Nickels, many Seattleites who were hoping he would seek to reclaim the mayor's job in 2013 were surprised and disappointed.

 

There was a sense on the part of business leaders and others that Nickels, who actually finished third in the 2009 primary, was merely supposed to be getting a signal from many who wished to send him a message about a perceived arrogance, not oust him from the job.

 

For those, who had no interest in having Mike McGinn as mayor but didn't care for businessman Joe Mallahan, it was an interesting lesson in not wasting your vote to send messages. So as McGinn's relations with the City Council, the governor and the business community have soured, many took to referring to him as "the accidental mayor" and were awaiting Nickels' effort to win back the office.

 

Nickels, 56, admitted in our telephone conversation that "in the back of my mind there is a sense of some unfinished business" for the job he held for two terms. "But it's time for me and for the city to move on."

 

Since being rejected by the voters, which Nickels describes as "a very humbling experience that gives you a different perspective on things," he has had a teaching fellowship at Harvard, served as a public delegate to the United Nations and traveled to the Ukraine to advise mayors there.

 

He describes those experiences as "two years of experimenting" to determine what he'd do next. Now, he says, the role of Secretary of State would be "a logical continuation" of his 35-year love affair with public service.

 

Wyman, who says she expects a number of other candidates to emerge before the filing period begins in June, has already visited 15 counties around the state and is "starting to build" a strong campaign team. She has so far raised about $25,000, noting that "as you get into races down the ballot, it's much harder to raise money."

 

Drew became the first Democrat in memory to be elected to her east King County seat in 1992, unseating eventual GOP gubernatorial candidate Dino Rossi before losing to him four years later. She has since been involved in higher education at the UW Bothell campus, wrote the state's ethics law, worked closely with tribes and been involved in governmental reforms efforts.

 

Drew offers frankly: "I think I will have a lot of support from women."

 

The two Democratic legislators, Kastama and Hudgins, would have expected to draw from a traditional base of financial support for Democrats in a down-ballot contest that stands to draw less attention than the high-visibility race for the open gubernatorial seat, for president, U.S. Senate and congressional races.

 

Nickels, whose entry will change that fund-raising dynamic, addresses in advance what's likely to be a key political shot others take at him, saying "I'm not looking at this as a stepping stone to any other office."

 

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Candidates should be pressed to assume responsibility for political attack ads

You didn't need to be a fan of Newt Gingrich to feel bad for the guy because of all the political dirt dumped on him during the Iowa-caucuses campaign. And you didn't need to be a foe of Mitt Romney, who finished at the top in Iowa Tuesday, to find his avoidance of responsibility for the deluge of attack ads aimed at Gingrich distasteful.

 

And you don't need to be a schooled political observer to sense that the Iowa mess was only the undesirable opening salvo of what is likely to be a dirt-encrusted presidential campaign over the coming months, particularly once we enter the general-election phase.

 

So to the electoral masses, Iowa likely brought a new level of disgust with the way politics has come to be defined, and the hunger for something, and someones, different.

 

As far as national-level politics goes, we can't do much other than try to tune out the flood of campaign diatribe. But perhaps influentials of both parties in Washington State, who desire a more refreshing odor from the political campaigns at the state level, can force a cleaner conduct on candidates in the most important Washington State race this year.

 

We're referring, of course, to the race for Washington governor, where Republican Atty. Gen. Rob McKenna and Congressman Jay Inslee, a Democrat, face free rides to their parties' nominations to engage each other in the November General Election. Gov. Chris Gregoire isn't running for re-election and possible competitors for either party's nomination have been dissuaded from fouling the political fray with competition.

 

 So the looming one-on-one battle in this state threatens to unfold as a long and tedious campaign marked by extensive negative messaging. That's an eventuality that none of the many citizens already disgusted with the national political process should need to endure in Washington.

 

The way attack advertising has evolved is that it's carried out by organizations supportive of, but not directly tied to, a candidate. That allows the candidates to vow that they are going to wage a clean campaign knowing that such supporting organizations will carry the trash.

 

And the media outlets have done poorly in pressing candidates to take a position of agreeing with or disavowing negative comments about their opponents. It's not that difficult to say to a candidate at a press conference: "we know this was not a message directly from your campaign organization, but you must agree or disagree with it."

 

Perhaps the simplest expectation is one the iconic William Rucklshaus, in a must-read op-ed piece in Sunday's Seattle Times, listed among the things we need to insist on from our political candidates: "Tell us why we should vote for you, not what's wrong with your opponent."

 

The challenge of asking candidates to step out of the mud hole in which many now operate during campaigns is that people other than the candidates increasingly are the conveyors of negative messages while the candidates themselves pretend they're cloaked in campaign purity.

 

That problem is growing worse as social media becomes more pervasive. And, in fact, with no way to control the over-the-top negativity, frequently false, of bloggers and the like, any idea for positive change in how candidates campaign may be a waste of time.

