While the pace of California’s legislature makes the movement of glaciers look speedy, the final passage of the state’s budget is projected for as early as tomorrow, June 15. If it were to pass as now composed, the budget would eliminate the state’s Community Redevelopment Agencies altogether. Governor Jerry Brown says their termination would save about $1.7 billion needed to close the state’s budget gap and give needed funds directly to cities instead of to often corrupt and inefficient agencies.
So in addition to fast tracking projects and protecting funds, redevelopment agencies (and sympathetic officials) are making a last minute push to provide alternatives to their demise, making a final case for their existence and proposing significant reforms. This includes three bills that would significantly alter the agencies and make them more accountable.
“We want to provide an option to any legislator who says ‘I don’t want to eliminate CRAs but I want to vote for something,’” said John Shirey, Executive Director of the California Redevelopment Association. Shirey said the governor’s estimate that cutting redevelopment would save the state $1.7 billion is “not based on the real world.”
Under the Redevelopment Association’s plan, local redevelopment agencies can voluntarily contribute up to 10 percent of their tax increment revenue streams to local school districts over the next ten years. This plan, according to the association, could raise $900 million this year and more than $2.7 billion over ten years, much more than the $1.7 billion the Governor estimates will be gained by eliminating redevelopment altogether.
SB450, proposed in the state senate, would impose limits on what kind of redevelopment would be allowed in the state. For instance, it would prevent cities from placing more than 25 percent of their territory into a redevelopment zone. Shirey pointed out it would also force agencies to show that they are using land for redevelopment and not just holding on to it. Shirey called this initiative a “performance review” for agencies. The measure would also force agencies to provide more funding for low-income development, a measure sure to “attract attention among legislators,” he said.
SB286 would impose restrictions on how redevelopment agencies identify communities that need improvement, and what kind of improvements are allowed. It would also require agencies to spend money on state priorities like brownfields and job creation; require an auditor to review all agencies’ statements of indebtedness; and would develop metrics for measuring agencies’ output and activities. It would also put restrictions on the use of funds for racetracks, golf courses, and possible developments seen as abuse of redevelopment funds. AB1250, just entered in the state assembly, proposes many similar reform measures.
“I don’t know of any human endeavor where there isn’t an opportunity for things to go wrong. You can go down any state program and find some reason to be concerned about its activities,” said Shirey “If there are problems, why is that a reason to end it? That’s a reason to mend it.”
“This is the state’s only economic development program,” added Shirey, who noted that redevelopment adds thousands of jobs and thousands of dollars in tax revenue for the state every year.
While the American Institute of Architects California Council has not taken a stance on the bills, it has sided sharply in favor of redevelopment, but it has also called for redevelopment reform. “Redevelopment provides a tool to do projects in existing urban neighborhoods that otherwise would be much more difficult to do,” said Mark Christian, AIACC’s Director of Legislative Affairs. “Of course abuse and poor decisions have happened. Let’s stop using money for golf courses. Let’s have a real definition of blight.”
Bur reform proposals have done nothing to sway Governor Brown on the issue of redevelopment.
“Given our challenging economic circumstances and our massive deficit the governor believes now is not the time to be subsidizing private developers while our public services are being bulldozed,” said Evan Westrup, the governor’s spokesperson.
Answering concerns that the removal of redevelopment agencies would leave struggling neighborhoods in the lurch, Westrup said: “I think redevelopment agencies have strayed far beyond their intended mission to address blighted areas.”
Westrup noted that cities throughout the state have put away more than $1 billion in redevelopment funds via bond sales and other means, making another case against their existence.
“Pushing projects out the door in a matter of days and sheltering assets raises many questions about how those agencies are operating,” he said.
Others continue to come down hard against redevelopment, saying it’s too late for the reform of a fundamentally broken system.
“California is wasting millions of dollars on redevelopment projects, with only minimal benefits to show for it,” wrote Dana Berliner, a member of the conservative think tank the Cato Institute. Berliner’s story was posted on an anti-redevelopment site called Stop the Money Pit.
Shirey added that outside of its economic impact, redevelopment helps reduce sprawl by directing investment in infill, brownfields, and transit oriented development. “We develop better land use so we don’t keep pushing redevelopment into outer areas and increasing miles traveled and greenhouse gases and worsening the environment,” he said.
Shirey called the removal of redevelopment agencies illegal under the state constitution, and said that if it moves forward agencies planned to file lawsuits challenging the “hokie legislation.”
“We’re confident that this proposal is legally sound,” answered Westrup. “Filing lawsuits and pursuing legal distractions won’t get us any closer to solving our massive budget deficit.”
There is “nothing in the governor’s plan that would preclude locals from pursuing redevelopment if they choose to,” Westrup added “Ultimately they can decide how to spend that money.”