About the Colony

Out of the redevelopment business

Walmart’s parking lot in Paso Robles lies in the path of a seasonal creek that gushes from a gully during major storms. Shoppers seldom notice it. It flows through a huge culvert beneath the parking lot. The culvert was built with $1.6 million granted in 1993 by the Paso Robles Redevelopment Agency.

But that agency’s granting days are numbered. Our Legislature and governor passed a law last summer abolishing redevelopment agencies. Last week, the state Supreme Court upheld that law. The governor and Legislature objected to the way the state’s 400 redevelopment agencies got their money.

This Walmart culvert story illustrates the redevelopment process: There was once an empty field in Paso Robles where some people wanted to develop a shopping center that included a Walmart. The members of the redevelopment agency’s board (who were also the City Council) wanted to help.

So, the redevelopment agency granted $1.6 million to build that huge culvert. Walmart opened a year later, and the former empty field grew into a shopping center that pays serious property taxes.

Later, the redevelopment agency supplied an additional $2 million to cover the shopping center’s share of the cost of widening the nearby Niblick Road bridge. But the city still came out ahead.

There’s a big difference between the old taxes on the empty field and the higher taxes on the shopping center. That difference is called the “tax increment.” State rules gave redevelopment agencies the lion’s share of the tax increments.

Other agencies, such as the county and schools, continue getting the same taxes they’d been getting on the empty field, plus a smaller share of the tax increment. They don’t benefit equally. And we’ll never know if Walmart would have been built without the $3.6 million subsidy.

Paso Robles’ redevelopment agency also financed many other projects. Some sought to revitalize downtown. One supplied $620,000 to improve the downtown park. Another provided $185,000 for a storm drain at 11th and Pine streets to accommodate the Park Cinemas. The agency also financed many low-income housing projects.

But come Feb. 1, California’s redevelopment agencies lose their hold on the tax increments, except as needed to repay loans and fulfill existing commitments. Their share will go instead to schools, counties and special districts. The state will then, in turn, give those agencies less.

California is no longer booming, no longer immune to recessions. It can’t afford to subsidize development.

Reach Phil Dirkx at 238-2372.