 

Nevertheless, here's a New Year idea that could at least minimize the negative campaigning that many fear may lie ahead in the Washington governor's race. And it's an idea that only one of the candidates needs to endorse since one doing so would pretty much force the other to also agree to go along.

 

The idea is that the gubernatorial candidates agree that when any negative advertising is aired or disseminated, they will say either that they say either "I agree with that," or "I don't agree with that." No responses like "I don't really have an opinion on that" should be left unchallenged.

 

This isn't to elicit a promise to run a clean campaign. Every candidate promises that now. Rather it's pressing for a promise from each candidate to take responsibility for all messaging on their behalf. 

 

Such a small step could make negative campaigning more uncomfortable for candidates. And that would represent a long step toward Ruckelshaus' vision of candidates spending time talking about themselves rather than their opponents.

 

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Ex-congressman Baird's ethics quest could gain national focus after 60 Minutes probe

Former Washington Congressman Brian Baird's long quest to bring a small note of integrity to the dysfunctional legislative body from which he retired a year ago has finally, with a 60 Minutes episode titled "Honest Graft," gotten a bit of national visibility for an idea whose time has long since come.

 

And it's possible that, as irate citizens across the country seek ways to express their frustration at the implications of the abject failure of the so-called supercommittee to come up with any agreement, Baird's idea may become a focal point for citizen action.

 

During the last three of his six terms representing the state's 3rd District, Democrat Baird sought unsuccessfully to pass, or even just gather support for, what he called the Stock Act. It would have barred members of Congress from doing stock transactions in areas they regulate, in essence, prohibiting their investing in a manner that those in the real world call Insider Trading.

 

For ordinary citizens, reaction to Baird's proposal would be a laughable "well, of course." But in a place whose mantra is "the rules we make for you don't apply to us," seeking to force action by the lawmakers on one small, self-imposed ethical constraint could become a rallying point for a fed-up public.

 

The thrust of the CBS segment that aired this month is that lawmakers often do make stock purchases and trades in the very fields they regulate. While ordinary citizens could be jailed for engaging in the kind of investment shenanigans that those in Congress involve themselves in, there's not even an ethical concern among lawmakers.

 

Baird may be able to gain far more visibility as a former lawmaker than he could as a member of Congress and the hope has to be that this first shot across the bow of Congress will echo down the months of the coming election year.

 

And a sure way to take this worthwhile campaign viral is to share in every possible social-media fashion 60 Minutes reporter Steve Croft's questioning of current House Speaker John Boehner and former Speaker Nancy Pelosi at their respective news conferences.

 

For viewers of the ineptitude with which both Boehner and Pelosi tried to answer Croft's questions about whether their investment practices were at least conflicts of interest, the thought that had to occur was "Who elects these people?" The answer, unfortunately, is people like us elect them. Shame on us.

 

Boehner, for example, bought a bunch of health-care-related stock during the health-care reform debate of 2009. And when Boehner's efforts to kill the so called "public option" succeeded, those stocks skyrocketed.

 

Pelosi, meanwhile, had gotten in on a series of lucrative stock Initial Public Offerings. One of those involved an enormous number of Visa shares that Pelosi purchased while she was working on legislation that would have hurt credit card companies. Two days after purchasing the stock at $44 a share, and after the bill was put on long-term hold, Pelosi's stock shot up to $64 a share.

 

Ideally, members of Congress will be pressed, in any news conference or appearance before business organizations or other groups in the coming election season, to explain why they fail to support the legislative concept for which Baird sought support in Congress.

 

Fortunately, Pelosi's struggles with the simple task of answering a question from the 60 Minutes reporter have become pervasive on YouTube, and should remain so down through election year as a backdrop to those questions posed to members of Congress seeking to stay in office. It should be watched by millions, and shared with millions more.

 

At a time when we're already dealing with "pledges" from candidates for political office, a much more logical pledge to press upon candidates than a no-taxes pact is: "Will you support the current version of Stock Act legislation in the House next year?"

 

And no candidate forsaking Congress for a run for state office should escape being forced to explain to their hoped-for statewide constituency why they lacked an interest in imposing ethical conduct at the most basic level on their fellow lawmakers and themselves by supporting Baird's efforts.

 

In this state, that would mean the question would be posed to Rep. Jay Inslee, who is running for governor. And why shouldn't he be pressed to answer that question? Hopefully, it will be posed early on in the campaign. 

 

Baird's 3rd District successor, Republican Jaime Herrera Beutler, announced earlier this month that she is signing on as a co-sponsor of a bill similar to Baird's plan, this one called "Stop Trading on Congressional Knowledge Act," sponsored by Minnesota Democrat Timothy Welz.

 

A total of 92 lawmakers have signed on as co-sponsors, including Washington Democrats Rick Larsen and Jim McDermott, though not Inslee.

 

But those wise in the way Congress works, or more accurately doesn't work, will note that the bill was assigned by House Leadership to the Subcommittee on the Constitution, about as distant from a subcommittee that has anything to do with ethics, finances or investments as they could get.

