Big Projects in Peril with Redevelopment’s Gutting

Big Projects in Peril with Redevelopment’s Gutting

Photo by Sam Hodgson

The state Legislature passed a bill on Wednesday that guts redevelopment agencies in California. The move will have implications for the future of downtown San Diego.

 

The state Legislature on Wednesday gutted redevelopment, the system responsible for three decades of San Diego’s big building aspirations and neighborhood revitalization attempts.

The decision throws just about every one of San Diego’s current and future plans into doubt.

It menaces the viability of major legacy projects, such as a new downtown Chargers stadium or expanded Convention Center, by pulling a large chunk of their funding. It messes with the city budget, passed last week in part by relying on redevelopment money to close a deficit. And it threatens the city’s plans to direct $4 billion future property tax dollars to projects over the next 35 years.

But schools could receive about $40 million that otherwise would have stayed in downtown redevelopment coffers. At some point, it could provide the city’s starving day-to-day operating budget with a property tax boost. The source of some of San Diego’s most significant recent scandals could disappear.

For now, no one seems to understand exactly what the Legislature did or how the city will fare. The lawyers are expected eventually to sort all that out.

“Once we start seeing the details,” said City Attorney Jan Goldsmith, “we’ll find out if it’s really dead or not.”

It’s an amazing state of affairs given the hundreds of billions in future property tax dollars affected by Wednesday’s decision. Beyond the simple vote, little else is clear.

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Governor Jerry Brown, who kicked off the titanic debate over redevelopment’s future six months ago, still needs to sign the legislation. Lawmakers passed the state budget Wednesday and are counting on the $1.7 billion in property taxes statewide that otherwise would have gone to redevelopment agencies to balance their books.

The Legislature also passed a companion bill that would allow cities to re-create their redevelopment agencies provided they pay a considerable amount of their property tax dollars to local schools. Lawmakers expect at least $400 million from redevelopment agencies in future years.

This new version of redevelopment isn’t redevelopment at all to the system’s supporters.

“The Senate and the Assembly just voted to kill redevelopment plain and simple,” said John Shirey, head of the California Redevelopment Association.

Redevelopment funnels billions of property taxes away from schools and other local governments to improve rundown neighborhoods.

It’s a little understood process, but vital to how city leaders have long decided to pay for their bricks and mortar projects. The process is even less understood when the Legislature reveals and passes a bill with gargantuan effects in a day, as it did Wednesday. Goldsmith said Brown’s original convoluted legislation was clearer than what eventually passed.

Redevelopment’s high stakes provoked chaos during the unusually quick state budget hearings.

Capitol reporters described the army of lobbyists amassing to watch the redevelopment debate. A fight broke out on the Assembly floor over a legislator’s Mafia reference during discussion. San Diego Mayor Jerry Sanders issued one of his most incendiary statements in recent memory after the bills passed, calling the decision an “extortion attempt.” Alternative measures he and other big city mayors proposed could have reformed redevelopment, he said.

“Instead, the Legislature put a gun to our head, threatening to kill redevelopment agencies if they don’t hand over local tax dollars to the state instead of using them for streets, parks, housing and other local needs,” Sanders said.

These dollars also are central to the two big projects Sanders wants to complete by the time he leaves office at the end of next year.

A Chargers official has said the downtown stadium was “dead” if redevelopment went away. Last month, Sanders unveiled a Convention Center expansion financing plan that still needs a big cash infusion from somewhere. Downtown redevelopment dollars have long been rumored as a source. At the least, Wednesday’s decision could tie up redevelopment funds for a while.

Assuming the governor signs the legislation, the fight will turn to the courts.

Redevelopment backers have argued for months that killing the system violates a voter-approved initiative designed to keep the state from taking redevelopment dollars. The state likely will go after the attempts by San Diego and other local governments to commit billions to redevelopment projects so the state couldn’t take the money away. The city tried to obligate $4 billion for future redevelopment projects and transferred its redevelopment agency assets to the city. No one knows what will happen to the money during the lawsuits, but Shirey said he expected the state would try to take control.

