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Redevelopment Agency-Killing Court Ruling: Fallout Roundup

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Last week, the California Supreme Court ruled, more or less, to put an ax in the head of the state's local redevelopment agencies. The court found that the state's dissolution of the agencies was a-ok, and that a compromise in which RDAs could pay a fee to the state to continue operations was not. Local redevelopment agencies (like the Community Redevelopment Agency of Los Angeles) work with private developers to redevelop blighted areas using property taxes--the CRA/LA has been involved with the recent renaissance in Hollywood, the development of Bunker Hill, and the creation of the NoHo Arts District. According to the LA Times, "More than 400 redevelopment agencies will cease to exist after Feb. 1." So what does it all mean? It's hard to really say yet, but here's some of what we know about how all of this might go down:

Pros and Cons: The San Francisco Chronicle details the two sides of the debate (supporters argue that redevelopment spurs economic development in blighted areas, while opponents claim that redevelopment is a source of waste and abuse and the money is better spent in education and law enforcement). Meanwhile, several large projects in SF are in jeopardy: "The ruling will force redevelopment agencies to put the brakes on proposed projects, such as San Francisco's Mid-Market revitalization, and could cast uncertainty on approved projects, including the city's redevelopment of the Hunters Point Shipyard and Mission Bay area."

The Cut-Off Date: The Daily News reports that the bill governing the "pay to play" compromise "dictated that any CRA-owned property that didn't have development deals in place by the [June 29, 2011] deadline be listed for sale, with the resulting revenues sent to the county Assessors Office." That includes the redevelopment of the Reseda Theater, which is now dead.

Fighting Back and Affordable Housing: The LA Times reports that redevelopment supporters are working on a compromise that could allow cities to maintain redevelopment functions. Supporters include LA Assemblyman (and Speaker) John A. Pérez: "Democratic legislative leaders said Friday that they want to continue some of the programs funded by redevelopment, such as construction of low-income housing and 'smart economic development.'" However, even Jim Kennedy, the interim executive director of the California Redevelopment Association is ready to adjust to a slimmed down version of redevelopment: "What we know going in is redevelopment ... probably needs to change." Most concerning to Oakland Mayor Jean Quan is the key role redevelopment funds play in funding affordable housing: "You can't have a state with no mechanism for building affordable housing...Redevelopment is the main way we fund affordable housing in this state."

Existing Obligations: The OC Register has a list of the area projects potentially affected by the ruling, the largest of which is the build-out of the OC Great Park. However, Irvine is contractually obligated to build the park, "and existing obligations are supposed to be fulfilled under the new law."

Bringing Businesses: Covina City Manager Daryl Parrish tells the San Gabriel Valley Tribune: "Redevelopment is really the only local tool that cities had to entice businesses in California...Without that we really don't have a tool." According to the SGVT, "now at risk are the sale of the closed Fred C. Nelles Youth Correctional Facility in Whittier, the completion of an eight-unit affordable housing complex in Alhambra, the sale of a 14-acre parcel of land to the Gold Line Construction Authority in Monrovia and other projects that will face long delays before coming to fruition."

The Process: Finally, a California Planning & Development Report article written by former Ventura Mayor Bill Fulton details the actions triggered by the ruling, including the creation of Oversight Boards to oversee the dissolutions of the RDAs: "The city prepares a debt and obligation schedule, which is reviewed by an auditor selected by the auditor-controller, as well as an administrative budget. The Oversight Board approves both. The Oversight Board is also charged with disposing of RDA assets. Government buildings get turned over to the appropriate government agency. The proceeds of other asset sales are divided among the taxing agencies proportionally. And they decide whether RDA affordable housing money will go back to the cities or go to the housing authorities instead." But here's the rub: every decision made by oversight committees can be overturned by the state's Department of Finance.
Downtown aerial via Photography School
· CA Supreme Court Votes to Kill Local Redevelopment Agencies [Curbed LA]