From a distance, it looked as if Gov. Jerry Brown had been successful last month in making California redevelopment agencies a thing of the past. Redevelopment supporters decried the loss of projects they said couldn’t be done any other way, while opponents hailed the end to wasteful spending and public subsidies for wealthy developers.
But politics, it turns out, is never that simple.
San Francisco’s is just one such local agency that plans to continue operating, despite Brown’s signature on two Assembly bills — one to kill redevelopment agencies outright and another that allows them to exist if they make payments toward state-funded services, mainly schools.
First, The City’s Redevelopment Agency needs approval from the Board of Supervisors by Nov. 1 to allow the release of $24 million to comply with the survival option. It remains to be seen how much of that money would come out of the agency’s budget and how much city leaders would contribute from the strained general fund. Until that is known, the agency is in limbo.
James Morales, general counsel for the agency, said it is pursuing an “aggressive course” to keep redevelopment alive in San Francisco. The agency plans to work with supervisors to craft legislation to keep the agency afloat, he said. In the meantime, the agency will not approve new activities or new contracts unless the action is required under an existing agreement.
The state paved the way for creation of redevelopment agencies in 1945 to combat urban decay by stimulating investment in blighted areas through public borrowing against the prospect of future tax revenue. Critics of the agencies have pointed to clear abuses of public funds statewide, with anecdotes such as an agency that considered a golf course “blighted” and then used redevelopment funds to pursue improvements.
The San Francisco Redevelopment Agency claims the revamp of Mission Bay as one of its biggest success stories, but it has faced criticism in the past for population displacements and gentrification, especially in the Fillmore area.
Fred Blackwell, executive director of San Francisco’s agency, told The San Francisco Examiner last month that the new state requirements could hamper big projects such as the new Transbay Transit Center and the second phase of a massive residential development at Hunters Point.
While the local agency works with supervisors on legislation it needs to survive here, the California Redevelopment Association is planning to file a lawsuit in the state Supreme Court challenging the recent state legislation on grounds that it violates voter-approved Proposition 22, which restricts the state’s ability to draw money from local coffers.
Going forward alone
If the state’s redevelopment agencies want to continue operating, they will have to make payment toward state-funded services, such as schools. Estimated first-year payments to save $1.7 billion in the state budget:
Source: California Redevelopment Association