Redevelopment has been both cussed and discussed over the many years it has been in existence. It has been the subject of ridicule, yet praised in numerous situations for its ability to revitalize a community.
From our Board of Supervisors’ point of view, redevelopment is simply another financing tool to assist communities with infrastructure needs that are becoming more costly with less funding to go around.
A redevelopment agency uses borrowed funds to invest in public improvements and participate in public/private partnerships to stimulate private business. The financial power of redevelopment comes from a portion of future property taxes that is set aside for repayment of debt incurred by the redevelopment agency.
This is called the “tax increment” because it is a portion of the increase in property tax revenues collected as assessed property values gradually rise. Tax rates are not increased, but tax revenues increase when new development occurs or when properties are sold. The redevelopment agency borrows against the stream of future tax increment available over 45 years.
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One of the major concerns that has been expressed is the big “E” word — eminent domain. One of the solutions to this fear is to limit the eminent domain powers when establishing a redevelopment agency.
Laws have also been established to limit the use of eminent domain to public projects, prohibiting its use for the purpose of subsequent transfer (sale) of the property to another private party, such as a shopping center developer (Since it was established in 1987, Paso Robles has never used eminent domain in its redevelopment area).
Many incorporated cities have established redevelopment areas with much success. As the former mayor of Paso Robles, I saw the benefit of redevelopment time and time again.
From a historical perspective, I used to own the corner of 11th and Pine streets. When I tried to get a project at that site, I was told that a major drainage project would be required before anything could be built there. So I sold the property. Consequently, the land changed hands many more times with the same challenge regarding the cost to address the drainage problem.
Then along came redevelopment. The redevelopment agency funded the drainage improvements that amounted to around $200,000. This allowed the proposed project on 11th and 12th streets to move forward. That project is Park Cinemas. In my opinion, that was the catalyst to revitalizing Paso Robles’ downtown.
In addition to infrastructure projects, there is a low and moderate income housing set-aside that is used to support affordable housing. Under state law, 20 percent of the tax increment must be set aside and used to support affordable housing. This, too, was successfully utilized in Paso Robles for senior and low and moderate housing projects.
Over the next couple of months, our staff will prepare a timeline, budget and schedule where we will engage with each of the communities that may have an interest in this tool. It may not be for everyone but there are certain areas that may find this beneficial. We, as a collective Board of Supervisors, are seeking any alternative methods to help our communities in these challenging and changing times.
We will be providing the pros and cons about redevelopment and will take the time necessary to address all concerns and questions. Our decisions will be based on the desires of our communities, so we look forward to hearing from you.
Frank R. Mecham is chairman of the county Board of Supervisors.