It’s a distant and largely forgotten memory, but in the mid-2000s the city of Anaheim pursued a novel idea for bigger cities. Instead of pursuing development policies based on the usual array of central planning tools, the city decided to “pursue a market-oriented, freedom-friendly agenda that would create an atmosphere of creativity and competition,” former Mayor Curt Pringle later explained.
As a columnist for the Orange County Register, I championed the concept given how closely it aligned with our editorial board’s libertarian principles. It was unusual for a major California city to prioritize property rights and market innovations rather than subsidies and central planning through redevelopment agencies. It was even more unusual given that Anaheim – home, of course, to Disneyland – had long exerted a heavy hand in developing its Resort District.
This “freedom friendly” approach offered a wide range of lessons for all cities even though, despite its successes, the city’s politics shifted and later council majorities went back to its bad old, crony capitalist ways. While Pringle, the one-time Assembly speaker and lobbyist, is most closely associated with the idea, its architect was actually former Councilman (and then mayor) Tom Tait, the chief executive of a major Orange County engineering firm.
In fact, the concept for the Free Cities Center is highly influenced by the ideas in Freedom Friendly Anaheim. All city governments can help accomplish their stated goals – clean streets, walkable communities, safety, easy transportation, diversity, entrepreneurship, a vibrant streetscape – by prioritizing bottom-up thinking that empowers individuals rather than top-down planning measures driven by City Hall. I sat down with Tom to review Anaheim’s lessons.
Greenhut: Tom, I’d love to get an idea of how the concept got started. Can you provide some insight into the brainstorming that went into it and explain your initial thoughts and goals? Was there some incident that prompted it, or was this something you had long hoped to achieve?
Tait: I’ve always valued freedom – a value instilled by my father who is a true entrepreneur. I really don’t like when people try to control my life, and I don’t have a desire to control others. I think everyone has a dream in life, and some of those dreams have to go through City Hall in requesting a permit or gaining permission to use their land in pursuit of that dream.
Too often, governments can kill that dream in the cradle, often for reasons that don’t make sense. When a person’s dream is killed, the results are devastating for the individual, but also collectively. Think of the businesses, jobs, careers, passions and general economic growth that never happen because some arbitrary decision denies approval – or when some overly burdensome, outdated regulation smothers creative ventures.
Those were my initial thoughts. Here’s another one. In 1981, while in college I spent a month in China. The trip started out with three days in Hong Kong. It was the most vibrant city I had ever experienced. After three days, I boarded a train to Guangzhou (then Canton). I felt the repression the moment I boarded the train. When I arrived in Canton, I will never forget the look of despair on the faces of the crowds of people waiting for the train to arrive.
The repression of freedom then was extreme. Everyone was wearing the same blue or grey uniform, except the military was wearing green. And soldiers would walk around with their rifles slung on their shoulders with the bayonets attached. Compared to the vibrancy in Hong Kong, that short train ride took me to another world. This is generally the same culture, but one place was one of the most exciting, vibrant places that I’ve ever visited and the other was one of the most depressing and sad places. The big difference – one had freedom, the other didn’t. In that extreme, I saw the power that freedom has on a country and a city.
Greenhut: What are the key elements of the strategy? Can you explain why eschewing eminent domain, avoiding subsidies and protecting the rights of landowners is so important – and how respecting market forces is the foundation of a vibrant city? Let’s move from Hong Kong back to Anaheim.
Tait: Before Curt became mayor, when Tom Daly was mayor, and I was a councilman, we were redoing the city’s general plan. At that time, the stadium area was all zoned industrial. This is where three freeways come together in the heart of Orange County. It is home to Angel Stadium and the Honda Center. It seemed like it could be more – those industrial properties could be put to another use. If you looked at this area, or Orange County from an airplane, you would see the freeways coming together to what looks like a natural downtown, where people would want to live and gather.
But it didn’t happen because of the industrial zoning that was in place. I wanted to allow the change in use to happen, but I didn’t want the city to dictate it. So along with the planning director, Joel Fick, we came up with the idea of an overlay zone. This would allow the landowners to do what they want to do with their own property. If they wanted to change to residential or mixed use, then they could do so by right without seeking a zone change or general plan amendment. If they wanted to keep and expand their industrial business, they could do that too. It was very important to me that the option of keeping the industrial use was not limited, which typically would be the case when a city changes the zoning.
The overlay policy centered on increasing property rights as opposed to limiting or restricting rights. This resulted in a complete conversion and development of residential projects in the stadium and arena area, something we called the Platinum Triangle. This resulted in hundreds of millions of dollars of construction and the construction of thousands of new homes. It all happened without the city using eminent domain.
