If the bills are successful, Oakland Mayor Jean Quan said the city would have to agree to pay about $40 million to the state by Nov. 1 or dissolve the Oakland Redevelopment Agency. After that, the agency would still have to make $10 million in annual payments. Quan said this would force the city into "scraping the bottom of the barrel," wiping out reserves and delaying affordable housing projects.
Quan's comments came at Tuesday night's city council meeting, as she and other city leaders agreed to keep fairly quiet on the issue, expecting that fierce litigation is imminent and concerned that saying too much on the record could compromise the city in a legal fight.
Indeed, the California Redevelopment Agency plans to file a lawsuit with the state Supreme Court "in the near future," while asking for a stay on the legislation so agencies can continue to operate while the court battles unfold, spokeswoman Kathy Fairbanks said.
"This is the third lawsuit filed against the state for trying to take redevelopment funds in the last four years," Fairbanks said. The two prior lawsuits are part of why Proposition 22, passed with a wide margin of public voter support in 2010, includes protection of those funds, she added.
Officials at the state and Oakland redevelopment agencies declined to comment Wednesday on whether the city would be a party in the lawsuit.
"My own opinion is that the (proposal) is not only unjust and destroys jobs, but also is illegal," said Councilmember Rebecca Kaplan (At-Large). The council is expecting a legal briefing Thursday. It was unknown exactly what Oakland's obligations may be, but millions in program dollars largely devoted to low- and moderate-income housing programs could potentially be on the chopping block.
Redevelopment is designed to help cities eliminate blight and revitalize struggling, economically depressed areas by reinvesting local property tax revenues that would otherwise be shared with counties, cities and schools.
For example, the city's Mortgage Assistance Program, which aids first-time homebuyers in Oakland with low-interest, low-pressure loans, has depended on redevelopment funding for $2.5 million annually to help between 50 and 100 homebuyers pull together down payments and other needed cash for homes that cost $503,500 or less.
Program manager Jackie Campbell said the program is especially important now in this era of foreclosures and decreased housing prices. "Redevelopment is our primary source of funding," Campbell added. Other sources tend to be grants, which are often one-time-only resources.
There are about 400 redevelopment agencies in cities and other local governments across the state, and California stands to save $1.7 billion with their elimination, according to budget projections. Cities may choose to pay their individual share of that money in order to keep their agencies alive, but would also have to pay smaller, annual contributions to the state in perpetuity.
Redevelopment opponents have called the program a drain on state funds at a time when state finances are in brutal shape, citing what they say is abuse of program funds that are used for expenses that aren't appropriate, essentially using the redevelopment cash to plug other holes in their budgets.
"We're deeply disappointed that slim majorities in the legislature passed this budget that relies on the illegal extortion of revenues from redevelopment agencies that will never materialize," said John Shirey, executive director of the California Redevelopment Agency, in a statement Tuesday night.
According to the state agency, most East Bay cities would face multimillion-dollar payments. Those include Fremont at $9 million; Hayward at $4 million; Concord at $6.2 million, Alameda at $5.2 million; Emeryville at $13.2 million; and Richmond at $10.4 million.
Cities like Berkeley and Walnut Creek would be called to pay about $413,000 and $1.3 million, respectively, because they have smaller redevelopment agencies.
Contact Sean Maher at 510-208-6430.
It is a sad, sad day in California history. The legislature has foolishly eliminated a powerful tool for improving and investing in our communities, while at the same time approving more steep cuts to higher education. Our state is no longer investing in a prosperous future. Redevelopment has proven its effectiveness over the years by drastically improving economically downtrodden communities. It is one of the major funding sources of affordable housing, so we will be seeing a lot less of that get built. Our public higher education system, once the premiere model for public higher education system in this country, is already beginning to lose its competitive edge. This is illustrated by the recent departure of three prestigious cancer researchers from UCSD. The university simply could not compete with the offers of private institutions. The budget the legislature has passed is ill-advised and makes me very concerned for the future of our state.
