The Performance Institute’s Carl DeMaio, who hosted this blog a week ago, thinks City Councilwoman Donna Frye is wrong to demand immediate repayment of the Redevelopment Agency’s debts.
Frye, as I explained earlier, has been pushing to have the agency hand over $20 million of the estimated $200-and-some million it owes to city, to help ease San Diego’s budget crunch.
“Donna, I think, is only touching the tip of the iceberg,” DeMaio told me. “I don’t think she understands how redevelopment agencies work. She wants $100 million cash now. Well let me tell you, $100 million cash now would support $1.4 billion in infrastructure.”
(The $100 million figure is from a Frye quote I mentioned earlier, referring to the amount she believes the Centre City Development Corp. owes the city.)
Here DeMaio’s proposal in a nutshell: Redevelopment agencies work by taking out loans to pay for the revitalization of “blighted” areas, and then use the resulting increase in property taxes to repay them. And instead of having the San Diego’s Redevelopment Agency give the city money, the city should give the Redevelopment Agency some of its outstanding debts, to be paid back from the same property tax increment.
In other words, instead of turning to the Redevelopment Agency for help on the revenue side, the city should be looking to it for relief on the expenditure side.
DeMaio told me that, based on his conversations with a former CCDC board member, the corporation has enough revenue to pay for servicing another $700 million in debt. Instead of using that capacity on more redevelopment, he thinks CCDC should take over some of the city’s current debt repayments for major downtown projects.
For example, turning payments for the San Diego Convention Center over to CCDC would free up roughly $14.5 million in the city’s general fund, he estimates. Having it take over the Petco Park loans would free up $20 million.
Frye said she is intrigued by the idea.
“That sounds lovely … I would love to talk to Carl about that,” Frye said, though she cautions that this type of transfer might not be legal under the restrictions of the state’s redevelopment law.
On the topic of redevelopment, reader BP asked me this morning about the Grantville Redevelopment Project Area. Though the county has filed a legal challenge to the designation, and a trial date has been set for March, things are apparently moving ahead. BP said there was a presentation last night about “vision plans” for the area. I left messages with Councilman Jim Madaffer, but if anyone has any more information on the presentation, please send it my way, along with your questions.