Steinberg Predicts Passage of RDA Asset Bills
California Senate leader Darrell Steinberg has predicted that the Legislature will pass his post-redevelopment legislation – assuming the state revenues remain healthy.
Steinberg has introduced two bills – SB 1151 and SB 1156 – that would allow cities and other local agencies to form a new redevelopment entity with access to billions of dollars in former RDA assets, though not to the tax increment. Speaking to the Sacramento District Council of the Urban Land Institute on Tuesday, Steinberg said: “I don’t know what the May revision [of the state budget] is going to say about the state’s revenue. If May keeps us stable, then boom – aggressive all the way to the governor's desk and I think he would likely sign the bill. If however growth is slow, we’re going to have difficult decisions to make.”
Ever since redevelopment was dissolved on February 1, Steinberg has looked to former RDA assets as a possible way to continue redevelopment activities around the state. He claims that the RDAs went out of business with at least $2 billion in cash “in the bank,” not counting the $1.4 billion in unencumbered affordable housing funds that is the subject of separate legislation. He estimated the overall value of RDA assets – including real estate – at $10 billion.
SB 1151 would seek to avoid the widely-feared “fire sale” of RDA assets by requiring all successor agencies to prepare long-term asset management plans by the end of the year. The asset management plan is supposed to “outline a strategy for maximizing the long-term value of the real property and assets of the former redevelopment agency for ongoing economic development and housing functions.
SB 1156 permits a city and a county to create a “Community Development and Housing Joint Powers Authority” that would take over the role of the successor agency. The bill specifically calls out reduction of greenhouse gas emissions, infill development, and transit-oriented development as high-priority policy goals to be furthered by these new agencies.
Neither of the bills propose going back to the previous tax-increment system. But together, they are intended to give local communities an incentive to engage in long-term redevelopment activities, using RDA assets.
“My bill would say, 'let’s keep those assets in trust for former RDAs, for the cities and counties, and let’s allow the agencies to decide how to best use those assets so long as those uses are consistent with ED,'” Steinberg said. He acknowledged that, if state revenue continues to be sluggish, Gov. Jerry Brown and the Legislature could view RDA assets as a source of cash to balance the budget.
Speaking prior to Steinberg’s arrival, Sacramento City Manager John Shirey – the former executive director of the California Redevelopment Association – said Steinberg’s bills would not help his city much. “We don’t have any assets,” he said. “We practiced buying land, redeveloping it, and getting rid of it to put it back on the tax rolls. I’ve got probably 200 parcels of land that if you want to buy right now, we’ll sell it to you. If you want a little triangular piece that you’d be lucky to park your car on, we’ll sell it to you.”