Speaking of eminent domain – by having freedom as a core value in the city, I subscribed to the principle that the city government should never take property from one person to give to another as in the U.S. Supreme Court’s 2005 Kelo decision, which allowed such a thing. I let my opinion be known, which kept the redevelopment agency in check. The city eventually put this principle into law. As you know, the state eventually dissolved these redevelopment agencies.
Regarding corporate subsidies, I don’t think they are positive in any way. Rather, they are destructive and corruptive of local government. In Anaheim, officials later focused on giving massive subsidies to specific well-connected developers of four-star luxury hotels. Keep in mind, Anaheim already had a massive amount of existing hotels that compete with each other on a nightly basis.
By choosing one hotel over another to provide a big subsidy, the city gives that hotel a huge competitive advantage. That subsidy not only costs the taxpayers by diverting money from vital city services, it costs all the other hotels in the city that didn’t get a subsidy and have to cut their margins to compete with the subsidized hotels. Why would any city want to promote such unfair competition? When the playing field is not level, new players will be reluctant to invest in that market. That means less capital, less growth, fewer jobs, etc. It undermines a general sense of fairness that is fundamental to creating a good business climate.
Greenhut: One element really stuck in my mind – the way the city tried to reform the permitting system in a way that was respectful to business owners. I also remember you telling me that it was crucial that the little taco stand would receive the same excellent service afforded to Disneyland. How did you effect the needed cultural change within the bureaucracy?
Tait: Small business is the backbone of our country and our city. The majority of new jobs – something like 70 percent – will come from small business. Unneeded city regulations hurt small businesses and the entrepreneur much more than they hurt big businesses. Big business has the resources – the armies of attorneys, human-resources departments and accountants – to comply with regulations. The small businessperson does not.
Anaheim has a very large immigrant population. That gives it a high potential for entrepreneurial small business growth. Rather than offering subsidies to a few big players, the city should make sure it doesn’t stand in the way of small business startups. Right after I was elected, I formed a regulatory relief task force to go through our codes to remove unneeded regulations that would stifle startups and small businesses. We also created a concierge-type service at the planning desk to help small business applicants make their way through the planning and building-code process. As a pilot project, we started the Brew City initiative, which streamlined the approval process to open a craft brewery. Essentially, we no longer required a conditional use permit to open a brewery.
Most breweries are started by people who are passionate about beer but have little experience in developing property. They usually don’t have the funds to finance a one-to-two year wait for a planning commission or city council to grant a discretionary permit that would be required for a CUP, or the ability to take a risk of a denial, especially after signing a long-term lease on a building. As such, there were very few breweries in the LA metro area, particularly surprising in light of the huge population that would support the industry.
So, we cut the regulations and Anaheim soon saw almost 20 breweries open for business. I wanted to use breweries to help change the culture at City Hall to one of celebrating a small business opening as opposed to the typical city bureaucracy that makes it easier to say no. Our staff was fantastic in getting these breweries approved and staffers were excited with each opening. This attitude was contagious and spilled over and applied to other businesses. The culture shifted to a freedom-centered one of saying “yes” as opposed to a restrictive culture of saying “no.” By the way, most city staffers are great – but they operate within that “no” culture.
Greenhut: What happened there after the reforms? What is the situation there now? I know that some of the enthusiasm evaporated after the 2008 market crash.
Tait: You’re right. Everything stalled during the recession, but, now all is going well. The Platinum Triangle has been transformed from an industrial area to a vibrant mixed-use community. We set the stage for these changes, even though it took a while for market conditions to improve.
Greenhut: Unfortunately, the City Council jettisoned this freedom approach and seamlessly transitioned back to a system where big developers have undue influence and receive subsidies. The current stadium sale epitomizes the latter approach. What went wrong politically? Did you fail, perhaps, to convince voters of the value of a freedom approach?
Tait: The stadium sale would have been to a partnership owned by the current owner of the Angels, not even to the Angels team itself. So the land and stadium could be owned by an entity uncoupled from the team. The argument was that the Angels should control the stadium and land around it. This terrible transaction did not accomplish those goals. I can go on about how bad of deal this is, but, in a nutshell, the city’s largest real estate asset (would have been) sold for a small fraction of its market value, during COVID, on a phone-in council meeting, a few days before Christmas. Practically, there was little opportunity for the public to give significant input. The proceeds from a market sale would have solved many of Anaheim’s financial obligations and paid for vital city services for the foreseeable future. Very sad.
What went wrong? In my opinion, special interests in Anaheim have united to raise money and get their candidates elected. The local Chamber of Commerce, Disney, police and fire unions, the Orange County Business Council, and Angels Baseball all support the same candidates that vote to subsidize big businesses. And their contributions dwarf any contributions to the other side that values fiscal responsibility and a level playing field for all businesses. There is no way to get any message to the voters. Everything gets drowned out. I believe the vast majority of Anaheim residents are opposed to the subsidies. I ran against them and won by 35 percent, but I had the advantage of incumbency and the bully pulpit to fight the subsidies. Without that, it’s nearly impossible to overcome the massive differential in campaign spending. In sum, the message is strong, but it gets drowned out by all that money.
