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The government agency tasked with redeveloping blighted areas of southeastern San Diego wants to dramatically restructure its boundaries in order to bolster lagging tax revenue, a move that comes amid questions about the agency’s solvency.

Southeastern Economic Development Corp. officials say the plan is necessary if the agency is expected to have a significant impact on improving the area, where it is responsible for redevelopment in four zones covering roughly 7-square-miles bounded by State Route 94 to the north, Interstate 5 to the south and west, and 69th Street to the east.

Three of those four zones are projected to fall short of needed funds over the next five years.

Before the end of the month, the agency will ask the City Council to approve a five-year plan that proposes combining the four redevelopment zones the agency currently manages into a single sprawling zone. It also envisions adding parts of the Greater Logan Heights neighborhood, something activists there are questioning.

The move, SEDC officials say, would expand their tax base and allow them to spread their tax money throughout all the areas to avoid funding shortfalls and spur development in them.

Under redevelopment, areas deemed blighted can capture a greater share of the tax revenue and use it for revitalization projects and development subsidies within their boundaries.

But SEDC says the four current redevelopment zones are too small to generate enough tax revenue within any one of them to make a difference.

“If the fiscal merger doesn’t happen, it means we’ll continue to be a very small organization with limited impact, and that there’s a cap on what we can do,” said Brian Trotier, SEDC’s interim president.

Since a scandal over secret bonuses ousted SEDC President Carolyn Smith in 2008, the agency has struggled to jumpstart development projects and been subject to public questioning about whether it is the best organization to handle redevelopment in southeastern San Diego.

The agency has been seeking ways to draw in more tax money, and last month, Trotier asked the City Council to consider raising the caps that limit how much in taxes the agency can collect over its lifetime. SEDC’s sister agency, the Centre City Development Corp., is seeking a similar cap increase to expand its capacity by billions of dollars for redevelopment downtown.

Its current proposed plan is already encountering resistance among some active residents of areas that could be affected by it. SEDC is making concurrent preparations to corral several neighborhoods in Greater Logan Heights, east of downtown.

But residents are concerned the community, which has long struggled to attract private investment, would relinquish control of decisions about development. They are also worried money generated in one community would be shipped out to pay for projects in others.

SEDC is proposing to create a 50-member group, known as a Project Area Committee, that would advise the agency on redevelopment across the sprawling redevelopment zone.

The single committee would include representatives from a wide swath of southeastern San Diego, and that has raised alarm about how effective such a large group will be in making recommendations to SEDC. Neighboring Barrio Logan, whose redevelopment zone is administered by the city’s Redevelopment Agency, has a 13-member committee.

“It’s going to be difficult for people in our community to have a say in what comes in,” said Ben Rivera a Logan Heights resident and member of the Southeastern Planning Group, which advises the city’s Planning Department on development in the area. “It’s difficult for people to have input on an agency that will be taking recommendations from a 50-member panel.”

On Monday, the Southeastern Planning Group split on a vote to endorse SEDC’s proposed plan. Members said they were concerned the agency had not made a good-faith effort to consult with local groups throughout the process, and that many residents are still in the dark about the plan.

But Trotier said the community input phase is yet to come. If the City Council approves the plan when it is tentatively scheduled to consider it on May 25, SEDC would begin an 18-month process to implement the plan, which under redevelopment law requires that the agency engage in outreach efforts.

“We’re saying no, that’s backwards,” said Katherine Lopez, founder of the Memorial Town Council in Greater Logan Heights. Lopez said community input should have started long ago, when SEDC started drafting its strategic plan last summer.

Trotier said that the agency, which has long suffered from perceptions that it has brushed aside community involvement, is still learning to do outreach.

Beginning in July, SEDC conducted a survey of residents at local events like street fairs to gauge support for SEDC’s expansion plans. But the survey netted only about 200 respondents, and community members say the questions were misleading because they presented a rosy picture of redevelopment that lacked context on its possible negative impacts.

Trotier also acknowledged that under the proposal to combine and expand the project area, money from a new area like Logan Heights could be spent in another part of the project area, like Mount Hope or Southcrest. The ability to do that is part of the reason the proposal is so appealing to SEDC.

Of the four existing project areas — Southcrest, Mount Hope, Gateway Center West and Central Imperial — only Mount Hope is expected to run a balanced budget in the next five years. SEDC says the merge will help relieve the pressures on the other three by expanding the area’s tax base and allowing money to move more freely across the single redevelopment zone.

“We don’t have enough money to do everything for every neighborhood we want,” Trotier said. “What we’re saying is each neighborhood and their representatives will say, ‘Here are our first desires.’ … Then it’s up to the agency to decide. That’s how government works.”

Please contact Adrian Florido directly at adrian.florido@voiceofsandiego.org and follow him on Twitter: twitter.com/adrianflorido.

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