Redevelopment Lives, Just With Less Money

 

Redevelopment is dead. Long live redevelopment.

After seven months of debate, the state program that diverts property taxes from schools and other local governments to improve rundown neighborhoods was eliminated Wednesday as part of the state budget’s approval. But Gov. Jerry Brown also signed a companion bill that will allow redevelopment agencies to reestablish themselves if they pay more of their tax money to schools.

The situation sounds simple enough, but the future is anything but. Redevelopment backers, notably San Diego Mayor Jerry Sanders and other big city mayors, have supported calls for immediate lawsuits against the legislation. One could be filed as soon as this week. The state likely will have to go to court to try to unweave the tangled webs spun by cities to defend billions in future redevelopment dollars and properties from state action.

In the meantime, cities may have to decide if the school payoff they’ll need to make to keep redevelopment is worth it.

“I don’t think it’s the end,” said Frank Alessi, head of the Centre City Development Corp., San Diego’s downtown redevelopment agency. “But it puts a huge crimp in our project activities.”

Two projects potentially crimped are big. Downtown redevelopment dollars always have been part of plans to finance a Convention Center expansion and a new Chargers stadium. Sanders’ office and a Chargers official couldn’t be reached to discuss the redevelopment decision.

Beyond those efforts, the decision dramatically alters a system that long has been San Diego’s preferred means of financing numerous projects, including parks and affordable housing, which the city says it otherwise wouldn’t be able to pay for.

Brown and state lawmakers are counting on $1.7 billion from eliminating redevelopment to help balance California’s budget next year. In future years, the state wants $400 million from the agencies to help pay for school money lost to redevelopment.

San Diego redevelopment would lose approximately $86.5 million over the next two years, according to city estimates.

The biggest cash loser would be San Diego’s downtown agency, CCDC, which would forgo approximately $47 million next year and $11 million annually from there, Alessi said.

If the city opts into the deal, after next year’s big hit the downtown agency would receive about 9 percent less in property taxes annually.

But the agency says that cut will have a disproportionate effect on its spending. Alessi said CCDC would have to delay projects so it could pay its existing debts.

Statewide, future years’ payments would make up about half the money agencies have at their discretion, said John Shirey, head of the California Redevelopment Association, an advocacy group.

“These are substantial takes of funds from these agencies,” Shirey said.

Exactly how much remains up for debate. Two state senators held out on the main budget vote Tuesday night because they wanted assurances of detailed financial analyses on the effects to individual agencies, said Alicia Trost, spokeswoman for Democratic Senate leader Darrell Steinberg.

Everyone, including Brown, has agreed on the need to perform the analysis, Trost said.

In San Diego, City Councilman Todd Gloria, who heads a redevelopment committee, has asked for a thorough analysis of the laws’ effects. Gloria also asked to explore a lawsuit against the state.

He won’t be the only who wants to go to court. The League of California Cities is planning to file a suit as early as this week and is seeking action directly from the state Supreme Court.

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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18 comments
Peggy Sitta
Peggy Sitta subscriber

"Affordable housing" = large numbers of government workers lining their own pockets year after year at the expense of the taxpayers. And on top of it they cause many more problems than they help.

psitta
psitta

"Affordable housing" = large numbers of government workers lining their own pockets year after year at the expense of the taxpayers. And on top of it they cause many more problems than they help.

Will Dawson
Will Dawson subscriber

Watch how fast Sanders and the CCDC claim that the state is about to STEAL OUR MONEY if we don't commit the funds to a project fast. And the project will be a new home for the Chargers. Sanders and his developer buddies will begin a Loud Public Relations program stating " Don't let the state steal our money" and then the stadium project will be the only one that would eat up the $ 500,000,000.00 the CCDC has. There will also be a push to put the issue on a special election that will give voters a "CHOICE" "Vote for a new stadium or send the CCDD funds back to the state"

Sandawg
Sandawg

Watch how fast Sanders and the CCDC claim that the state is about to STEAL OUR MONEY if we don't commit the funds to a project fast. And the project will be a new home for the Chargers. Sanders and his developer buddies will begin a Loud Public Relations program stating " Don't let the state steal our money" and then the stadium project will be the only one that would eat up the $ 500,000,000.00 the CCDC has. There will also be a push to put the issue on a special election that will give voters a "CHOICE" "Vote for a new stadium or send the CCDD funds back to the state"

Richard Ross
Richard Ross subscribermember

Ongoing redevelopment agencies like CCDC would be most appropriate in a Socialist Nation like Russia, China and north Korea. Since 1776 those who served in our miltary fought to preserve our Democracy. Free enterprise is a major component and should take the place of CCDC which has served it's purpose.

