Pursuit of agency profits: An evaluation of community redevelopment agencies in Florida

The influence of public choice and economic theory in public administration has increased the pressure upon government to "act like a business." Accordingly, cities have become increasingly entrepreneurial, creating redevelopment agencies and venturing into public/private partnerships with mixed results. A key financial tool for redevelopment agencies is tax increment financing (TIF), which yields increased agency revenues from increased property values. As agency activities increase property values, agencies are rewarded with increased revenues, much like profits for a business. The cyclical nature of TIF encourages a self-perpetuating tendency towards economic activities among self-interested, opportunistic agency actors, namely agency staff, elected officials, and business stakeholders who benefit from agency economic successes. Through a survey of Florida agencies and in-depth evaluation of five case studies, this research explores a series of questions regarding aspects of community redevelopment agencies: agency activities (either commercial or social), outcomes (agency TIF profits), and three theoretical constructs affecting the implementation environment (participation by business and non-business stakeholders and CRA structure as related to agency decision-making independence). The findings indicate that agencies conducting a predominance of commercial activities generated the highest rate of agency profits in the form of TIF revenues. In the implementation environment, the choice of agency activities was influenced by stakeholder participation. Agencies with mostly business stakeholder participation tended to conduct mostly economic activities, during both plan adoption and implementation. Conversely, agencies with predominantly non-business stakeholder participation, especially as a shift from business dominance, tended to prioritize social activities. Regular stakeholder participation, particularly by business interests, tended to increase as agency profits increased, underscoring the cyclical tendency towards economic activities. CRA structure varied among the cases. It appeared that more economic activities tended to occur when CRA structures were more autonomous, with a high degree of decision-making independence from parent local governments. However, while some agencies maintained high degrees of autonomy over time, autonomy was rescinded in others due to agency mishaps. Overall, economically-oriented goals in these agencies tended to win out over socially-oriented goals unless and until the under-represented "public" became unusually involved (revolts) or agencies were radically redirected by dissatisfied elected officials.