“The next phase here is litigation,” Shirey said, adding that redevelopment agency employees should watch the lawsuits closely.

“Your future is going to hinge on that.”

Please contact Liam Dillon directly at liam.dillon@voiceofsandiego.org or 619.550.5663 and follow him on Twitter: twitter.com/dillonliam.

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Liam Dillon

Liam Dillon

Liam Dillon is senior reporter and assistant editor for Voice of San Diego. He leads VOSD’s investigations and writes about how regular people interact with local government. What should he write about next? Please contact him directly at liam.dillon@voiceofsandiego.org or 619.550.5663.

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47 comments
bob gomez
bob gomez subscriber

lifesaver1 - the GASLAMP redevelopment was the biggest swindle ever perpetrated on San Diego. Maureen O'Conners friends bought up all the land prior to the redevelopment. After it was done their previously cheap purchases were worth billions courtesy of dumb tax payers like you who financed their scheme. The marginal income people who lived there were kicked out, victims of the rich and powerful. Artists could no longer afford the cheap old industrial space. The quaint port city that Tom Waits sung about is now a sterile Yuppie neighborhood full of overpriced shops and stoned 20 something partiers. What's so good about that?

cordedpoodle
cordedpoodle

lifesaver1 - the GASLAMP redevelopment was the biggest swindle ever perpetrated on San Diego. Maureen O'Conners friends bought up all the land prior to the redevelopment. After it was done their previously cheap purchases were worth billions courtesy of dumb tax payers like you who financed their scheme. The marginal income people who lived there were kicked out, victims of the rich and powerful. Artists could no longer afford the cheap old industrial space. The quaint port city that Tom Waits sung about is now a sterile Yuppie neighborhood full of overpriced shops and stoned 20 something partiers. What's so good about that?

Bob Jones
Bob Jones subscriber

Just WHO is actually being "represented" at City Hall? It sure as heck isn' the average San Diegan!

rwj5125
rwj5125

Just WHO is actually being "represented" at City Hall? It sure as heck isn' the average San Diegan!

cynthia Gladstone
cynthia Gladstone subscriber

There are so few charger games played a year - what is it - 4 or 5 a year? Why spend all that money on a stadium when we already have one? And Where did all the tax money go when the housing prices were going up? I'll tell you where - I think retirement pensions need to redistributed. Cut them back 20% - most people getting those pensions know they don't deserve them & get a laugh out of how easy their future will be. It is no joke - this country is in a major crisis.

cynjy29
cynjy29

There are so few charger games played a year - what is it - 4 or 5 a year? Why spend all that money on a stadium when we already have one? And Where did all the tax money go when the housing prices were going up? I'll tell you where - I think retirement pensions need to redistributed. Cut them back 20% - most people getting those pensions know they don't deserve them & get a laugh out of how easy their future will be. It is no joke - this country is in a major crisis.

christine mann
christine mann subscriber

here is the CityBeat article exposing the lucrative redevelopment contract that makes no sense whatsoever. The above blog in the Reader shows the absurdity of the language of the contract. The contract essentially pays them to do nothing as in to do what the Housing Commission and these other non-profits are already doing.

cma52572
cma52572

here is the CityBeat article exposing the lucrative redevelopment contract that makes no sense whatsoever. The above blog in the Reader shows the absurdity of the language of the contract. The contract essentially pays them to do nothing as in to do what the Housing Commission and these other non-profits are already doing.

christine mann
christine mann subscriber

LeSar Development Consultants pertnered w/ the United Way on the technical consulting. The problem is you cant tell where LDCs contract ends and the United Way begins. It seems alot like getting private donations to pay for the work that LeSar development Consultants was paid big big money to do and they plan on expanding this shell game all across the City...Uptown is next.

cma52572
cma52572

LeSar Development Consultants pertnered w/ the United Way on the technical consulting. The problem is you cant tell where LDCs contract ends and the United Way begins. It seems alot like getting private donations to pay for the work that LeSar development Consultants was paid big big money to do and they plan on expanding this shell game all across the City...Uptown is next.

christine mann
christine mann subscriber

why was Toni Atkins wife just given $464,750 in redevelopment funds to do a study on homelessness? a job the Housing Commission is already paid to do. She billed her time to taxpayers at $225 per hour.

cma52572
cma52572

why was Toni Atkins wife just given $464,750 in redevelopment funds to do a study on homelessness? a job the Housing Commission is already paid to do. She billed her time to taxpayers at $225 per hour.