Editor’s note: Since this interview, the stadium deal was scuttled amid a corruption scandal that saw Mayor Harry Sidhu, an advocate for the subsidy-laden development approach, resign after an FBI affidavit accused him of sharing inside information with the Angels as he sought a large campaign contribution. Sidhu denies any wrongdoing and the government has not charged him with any crime, but the unfolding scandal highlights the dangers of this kind of crony capitalistic deal making. Anaheim’s residents have crowded City Council meetings demanding change, which could provide a silver lining to this embarrassing chapter in the city’s history.
Greenhut: Let’s discuss a sad subject – downtown Anaheim. To me, that’s the best example of why central planning actually ruins cities given that the redevelopment actually demolished one of the county’s largest downtown areas. How could that have happened?
Tait: Yes, so sad. Anaheim had the oldest and largest downtown in Orange County. There was a lot of history in those buildings. Years ago, before my time on the council, the redevelopment agency had a vision to create a modern downtown area. To do this, the agency bought up – or took by eminent domain – the buildings that made up Anaheim’s downtown. At the time, the city considered the area to be blighted. It was almost all demolished and a few modern mid-rise office buildings and a strip shopping center went up in its place with redevelopment subsidies. The office buildings were long-time failures and the sense of place that was once downtown Anaheim evaporated. Other neighboring cities such as Fullerton, Orange and Santa Ana kept their hands off their old downtowns and refrained from destroying them. Today, those cities enjoy vibrant city centers full of civic activity and energy.
The soul was taken out of Anaheim by its overactive redevelopment agency. Now, through a lot of effort and the refurbishment of the few remaining old buildings, there is progress in creating a sense of place. But it has taken decades for this to happen. I wish that years ago the city redevelopment agency simply did nothing. Then the energy of the free market would have transformed the “blight” into a historical civic treasure.
Greenhut: Although city councils are technically nonpartisan, we all know that the parties have much influence on these races. You’re a Republican, albeit of a libertarian variety. But when you were mayor you often sided with Democrats, even rather progressive ones. At the local level, these freedom-oriented policies often appeal to an unusual coalition. Why is that? What lessons does such coalition building offer for urban reform?
Tait: The mayor and council in Anaheim are officially nonpartisan. I like it that way. In Anaheim, the biggest issues we dealt with was whether to give massive subsidies to big hotel developers and even the Disney Co. Democrats and Republicans were in favor of such things. And Democrats and Republicans joined me in opposing them. My colleague on the City Council, Jose Moreno, was my strongest ally. He is a progressive Democrat. He, like me, thinks city money should be spent serving the taxpayers, rather than special interests. On some other issues, we might agree to disagree – but there’s certainly an opportunity to create unusual political coalitions to advance these goals.
Greenhut: Supporters of the central planning model argue that the government needed to be actively involved in revamping the infrastructure in the Resort District and in incentivizing hotels to bring in tax revenue and assure the continued success of that tourist area. What’s your response and how would a more freedom-oriented approach be best there?
Tait: I believe cities should do what the private sector cannot. We should do the traditional things. We should make sure people are safe. We should make sure their rights and civil liberties are protected. We should make sure our civic space is clean and well maintained and works well to support all of our residents and businesses. I believe we should invest in our neighborhood infrastructure. Businesses want to locate in cities with good neighborhoods. In other words, good, safe neighborhoods attract businesses and investment.
The Resort District does require additional attention because of the massive amount of visitors every day. But rather than giving a few businesses massive subsidies, the city should make business life better for all hotels and businesses in the Resort District by eliminating unnecessary regulations, and making sure the public infrastructure in that area is excellent.
Greenhut: Although Freedom Friendly Anaheim didn’t have staying power, what are your main takeaways from the experiment? What’s the best way to advance that agenda today – not just in Anaheim but in other Western Cities.
Tait: That’s a tough one. It starts with the elected leadership. If freedom is not a core value to the elected, then it won’t be to the people who work at the city. Sadly, the special-interest groups are typically those that spend the most in local elections. The voter needs to be savvy as to who is funding the campaigns. More transparency in campaign finance would help. Also, I wonder if some anti-crony laws that would, say, forbid voting on issues that directly affect major independent expenditure donors, might limit the undue influence of interest groups. In the long run, the public needs to pay attention to their local elections and value freedom-centered policies verses policies that reward a few at the expense of all others.
Greenhut: Thank you, Tom.