The Morning Report
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The redevelopment battle between San Diego Mayor Jerry Sanders and California Governor Jerry Brown has turned into a fight to win the hearts and minds of those that care about the state’s most vulnerable.
In announcing formally Tuesday his proposal to lock in an astounding $4 billion in redevelopment projects, Sanders tried everything to show that the effort was about much more than big downtown buildings.
Sanders held the press conference outside a $47 million career training center and affordable housing project in City Heights that benefitted from a redevelopment subsidy. By the mayor’s side were Council President Tony Young, who represents the city’s southeastern neighborhoods, and Councilman Todd Gloria, who represents City Heights. Young said redevelopment meant more than “downtown high-rises and waterfront hotels” to impoverished neighborhoods. Gloria led a call-and-response chant from housing activists and City Heights residents who proclaimed that the community, which is among San Diego’s poorest, still needed redevelopment.
Sanders’ choicest words for Brown were about neighborhoods. Brown is proposing to eliminate redevelopment and save the state money by ending state education subsidies required by the system.
“If this desperate proposal passes, Governor Brown will be remembered as the governor who crippled the economic progress of California’s cities rather than make the tough reforms California obviously needs,” Sanders said. “I’m not about to stand by and let the governor steal money from neighborhoods just like this one.”
Brown’s office said Sanders’ focus is misguided.
“San Diego has a budget deficit of at least $56.7 million, yet some city leaders are rushing to sequester nearly $4 billion for redevelopment projects,” Brown spokesman Gil Durán said in a statement. “This is not right. The mayor is moving to lock up local property tax dollars and shortchange the schools, the police, the sheriff and emergency medical assistance for the most vulnerable.”
In his plan to kill redevelopment, Brown has said he will honor existing debt. That’s prompted municipalities across the state to attempt to accelerate projects in the works — though Sanders’ plan is nearly four times larger than what other cities have tried.
Unpacking the stagecraft and rhetoric from reality in this debate isn’t easy. For example, it’s misleading to argue eliminating redevelopment steals money from local governments.
Redevelopment siphons property taxes away from schools, counties, cities and other local governments to improve rundown neighborhoods. Brown is arguing that the state cannot subsidize development at a time when schools and other core government services need money. But redevelopment backers argue that the process allows for job creation, affordable housing and stimulating growth that wouldn’t happen otherwise.
In short, property taxes are one big pile of money. Sanders and Brown are arguing over how much everyone gets to grab from it and what they can use the money to do.
For San Diego, in neighborhoods where redevelopment doesn’t exist the city receives about 17 cents of every property tax dollar. In redevelopment areas, the city’s take is much more.
The problem is most of the money the city receives only can spend it on building parks, libraries and other infrastructure, not for the people to operate those parks and libraries or the police officers and firefighters to protect them.
The key decision City Council members will face when they vote on Sanders’ plan next Monday is if locking up billions for future projects is better for San Diego than taking less money that could pay for regular services.
Sanders argued the money for projects is more important. Brown’s plan, the mayor said, would overwhelm the day-to-day budget with the burden of fixing the city’s infrastructure while diverting away money to pay for the fixes. Further, the mayor said, redevelopment could provide economic development that would benefit the day-to-day budget beyond property taxes.
Sanders is still counting on much of the city’s economic development to come from downtown. Even taking away $1.1 billion for citywide affordable housing funded by downtown taxes, more than 34 percent — or about $1.4 billion — of the $4 billion project list is targeted for downtown.
Asked about the significant resources going to downtown, Sanders said, “I think that $2 billion is a lot money going outside in our redevelopment areas.”
“Downtown has also been a huge economic generator,” he continued, “in terms of returning sales tax revenue to the general fund, which goes out to every neighborhood in San Diego.”
But Sanders’ redevelopment pitch could amount to nothing more than a $4 billion threat. Sanders and other big city mayors are developing a proposal that would help plug the state budget gap while allowing redevelopment to continue. Over the weekend, the Sacramento Bee reported that the cities’ plan includes the state borrowing money from redevelopment agencies.
Sanders declined to discuss details of this effort, but said something could be announced this week.