Ian Trowbridge
Ian Trowbridge subscribermember

I agree that the 28 million unneeded cruise ship terminal was a terrible business mistake and violated the port master plan, it is separate from redevelopment. The port screwed the public by taking public land designated as a park/plaza but they did not use tax increment (redevelopment) funds to do it. Instead, they accepted a loan from Carnival Cruises that they can't repay and hangs around their neck like the proverbial albatross.

iantrowbridge
iantrowbridge

I agree that the 28 million unneeded cruise ship terminal was a terrible business mistake and violated the port master plan, it is separate from redevelopment. The port screwed the public by taking public land designated as a park/plaza but they did not use tax increment (redevelopment) funds to do it. Instead, they accepted a loan from Carnival Cruises that they can't repay and hangs around their neck like the proverbial albatross.

Vlad Kogan
Vlad Kogan subscriber

Ian, yes, that's what I meant. Thanks for clarifying. Also thanks for the book plug!

vkogan
vkogan

Ian, yes, that's what I meant. Thanks for clarifying. Also thanks for the book plug!

Dianne Parham
Dianne Parham subscriber

I'm not celebrating yet...Redevelopment is beholden to millionaires and I am sure Fletcher is doing what he can to make sure it doesn't go away since those are his folks. It would be nice to see this travesty end but I am cynical at this point.

dialyn
dialyn

I'm not celebrating yet...Redevelopment is beholden to millionaires and I am sure Fletcher is doing what he can to make sure it doesn't go away since those are his folks. It would be nice to see this travesty end but I am cynical at this point.

timothy villalobos
timothy villalobos subscriber

Spend big during and economic collapse. What a waste. I bet they gave themselves bonuses for its completion in schedule too. I give you a raise and you give me a raise. That's how it works in the redevelopment business in San Diego.

tim19620
tim19620

Spend big during and economic collapse. What a waste. I bet they gave themselves bonuses for its completion in schedule too. I give you a raise and you give me a raise. That's how it works in the redevelopment business in San Diego.

Ian Trowbridge
Ian Trowbridge subscribermember

By the way, readers may be interested to know that your book "Paradise Plundered: Fiscal Crisis and Governance Failures in San Diego" co-authored with Steve Erie and Scott McKenzie out in September can be pre-ordered on Amazon. com

iantrowbridge
iantrowbridge

By the way, readers may be interested to know that your book "Paradise Plundered: Fiscal Crisis and Governance Failures in San Diego" co-authored with Steve Erie and Scott McKenzie out in September can be pre-ordered on Amazon. com

Omar Passons
Omar Passons subscribermember

t not all Redevelopment is a thinly disguised money grab and it is an unfair over-generalization to characterize it in that way.

omarpassons
omarpassons

t not all Redevelopment is a thinly disguised money grab and it is an unfair over-generalization to characterize it in that way.

Bob Jones
Bob Jones subscriber

And what of those politicians who pushed so hard fof the NEW STADIUM? Well, folks, they will no longer be in San Diego to see the negative financial fall-out from their votes. Nope, they will have moved on to greener pastures in big time politics in Sacramento or Washington via the high roller network provided by - - Guess who ?

rwj5125
rwj5125

And what of those politicians who pushed so hard fof the NEW STADIUM? Well, folks, they will no longer be in San Diego to see the negative financial fall-out from their votes. Nope, they will have moved on to greener pastures in big time politics in Sacramento or Washington via the high roller network provided by - - Guess who ?

