Editorial: Brown should reconsider redevelopment agencies

It’s time for a reality check on redevelopment agencies. We recognize the need to balance the state budget, but we have some major concerns about Gov. Jerry Brown’s proposal to ditch redevelopment agencies.

Locally, redevelopment remains a useful tool, especially for communities trying to breathe new life into struggling downtown business districts.

Take Atascadero.

On March 5, the new 10-screen Galaxy Theater is scheduled to open there. That project might never have been possible had the city’s redevelopment agency not stepped in to guarantee a $1.5 million loan. And that would have meant fewer jobs and significantly less tax revenue for the city.

Atascadero’s redevelopment money also has been used to spruce up businesses downtown; provide funds for new signs; and even help restaurants to advertise online.

There have been similar business improvements in other local communities — along with long lists of major infrastructure projects and affordable housing units funded through redevelopment.

Certainly, there is an element of risk involved in some of the public/private ventures. But the alternative often is to do nothing at all and allow fading downtown business districts to continue to sink.

That may well be the case if redevelopment is no longer an option in the state.

And when the Central Coast — indeed, all of California — is trying to get back on its financial feet, does it make sense to discontinue a program that’s been proven to generate jobs and create more tax revenue?

That said, we agree there is cause to re-evaluate how redevelopment funds are used.

In some cases, we believe communities should have more leeway in allocating revenue. The cities of Arroyo Grande and Grover Beach, for instance, have been interested in using redevelopment dollars to help fund a homeless shelter in the South County, yet that’s not permitted under current regulations.

Also, we don’t doubt that in some California communities, it would be wise to reconsider moving forward with an expensive redevelopment project — a museum or a major league ball field, for instance — when more essential services such as schools, police departments and libraries are hurting.

As state officials tackle the unenviable job of balancing the budget, redevelopment should be on the table — indeed, every single state program should be.

But we strongly believe it’s premature to abandon the program altogether, without a clear picture of what that might mean to local communities.

Atascadero Program

The Atascadero redevelopment agency’s most recent program —loan guarantees for new restaurants — has received poor reviews from some city residents.

Given the high risk involved in opening new restaurants — and the recent closures of several downtown eateries — we, too, were skeptical about risking taxpayer dollars on such ventures.

However, the city’s redevelopment agency has a number of safeguards in place to limit risk, including requiring recipients to put up collateral to guarantee the amount of the loans. Also, recipients would have to be approved by a bank to qualify for the program, which should eliminate applicants who don’t have sound business plans.

The city has earmarked $1 million for restaurant loan guarantees, though the amount offered to any single applicant will be capped at $500,000. If the program is successful, it could be used for other types of businesses. Our take: We do have some reservations about investing in restaurants, but we believe the city has done a good job of protecting taxpayer dollars.