Activist
Activist

Ongoing redevelopment agencies like CCDC would be most appropriate in a Socialist Nation like Russia, China and north Korea. Since 1776 those who served in our miltary fought to preserve our Democracy. Free enterprise is a major component and should take the place of CCDC which has served it's purpose.

David Crossley
David Crossley subscriber

"...the CCDC would have to delay projects to pay their existing debts." What a novel concept...

aardvark6
aardvark6

"...the CCDC would have to delay projects to pay their existing debts." What a novel concept...

Richard Tanner
Richard Tanner subscriber

It is time for the Mayor to get specific.

Richard
Richard

It is time for the Mayor to get specific.

Robert Castaneda
Robert Castaneda subscriber

In my mind this is a failure of "Leadership" by Republican members of the State Legislature. Nathan Fletcher (candidate for Mayor of San Diego) and his fellow GOP members had a plethora of opportunities to seriously engage in the budget process with "like-minded" Dems and the Governor on this issue of funding the public's agenda. But where were they? In the ideological corner with the door shut with a sign that read: "No Statesmen Reside Here!"

Castaneda
Castaneda

In my mind this is a failure of "Leadership" by Republican members of the State Legislature. Nathan Fletcher (candidate for Mayor of San Diego) and his fellow GOP members had a plethora of opportunities to seriously engage in the budget process with "like-minded" Dems and the Governor on this issue of funding the public's agenda. But where were they? In the ideological corner with the door shut with a sign that read: "No Statesmen Reside Here!"

Dianne Parham
Dianne Parham subscriber

When I found out Coronado was considered a redevelopment zone, I lost any confidence (small as it was) in the Redevelopment process. It is clearly a broken system and while the mayor is trying to save it for his developer friends, the rest of us should take a moment to consider the kinds of projects he has tried to push through and what community good they really do. I've said it before, and I'll say it again, billionaires like Spanos should pay for their own playpens.

dialyn
dialyn

When I found out Coronado was considered a redevelopment zone, I lost any confidence (small as it was) in the Redevelopment process. It is clearly a broken system and while the mayor is trying to save it for his developer friends, the rest of us should take a moment to consider the kinds of projects he has tried to push through and what community good they really do. I've said it before, and I'll say it again, billionaires like Spanos should pay for their own playpens.

Ian Trowbridge
Ian Trowbridge subscribermember

With less money maybe CCDC or its successor will waste less money.

iantrowbridge
iantrowbridge

With less money maybe CCDC or its successor will waste less money.

Don Wood
Don Wood subscriber

The UT recently ran a story about hundreds of millions of dollars local schools and universities are planning to build with state funding. I dont' mind paying school teachers and professors reasonable wages, but is more money needed so that colleges can build new planatarium buildings in the middle of a recession? How much of the money we spend "per student" on education is going into the pockets of big real estate developers? I'd be alot happier paying for schools if I thought less of that money was being pumped directly to big construction contractors. Why do those who complain about high teacher salaries silent when it comes to the big school construction projects being funded by taxpayers?

Don Wood
Don Wood

The UT recently ran a story about hundreds of millions of dollars local schools and universities are planning to build with state funding. I dont' mind paying school teachers and professors reasonable wages, but is more money needed so that colleges can build new planatarium buildings in the middle of a recession? How much of the money we spend "per student" on education is going into the pockets of big real estate developers? I'd be alot happier paying for schools if I thought less of that money was being pumped directly to big construction contractors. Why do those who complain about high teacher salaries silent when it comes to the big school construction projects being funded by taxpayers?