This could become a year of creative financing, and not merely for the state government. Lawmakers are considering at least three bills that could change the rules for financing local infrastructure.
The most recently introduced bill, AB 1836 (Feuer), has the potential to be the most controversial. It would eliminate the requirement that two-thirds of voters approve the formation of an infrastructure financing district (IFD) and the issuing of bonds. Instead, the bill would permit the local City Council or Board of Supervisors to create the district, adopt a financing plan and issue bonds for which the district is liable. Much like a redevelopment project, an IFD can divert property tax increment for up to 30 years to pay for public works and replacement housing. Unlike a redevelopment project, an IFD may be created regardless of blight.
The other two bills remain from 2007 but appear to be very much alive. One bill is SB 934 (Lowenthal), which would permit the creation of up to 100 "housing and infrastructure zones" to be financed with property tax increment. The money would pay for infrastructure that supports infill development and for new housing. The other measure is AB 1221 (Ma), which would allow local officials to dedicate property tax increment to pay off bonds for infrastructure within transit village development districts. The Assembly passed AB 1221 last year before the measure stalled in the Senate Local Government Committee.
While Gov. Jerry Brown's veto of redevelopment-related bills and the earlier failure of parking reform bill Assembly Bill 904 caused some consternation around the state, he did in fact sign a wide array of bills relating to land use at the end of last month.
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.
Gov. Jerry Brown considered over 600 bills that came to his desk this legislative session. Some of the most contentious involved land use, particularly bills concerning redevelopment and the California Environmental Quality Act. The City of Los Angeles got a CEQA exemption for its proposed football stadium and infill developments have received special dispensation; speculation is that other such exemptions may be on the horizon.
Even with the preoccupation over the state budget--and especially the fate of redevelopment--Sacramento lawmakers have managed to advance a typically broad array of bills related to land use.
Several of those bills focus on redevelopment reform, most notably Sen. Alan Lowenthal's SB 450, which seeks to preserve funds for affordable housing, and Sen. Rod Wright's SB 286, aimed at comprehensive reform -- but not elimination -- of the state's redevelopment system. Both bills have the support of the League of California Cities and the California Redevelopment Association.
For all of the Legislature's fretting this year, the consensus in Sacramento is that among the state's overwhelming crises, land use ranked as a low priority this past legislative session. The legislative session that ended Aug. 30 included relatively few land use bills and, of those, they were of relatively minor import.
This month's legislative session, which concludes August 31, includes no game changers like SB 375, but it does include a few bills related to land use and redevelopment that bear watching.
Los Angeles Stadium CEQA Exemption
Over 100 organizations have signed on to a statement circulated by the Planning and Conservation League opposing a CEQA exemption for the development of a would-be NFL football stadium in downtown Los Angeles. The concerns have arisen in part because of an exemption granted to Majestic Realty in 2009 for its proposed stadium in the City of Industry and because of Gov. Arnold Schwarzenegger's stated desire to grant exemptions to certain projects in the name of economic development.
Three bills that would have established "green" building standards for housing, commercial structures and state government buildings were vetoed by Gov. Arnold Schwarzenegger. The governor also vetoed a controversial planning bill that would have limited cities' ability to satisfy regional fair-share mandates with non-residentially zoned properties.
Gov. Jerry Brown's proposed state budget will do more than merely plug a $24 billion deficit. According to some, it will also lead to shuttered factories, recidivism among ex-convicts, and the flight of companies and jobs to rival states such as Arizona, Nevada, and Texas. Faltering clothing manufacturer American Apparel could be pushed closer to the brink of bankruptcy.
At least if Brown's proposal to do away with Enterprise Zones is adopted along with the proposed elimination of the redevelopment program.
Urgency legislation extending the life of all subdivision maps by one year has been signed by Gov. Schwarzenegger. The California Building Industry Association (CBIA) praised the governor for signing SB 1185 (Lowenthal). The real estate slowdown has prevented developers from following through with approved projects, and the legislation ensures developers and landowners do not have to go through the entitlement process a second time.
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.