Redevelopment efforts could lurch from grave

Redevelopment is dead — or so proclaimed Gov. Jerry Brown and legislators last year when they canceled the legal authorization for the six-decade-old urban renewal program and seized its assets to close the state’s budget deficit.

Since then, state and local officials have been dismantling hundreds of local redevelopment agencies and squabbling over payment of their debts and disposition of their assets.

Redevelopment is dead. Long live redevelopment.

The just-concluded 2012 legislative session passed a batch of bills re-creating it, or something very like it, and several of the bills are revised versions of “infrastructure financing districts.”

The power for local governments to create IFDs, as they are known, has been on the books for years. The districts can issue bonds to finance improvements and divert some of the “incremental” property tax income from project areas to repay the bonds.

They were infrequently created because they required the approval of two-thirds of local voters, as well as permission from other local governments from which property taxes were diverted. It was much easier to use redevelopment powers, which did not require the financing districts’ voter and governmental approvals.

If Brown signs all of the pending IFD bills, including one carried by Assembly Speaker John A. Perez, districts could be created without voter approval and would acquire an expanded list of allowable projects, including some inherited from the now-defunct redevelopment agencies.

They would not, however, be allowed to divert property taxes from school districts, which was a sore point with redevelopment agencies. The state treasury had to make up about $2 billion a year in taxes that the agencies retained rather than give back to local schools.

Perez’s Assembly Bill 2144 renames them as “infrastructure and revitalization financing districts,” The districts would still require voter approval, reduced to 55 percent.  Senate Bill 214 by Sen. Lois Wolk, D-Davis, would remove voter approval altogether.

Assembly Bill 2551 by Assemblyman Ben Hueso, D-San Diego, authorizes the districts to finance “renewable energy” projects, while Senate President Pro Tem Darrell Steinberg’s Senate Bill 1156 allows local governments to create “sustainable communities investment authorities,” very similar to redevelopment agencies, to promote housing and other projects to reduce greenhouse gas emissions.

Redevelopment agencies had transmogrified from tools to clean up urban blight and improve housing into vehicles for crony capitalism, pumping subsidies into retail projects, hotels, auto malls, etc., whose developers had political pull.

Would these new agencies, if Brown agrees to create them, be any better from that standpoint? It’s very doubtful.

Dan Walters covers state politics for the Sacramento Bee.

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