SLO County cities set to fight for redevelopment agencies

Last October, local city officials from around San Luis Obispo County gathered and pulled on black-and-white boxing gloves to signify their support for a state measure aimed at protecting their local property tax dollars and redevelopment funds from state takeaways.

Now, nine months later, some local cities are again gearing up for a fight to keep their money going toward local revitalization projects.

California’s budget for the new fiscal year, which started Friday, includes major changes to community redevelopment agencies.

The compromise package that emerged this week eliminates the state’s nearly 400 redevelopment agencies — or allows them to continue as long as they hand over $1.7 billion in revenue to the state for school districts and local governments.

“I’m pretty depressed,” Grover Beach City Manager Bob Perrault said Thursday. “It’s not to say the city won’t continue to make progress — I think it will. The problem is Sacramento seems to think it knows what’s best for local agencies and our ability to make our own decisions.”

Local governments throughout California have formed redevelopment agencies, which use a portion of property taxes to pay for projects in areas deemed blighted. Advocates say the agencies have helped job creation and economic growth in their areas.

“As our state struggles to recover from the recession, wholesale elimination of these agencies is the wrong path to pursue,” said Sen. Sam Blakeslee, R-San Luis Obispo, who did not support the legislation.

Two groups, the League of California Cities and the California Redevelopment Association, plan to challenge the law in court. They argue that the change violates Proposition 22, a ballot initiative passed last fall that prohibits the state from further raids on transportation, redevelopment or local government money.

Local cities may have an opportunity to join the lawsuit or send money to support it, Perrault said, though the City Council will make that call.

Arroyo Grande has sent about $400 to the California Redevelopment Association for its legal preparations, City Manager Steve Adams said.

Dissolving the city’s redevelopment agency would eliminate its economic development plans, cut funding for low-income housing projects and shift about $328,000 in related costs to the general fund, city officials have said.

In Paso Robles, redevelopment funds have been used to rehabilitate Downtown City Park, build a library, aid in the establishment of a low-income childhood education center and finance low-income housing. City Manager Jim App said city officials are still analyzing the law’s impact and the city’s options.

The Grover Beach Redevelopment Agency receives about $800,000 to $1.1 million a year, which has paid for some improvements to part of West Grand Avenue, low-income housing and efforts to support local businesses.

Perrault said if the city decided to maintain its agency, it would have to send an estimated $350,000 to $380,000 to the state this year, and about $80,000 a year after that.

In January, the Atascadero City Council voted to fast-track some redevelopment plans, allocating more than $32 million toward numerous projects.

Jim Lewis, assistant city manager, said Atascadero will participate in plans to fight the change.

“It’s absolutely disgusting and extortion that the governor would steal this money illegally against Proposition 22’s wishes,” he said.

Atascadero’s attorney is still conducting a legal analysis of the law, Lewis said, but “this illegal action could have significant impact on our projects.”

Pismo Beach, however, is the lone exception among the cities in San Luis Obispo County with redevelopment agencies. It will not fight the state’s plan.

Last summer, the Pismo Beach City Council voted to consider dissolving its redevelopment agency at a future meeting — which has not been held — after a report found there was no more blight to address.

That move upset Lucia Mar Unified School District officials, who had been expecting money from Pismo Beach’s redevelopment agency to build and maintain education facilities.

City Manager Kevin Rice wrote in an email that the elimination of the agency would have an overall positive impact on the city.

The Associated Press contributed to this report.

Reach Cynthia Lambert at 781-7929. Stay updated by following @SouthCountyBeat on Twitter.