ReplyDeleteRedevelopment Agencies funneled funding away from public schools, police and fire departments statewide and developers (usually the well connected ones) were among the chief beneficiaries. Barring some quixotic Sacramento legerdemain, the public schools and public safety stand to benefit as a result of this vote.
ReplyDeleteThat is not an accurate characterization of the situation at all. To date, the state has made up every dollar that went to redevelopment agencies that would have otherwise gone to another agency. The budget, as passed, does not redistribute any of the money taken from redevelopment to education or public safety. In fact, the budget has steep cuts to K-12 education if the overly-rosy revenue projections are not met. That is an all too real possibility.
ReplyDeleteIt is not an either/or equation. We should be investing in our communities AND our children. Both are our future. this budget does not provide sufficient funds to do either. Pitting redevelopment against education and public safety doesn't serve anyone well. Our physical communities should be prioritized along with education.
ReplyDeleteThe Redevelopment Agency in Emeryville mostly just built suburban style shopping malls. They didn't help to create a livable city at all...just the opposite. On top of this, they've left us with a mountain of debt. I've noticed the developers have sure made out well. These are the same developers that gave generously to the re-election campaigns of he City Council majority.
ReplyDeleteThat "Sacramento legerdemain" surely is in the budget. Check it. Education surely isn't getting more money. In fact, it stands to have money taken away under the budget that was just passsed. No one will benefit from the elimination of redevelopment.
ReplyDelete"No one will benefit from the elimination of redevelopment"? That sounds like hyperbole. In fact the people of California will benifit. To totally disregard any negative consequences of redevelopment is pay blind allegiance to it. If redevelopment were a pure good, there wouldn't be so many bipartisan voices raised against it.
ReplyDeleteShow me how the people will benefit! They won't. Education isn't getting any additional money out of this. Proposition 98 set the amount of money the state has to spend on education. You can bet that the state isn't giving more money to education than they have to.
ReplyDeleteThis is really sad news! There are so many good public projects in the pipeline right now in Emeryville that now won't get built. We can day goodbye to the bike/ped bridge over the freeway to the Bay Trail at 65th Street, the bike/ped bridge over the railroad tracks at Bay Street, pedestrian safety improvements to the San Pablo/Adeline/Macarthur intersection, etc. All of these things would have dramatically improved pedestrian and bike circulation around town. I guess the state doesn't care about public infrastructure and public well-being and public safety and public health and all of the other ways the public would have benefitted from these and other projects. Thanks, California Legislature, for making my city a worse place to live.
ReplyDeleteI would never have voted for Governor Brown if I had known he was going to pull this garbage. Here he is cutting funding from cities that need the funding the most. They also happen to be the cities where a lot of his supporters live. I'm not going to vote to reelect anyone who voted for this terrible budget. They are all shirking their responsibility to the people of this state.
ReplyDeletereaders: the emeryville redevelopment agency has been replaced by the community development commission of emeryville. this change was made at the june 21 council meeting. from what i can tell, it is business as usual except changing the name of the bank account and when the cities of california file their lawsuit next week against the abolishment. you can learn more by reading the council agendas and by going to www.sco.ca.gov/ard_locrep_redevelop.html
ReplyDeletethis is the community redevelopment agencies annual report for fiscal year ended june 30, 2009 compiled by controller john chiang's office.
alas, the tattler continues to accept "anonymous" as a contributor while speaking about transparency etc..
ReplyDeletemore importantly, with browns signing of an end to redevelopment, emeryville ,so the article indicates, has to pay about 13 million dollars...
once again , the inept performance of city mgr okeefe, rears its head and the city continues to pay this guy over 200k for all his failed performance thus condoning his refusal to take the responsibility for any of the city's financial difficulties...
i continue to say remove him and the council members who are not doing their jobs.
walt watman
I just hope the Agency has the $13 million extortion payment for the state in order to stay in existence. Well, actually, I hope the legal challenge to the legislation is successful, but if not, I hope they can at least make the extortion payment.
ReplyDelete