Dan Walters: California redevelopment is dead; long live redevelopment

dwalters@sacbee.comSeptember 7, 2012 

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.

Ever since, 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 enacted a batch of bills re-creating it, or something very like it, albeit with new names, several of which are revised versions of "infrastructure financing districts."

Actually, the power for local governments to create IFDs, as they are known, has been on the books for years. The districts could 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 other local governments from which property taxes were diverted. It was much easier to use redevelopment powers, which did not require the IFDs' voter and governmental approvals.

If Brown signs all of the pending IFD bills, including one carried by Assembly Speaker John A. Pérez, 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 gave to local schools.

Pérez's Assembly Bill 2144 renames them as "Infrastructure and Revitalization Financing Districts" and still requires voter approval, reduced to 55 percent, while Senate Bill 214 by Sen. Lois Wolk, D-Davis, removes 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, including manufacturing.

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.

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