Lucas OConnor
Lucas OConnor subscriber

Wasn't the point of the giant scramble to approve redev projects specifically to ensure that they weren't killed by such a move?

lucasoconnor
lucasoconnor

Wasn't the point of the giant scramble to approve redev projects specifically to ensure that they weren't killed by such a move?

Vlad Kogan
Vlad Kogan subscriber

Andy, my bet would be that one of the largest cost is property acquisition for big projects. How many new parks were built in the CCDC project areas between say 1980 and 2005?

vkogan
vkogan

Andy, my bet would be that one of the largest cost is property acquisition for big projects. How many new parks were built in the CCDC project areas between say 1980 and 2005?

Janet Shelton
Janet Shelton subscriber

Redevelopment is a prime example of politicians telling the public one thing and doing another. They say it will be spent to improve rundown areas and that it will benefit the poor, but in practice it is welfare for rich and connected. Yes, some money goes to the uses they say it will, but as little as possible.

myearth
myearth

Redevelopment is a prime example of politicians telling the public one thing and doing another. They say it will be spent to improve rundown areas and that it will benefit the poor, but in practice it is welfare for rich and connected. Yes, some money goes to the uses they say it will, but as little as possible.

Tammy Tran
Tammy Tran subscriber

5) Downtown stadium for the Chargers games

TammyT
TammyT

5) Downtown stadium for the Chargers games

lifesaver1
lifesaver1

n, because redevelopment funds can only be spent on certain items (e.g. edifices). Making those decisions exclusive of artificial rules meant to wall off funds for building things will be cathartic. We can return to real debates about what to do with our tax dollars.

Robert Castaneda
Robert Castaneda subscriber

It is sad that this latest budget draft is one representative of ideology from both sides of the aisle. Redevelopment tax dollars - given the absence of other revenue is essential to a balanced budget and Jerry Sanders knows it. He is being somewhat disingenuous when he says the Governor has held a gun to their head. That gun - as Sanders calls it - has been there for six months while Governor Brown has been pleading with Republican legislators to place a referendum on the ballot to keep the "current" tax structure in place. Four Republican votes were needed to do this and Sanders may have convinced San Diego republican legislators to negotiate redevelopment as a compromise, but no, not a word. For these six months Jerry Sanders knew full well what the outcome would be given the math of this budget.

Castaneda
Castaneda

It is sad that this latest budget draft is one representative of ideology from both sides of the aisle. Redevelopment tax dollars - given the absence of other revenue is essential to a balanced budget and Jerry Sanders knows it. He is being somewhat disingenuous when he says the Governor has held a gun to their head. That gun - as Sanders calls it - has been there for six months while Governor Brown has been pleading with Republican legislators to place a referendum on the ballot to keep the "current" tax structure in place. Four Republican votes were needed to do this and Sanders may have convinced San Diego republican legislators to negotiate redevelopment as a compromise, but no, not a word. For these six months Jerry Sanders knew full well what the outcome would be given the math of this budget.

Andrew Donohue
Andrew Donohue subscriber

Vlad, what do you think the rest got spent on? Commercial development, major projects, administration?

adonohue
adonohue

Vlad, what do you think the rest got spent on? Commercial development, major projects, administration?

Dennis
Dennis subscriber

Can we ask the prospective mayors where they stand on this issue? It will go a long way for my vote.

Dennis Michael
Dennis Michael

Can we ask the prospective mayors where they stand on this issue? It will go a long way for my vote.

Bob Jones
Bob Jones subscriber

So his honor, the Mayor, is in a bit of a twit? Who cares? The tax dollars he wants to spend are NOT

rwj5125
rwj5125

So his honor, the Mayor, is in a bit of a twit? Who cares? The tax dollars he wants to spend are NOT

Vlad Kogan
Vlad Kogan subscriber

I'd like data on what percent of SD City redevelopment has been spent on "streets, parks, housing." I'm willing to bet its less than 30 percent.

vkogan
vkogan

I'd like data on what percent of SD City redevelopment has been spent on "streets, parks, housing." I'm willing to bet its less than 30 percent.