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There were very few people in this town that were paying attention to the “cap” thing downtown when it came up earlier this year. I was one of them, a policy wonk that cared about plans filled with esoteric planning jargon, who has been following this for a decade.
I have been skeptical about the authority the Centre City Development Corporation (CCDC) had in approving development in downtown, and their record in implementing redevelopment and economic development. I have been a vocal critic of large publicly funded projects that do not benefit the community. In fact, I firmly believe that downtown is for everybody.
At the same time, redevelopment, if done right can be a driver of good jobs and revitalize communities. Other agencies across the state, like Los Angeles Community Redevelopment Agency, did it. With the certainty of the governor signing the bill lifting the redevelopment tax increment cap in downtown, it is time for a level-headed and pro-active approach going forward. As we have seen every year in the fight to preserve redevelopment dollars in state budget, the state giveth and the state taketh away. State law requires limits in redevelopment plans on the tax increment that can be raised. And state law makes several exemptions for specific agencies in many of its conditions.
When the largest redevelopment agency in the state, Los Angeles, ran into the cap, they tried several ways to continue investing downtown, but ran into roadblocks. In the end they created new project areas so that they could fund major development like the Grand Avenue Project in downtown. A balanced approach would ensure that returns on our investments in downtown continue to reap benefits into the future.
So, here are two recommendations:
Firstly, conduct public outreach on what we do with the billions that have landed in our lap. This is not free money for downtown only. Tax increment is the redistribution of the pot of additional property taxes from new development, a lot of which would have reverted to the city’s general fund in the absence of redevelopment. Therefore, the money needs to be shared amongst the needs of the city’s communities, specifically general services (including public safety), youth services, affordable housing and transit. Such a strategy was tried in 2003 through a citywide Notice of Funding Availability for affordable housing (NOFA) of which downtown played a significant role in procuring affordable housing in other redevelopment areas in the city.
Secondly, revise the redevelopment plan with the expectation of new revenue. This plan is an expression of local redevelopment agency control over how it would like to see the area redevelop. Included in this would be projects that would be funded. The plan needs to address redevelopment and economic development issues, as well as funding a citywide affordable housing strategy. The adoption of the redevelopment plan goes through a public process as outlined in state law.
The mayor and council can work together to give shape to a new direction in downtown.
Murtaza Baxamusa lives in La Jolla and is the Research and Policy Director for the Center on Policy Initiatives.