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Calif. High Court Rules State Can Abolish Redevelopment Agencies

A view of the San Diego skyline from across the bay.

Photo by SD Dirk / Flickr

Above: A view of the San Diego skyline from across the bay.


Todd Gloria, San Diego City Councilmember, District 3

Elizabeth Hull, partner, Best, Best and Kreiger, chair Redevelopment & Housing practice group.


Coming up on Evening Edition we'll discuss the impact of the redevelopment ruling with Todd Gloria, San Diego City Councilman and chair of the city's ad hoc committee on redevelopment, and Ron Morrisson, mayor of National City.

Evening Edition airs weekdays at 5 PM and 6:30 PM on KPBS TV.

The California Supreme Court today upheld a new law that will abolish community redevelopment agencies, dealing a blow to San Diego city officials who tried to keep their agency open.


Redevelopment Ruling

Redevelopment Ruling

California State Supreme Court Ruling

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The state's high court also struck down a companion statute that allowed local governments to keep the agencies alive by making payments to the state.

Redevelopment proponents argued that voter-passed Proposition 22, which bars the state from seizing local tax money, invalidated both laws. Redevelopment agencies are funded by the increase in tax revenue created by projects in their areas.

San Diego Councilman Todd Gloria called the ruling "the worst possible outcome."

The move effectively kills the more than 400 redevelopment agencies in the state and Gloria said this could devastate numerous projects in the city. He said unless Sacramento fixes its budget problems, cities will continue to suffer.

"It’s redevelopment this year; it will be something else next year," Gloria said. "And what we need to assure San Diegans is that we will not allow Sacramento to continue to come down here and take away funding from worthy projects like our homeless shelter, like infrastructure repairs, like the creation of affordable housing."

Critics of redevelopment says the agencies have gotten out of control. Gloria says redevelopment may have needed to be reformed, but not completely eliminated.

Supporters of the laws passed by the Legislature earlier this year, including Gov. Jerry Brown, say the money is better used to fund schools and other municipal functions during tight budgetary times. They cite a state analysts report that shows the cost of redevelopment growing without any tangible economic benefit to the state.

Since the court ruling aborted the plan to allow local governments to buy back into redevelopment, the agencies will be phased out when their currently contracted projects are completed.

The agencies not only fund major building projects, like proposed new football stadiums in downtown San Diego and Los Angeles, but spend 20 percent of their income on affordable housing.

San Diego Housing Federation Executive Director Susan Tinsky called for a new affordable housing funding source.

"In the current economic environment, more people are doubling up, living on someone else's couch, or worse yet, sleeping in their cars or on the street each day,'' Tinsky said. "We call on public officials and policymakers at all levels to join in developing and executing a plan to deal with the state's housing crisis now.''

On Wednesday, Councilman Carl DeMaio said he would work with other officials across the state to pass a ballot measure to "absolutely guarantee that redevelopment dollars remain local.''

The city of San Diego and many other local jurisdictions chose to pay the state to keep their agencies open. San Diego was due to pay $70 million.

San Diego officials point to downtown as an example of the success of redevelopment.

Statements From San Diego Officials:

San Diego Mayor Jerry Sanders: “This is a sad day for San Diego. Plain and simple, this money grab by the governor will have severe negative impacts on our neighborhoods and our economy for decades to come. Redevelopment has been an incredibly effective tool for eliminating blight, increasing the affordable housing supply and creating jobs. We’re not going to stand by idly and let the progress our communities are making simply die off; we’ll begin working immediately with our state legislators to pass new laws giving us tools enabling reinvestment in our lower-income communities.”

Coronado Mayor Casey Tanaka:"Today's decision will have many adverse impacts for the citizens of Coronado. In 2008, our voters overwhelmingly voted to support its own local hospital, and consequently, our redevelopment agency put together a plan to help pay for its retrofitting and to help maintain our local hospital to the tune of fifteen million dollars over fifteen years. Today's decision will imperil the last 12 years of this arrangement. It will also harm the ability of our redevelopment agency to continue to provide affordable housing. 20% of all redevelopment monies were required to be spent on affordable housing per state law. In the last 4 years, the city's redevelopment agency put approximately 50 new apartment units ranging from one bedroom to three bedroom units into service for senior citizens of low to moderate income. This would not have occurred without redevelopment. Future units in Coronado will not be produced without the funding and mandate that the state had set with redevelopment law in California. One of the next projects that we were slated to consider is a new senior center. With redevelopment taken away, cities and communities across the state are going to have to cancel or reconsider projects of great import to their communities. The honest truth is that Sacramento is incapable of addressing these needs and redevelopment agencies were an ingenious way for local government to address local problems in thoughtful and direct ways. Now, this tool is gone and it is a certainty that our leaders in Sacramento, who are already in over their heads, will neglect these local issues while scrambling to just keep the ship of state from sinking."

Betty T. Yee, First District Member of the Board of Equalization: “Unfortunately, this decision could eliminate a powerful tool for creatinglocaljobs. Redevelopment has been successful at stimulating economic growth, revitalizing neighborhoods, and generating tax revenues. Despite isolated abuses, redevelopment, the largest economic development program in California, has proven more effective in creating local jobs andencouraging businesses to invest in local communities than tax breaks or other tools.”

City Council President Pro Tem Kevin L. Faulconer: “Redevelopment has been a vital resource in the transformation of downtown and many of San Diego’s older communities. It has been the key to incentivizing private investment and creating affordable housing, parks and necessary public improvements in San Diego’s urban neighborhoods, all the while helping to create jobs and stimulate San Diego’s economy. The short-sighted decision by the State Legislature to take local funds from our neighborhoods and pump them into the bureaucratic black hole in Sacramento is a detriment to our region. While I am disappointed in the Supreme Court’s ruling, I will work hard to ensure community redevelopment projects currently in the pipeline continue. The public benefits that redevelopment brought to our urban neighborhoods are too important to stop. I will be looking for new tools that ensure San Diego’s tax dollars support local economic growth.”

Assemblymember Toni Atkins: "I am disappointed in the overall California Supreme Court ruling today on redevelopment. While I applaud the Court's recognition that the State has the right to determine the future of the redevelopment program that the State initiated, I am very disappointed that the voluntary op-in program was struck down. The legislative intent was to continue successful economic and affordable housing development in communities throughout California, while scaling back some activities enough to help fund education and local government. I pledge to work with Assembly Speaker Perez and my legislative colleagues to find a way to continue the best part of redevelopment activities."

Downtown San Diego Partnership President and CEO Kris Michell: "I'm disappointed, but ready for a fight. The ruling of a court doesn't stop state lawmakers, including our own delegates, from defending tax-base creating resources rather than so egregiously hamstringing struggling local economies which support this state."

District Attorney and Mayoral candidate Bonnie Dumanis:“San Diego is America’s Finest City today in no small part due to the success of our local redevelopment efforts. Sacramento politicians should have left well enough alone, and not interfered with a program that has successfully put local tax revenue to work locally, created jobs, and transformed our city for the better. When the legislature abolished redevelopment agencies earlier this year it did not discriminate between those programs that have worked well – like San Diego’s -- and those that haven’t. Instead, the legislature’s actions have led to today’s Supreme Court decision that leaves us with the worst possible outcome for San Diego. Today’s decision is a major setback to our job creation efforts locally and I call upon the legislature to get back to work in restoring redevelopment as a critical tool to building and rebuilding our cities.”

City News Service contributed to this story.


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