For many cities that have endured the painful process of dissolving their redevelopment agencies, the bloodletting has begun anew.
The Third District Court of Appeal has ruled that two “re-entry agreements” between Sonoma County and its former redevelopment agency are valid under the redevelopment wind-down law. The case marks the second time this year that the Third District has upheld re-entry agreements, suggesting that local governments are beginning to get the upper hand against the state Department of Finance in post-redevelopment litigation.
The case involves the county’s desire to retain $14 million in tax-increment funds for two projects: street and sidewalk upgrades on Highway 12 north of Sonoma, and a mixed-use project on the site of an abandoned shopping center in the Roseland neighborhood of Santa Rosa.
As with the other recent case from Emeryville, the case turned in part on whether AB 1484, a 2012 law which eliminated re-entry agreements, should somehow be used to invalidate reentry agreements made before the law took effect. In addition, DOF made a series of narrow legal arguments that the Third District did not buy.
In an important victory for local governments, the Third District Court of Appeal has ruled that the state Department of Finance improperly rejected Emeryville’s action to re-enter into several redevelopment agreements with its successor agency.
The case is perhaps the first big win in the post-redevelopment era for local governments, which have battled DOF daily since the elimination of redevelopment three years ago.
The Fitch Ratings service on May 1 announced it was ready to take a sunnier view of tax allocation bonds (TABs) administered by successor agencies in California's redevelopment dissolution. The changed view could affect both the sale prices of existing bonds and the interest rates available to successor agencies when they refinance their existing debt with refunding bonds.
Redevelopment reform has been gridlocked in the state capital for two years, but Governor Jerry Brown issued new clues on where he's heading in the state budget that was released in January.
The holiday season continues to be a cruel time of year for California's redevelopment community. Last year, the state Supreme Court struck a blow on Dec. 29, allowing the state to abolish redevelopment agencies. And this year, on Dec. 18, the state Department of Finance denied funding to many of the 240 of the 400 successor agencies who had appealed earlier rejections.
When Jerry Brown first proposed killing redevelopment -- back in January 2011, when he released his first budget -- he said he would replace it with some other economic development tool. After Brown succeeded -- when he released his second budget, in January 2012, just days after the Supreme Court killed redevelopment – his tune changed, ever so slightly. He said he would consider bringing redevelopment back if it didn't affect the state's general fund.
Over the past year, even the most irate objectors to Gov. Jerry Brown's dismantling of redevelopment held out hope that in agreeing to kill redevelopment, the legislature would invent a new, better system for stoking local economic growth. Last week, the governor dashed those hopes.
When voters in Orange County approved the creation of the 1,300-acre Orange County Great Park out of the shuttered Marine Corps Air Station El Toro, they had every reason to believe the estimated $1.2 billion cost would come, partially, from redevelopment monies. Such was the status quo in 2002.
At times, city officials in California couldn’t be blamed for wanting to revert to bygone times, such as, perhaps, 14th century Italy. City-states would be one solution to what seems to be persistent rancor between Sacramento and cities. At the heart of that fray lies the League of California Cities, whose mission is to lobby for the diverse interest of the state’s 600-plus cities.