 

Howard Schultz' quixotic appeal to CEOs to halt donations to re-election campaigns of members of Congress because of their inability to progress beyond stalemate is a bit impractical because only candidates that CEO types contribute to would be impacted. Candidates supported by groups like unions and trial attorneys would actually benefit if Schultz' call drew CEO response.

 

But a call for denying donations to any member of Congress who doesn't pledge to support the specific legislation that Baird long championed might have a whole different outcome in terms of response from those seeking to remain in Congress. And since the demand for such a pledge would be coming from Democrat and Republican voters alike, it might be the seed that could grow into a renewed sense that there are things that those from all parts of the political spectrum can actually agree upon.

 

And it would thus represent a small step toward acceptability for a legislative body that badly needs to be viewed by the American public as not just trustworthy, but simply relevant.

 

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Access to growth capital could challenge state life-sciences sector's bright future

Washington State's life-sciences sector has remained, through the economic downturn, a jewel in the state's economic development crown. But the challenge of accessing capital that bedevils the industry's emerging companies, including the possible demise of the Life Sciences Discovery Fund, could hinder future growth.

 

The role biotech and biomedical companies have come to occupy as one of Washington's five largest and fastest-growing sectors, generating tens of thousands of high-wage jobs and more than $10.5 billion in economic activity, creates an important anchor for the state's economic future.

 

But as the Washington Biotech & Biomedical Association (WBBA) prepares for its annual meeting next week, in partnership with The Governor's Life Sciences Summit, there's an ongoing focus on seeking to ensure that emerging companies in the industry find the growth capital they need. And that could be increasingly challenging.

 

"With 70 percent of our companies having 50 or fewer employees, access to capital is the greatest challenge we face," said Chris Rivera, WBBA president.

 
 

 

An important part of that funding has been the Life Sciences Discovery Fund (LSDF), the program created by tobacco-settlement dollars that came into existence in 2008 and has been championed by Gov. Chris Gregoire as a key to fostering more biotech innovations and jobs in Washington.

 

But it has taken deep cuts each session as legislators grappled with yawning state budget deficits, and now could face elimination.

 

Rep. Glenn Anderson, the Eastside Republican who is one of four legislative trustees for the fund, says "it's an open question whether the fund will survive" the next session's budget cuts.

 

"The fund has done a good job of encouraging basic science and marketable, actionable, investable outcomes," Anderson said. "But I'd say there's only a 50-50 chance it will survive and if it doesn't survive, I think that would be shortsighted."

 

Rivera puts numbers on the fund's successes to provide definition to shortsightedness.

 

"LSDF awardees have been able to leverage their grants and bring in $9 for every $1 awarded," he said. "These are real dollars from out of state.  This has led directly to job creation, and great innovation in our state.

 

"I believe that LSDF has proven to be a smart investment by our state into a sector of great current economic value and future potential," he added. "Other states have poured hundreds of millions into life sciences, as they see the potential economic value of this sector and are willing to invest strategically."

 

Beyond the fund, WBBA has mounted some initiatives, as have supporting organizations, in seeking to develop alternative sources of capital, given both the now-challenged traditional lending sources and the problems facing the venture capital industry.

 

Bruce Jackson, vice president for business development at EnterpriseSeattle and ex-officio member of WBBA's board, says that despite the success of the biotech and medical-device sector, these are "clouded times" for young companies seeking to ramp up.

 

"In addition to the fact federal regulations can create a headwind for companies, access to capital for some deserving companies can be difficult," Jackson said.

 

EnterpriseSeattle's year-old partnership with the City of Federal Way in a medical-device incubator called Cascadia MedTech Association is an innovative approach to helping grow the industry, though Jackson concedes "the model hasn't been proven yet."

 

"The companies we're supporting must transition from being supported by grants to creating cashflow," Jackson added.

 

WBBA itself touts the program it created called VIP Forums, through which quality investors and strategic partners (VIP's) are invited to Seattle for a showcase of the most promising life science companies and research opportunities.

 

In addition, in spring of 2009 the association formed a non-profit angel network called WINGS, whose role is to close the early-stage funding gap to speed medical-technology innovation "from lab bench to patients."

 

The gathering of industry leaders and others for whom the industry is part of the economic hope for the future will likely hear an upbeat assessment as they review the WBBA's third annual Life Sciences Economic Impact at their gathering on November 18 at Meydenbauer Center in Bellevue.

 

Comments from the governor, who will be attending her last WBBA annual conference, and University of Washington President Michael Young, attending his first, are likely to focus on upbeat prospects for the sector's future. But both may also share concerns about the impact of funding availability on that bright future.

 

And a comment from Rivera during an interview this week could set the stage for some discussion among attendees: "I understand and know that these are difficult times, but I hope that our state leaders are strategic in where they place our precious resources, and help this state maintain its competitiveness nationally and globally."

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