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San Diego Will Pay The Price To Keep Its Redevelopment Program

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Aired 7/11/11

San Diego city leaders say they will continue their redevelopment programs, even though a new law requires 40 percent of the city's redevelopment funds be paid to the state.

— San Diego city leaders are hoping a lawsuit will prevent state government from taking their redevelopment funds. But for now, they'll follow the law.

San Diego City Councilman Kevin Faulkner spoke at a news conference in support of a plan to keep funding redevelopment, even though it now requires a high price be paid to the state. July 11, 2011.
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Above: San Diego City Councilman Kevin Faulkner spoke at a news conference in support of a plan to keep funding redevelopment, even though it now requires a high price be paid to the state. July 11, 2011.

Redevelopment districts allow California cities to capture some property tax to invest in infrastructure and economic development. But a law passed this year is forcing San Diego to either give 40 percent of its redevelopment funds to the state or cancel its program.

In the case of San Diego, that means it must pay $70 million in redevelopment funds to the state this year. It will have to pay $16 million in subsequent years. Mayor Jerry Sanders called the state law a raid of local funds. But he said San Diego should pay the price to keep redevelopment going.

“I believe continuing redevelopment in some fashion is better than pulling the plug altogether,” said Sanders.

The mayor is asking the San Diego City Council to continue funding redevelopment, and the council will vote on the matter next week. Two members of the City Council, one Democrat and one Republican, attended Sanders’ press conference to show their support.

Democrat Todd Gloria, who represents the 3rd District, said two neighborhoods in his district will, together, lose nearly $7 million due to the new law. But he agreed that redevelopment remains worth the high cost the state is demanding.

“We believe that this is absolutely unconstitutional and we'll fight that in the courts. But in the meantime, we want to make sure that some level of activity can continue in neighborhoods like City Heights and Barrio Logan,” said Gloria.

Sanders and members of the city council have put their hopes in a statewide lawsuit. The California League of Cities plans to sue the state, claiming that redirecting local redevelopment dollars violates voter-approved Proposition 22.

A spokesman for Governor Brown said the law stands on firm legal ground, and it was passed in order to make sure that government services such as education get the money they need.

"Rather than subsidizing private development, we’re considering what core services need to be funded," said spokesman Evan Westrup.

The suit by the League of Cities is expected to be filed within the coming week.

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