RESEARCH SHOWS HIGH COST FOR REDEVELOPMENT AGENCIES.

Byline: David R. Baker Daily News Staff Writer

California's redevelopment agencies do not pay their own way, taking in $170 million each year in subsidies from other government groups, according to a study released today.

The report from a nonpartisan think tank also argues that redevelopment agencies, created to rejuvenate blighted neighborhoods, should face greater state oversight and share more of their property tax income with other local governments.

``We are looking at well over a billion dollars in the last 10 years that was diverted from other local entities, such as counties, schools and special districts,'' said author Michael Dardia, a research fellow with the Public Policy Institute of California.

Although the study seeks only to establish redevelopment's price, and does not delve into whether the expense is worthwhile, redevelopment foes saw in it proof that the agencies waste public money.

``This is the largest form of corporate welfare in the state,'' said Assemblyman Tom McClintock, R-Granada Hills, whose proposal to dismantle redevelopment agencies was defeated last month in an Assembly committee.

``Is it right to take the taxes that fill the potholes, that are supposed to provide police and fire protection, and fork it over to retail chain stores, sports franchises and private interests?'' McClintock said.

Redevelopment officials and supporters argued that the study's findings were no surprise. Although they took exception to some of Dardia's methods, they said it was impossible to fund redevelopment projects solely on agencies' property tax income.

They argued that redevelopment agencies' worth should be measured by their ability to rescue neighborhoods snared in poverty. Before joining the state Legislature, Assemblyman Tom Torlakson, D-Martinez, worked on redevelopment efforts in Contra Costa County, trying to bring investment into areas marred by crack houses and violence.

``We had places so deteriorated that people had to watch TV lying down on the floor to avoid the gunfire,'' Torlakson said. ``We created thousands of jobs in these areas, and helped erase the blight.''

Dardia agrees that the agencies have benefits. His study, he said, is merely an attempt to determine whether other government bodies are subsidizing those benefits, and if so, by how much.

Most of the funding is supposed to come from property taxes. Redevelopment agencies receive a cut of the property taxes generated within the neighborhoods they cover.

To find out whether the agencies receive a subsidy, Dardia looked at 38 redevelopment project areas, including North Hollywood and three others in Los Angeles. He examined how much their property values had risen between 1983 and 1996 and compared the increases with those from similarly impoverished neighborhoods in the same cities.

Since redevelopment agencies keep, on average, six times more property tax revenue than they give back to cities and counties, Dardia concluded that redevelopment areas must grow six times faster than similar, nonredevelopment neighborhoods in order to prove that the agencies were responsible for all of the growth.

John E. Molloy, the administrator for Los Angeles' Community Redevelopment Agency, said his agency never has claimed full credit for growth within the areas it covers.

Instead, that growth comes from a combination of the agency's efforts, economic trends and private investment spurred by the agency.