Connect with CP&DR

facebook twitter

Follow us on Facebook and Twitter

RDAs Try To Push Stay of Execution Past February 1, But Don't Know Which Projects Will Be Killed

Bill Fulton on
Jan 5, 2012

Cities and redevelopment agencies are pushing for legislation that give them a stay of execution past the February 1 deadline contained in last week's Supreme Court ruling.

In last week's ruling, the court pushed the date for dissolution of redevelopment agencies back from October 1, 2011 the date originally set by the legislature to February 1, 2012. The redevelopment establishment is planning to push for compromise legislation to allow agencies to stay in existence but first they have to push the February 1 date back.

Meanwhile, agencies around the state are assessing the prospective damage.  City officials up and down the state have been wringing their hands over the death of redevelopment projects. The highest-profile projects are sports stadiums. The new Chargers stadium in San Diego would appear to be dead for now. The ruling also places a cloud over stadium plans in Santa Clara and San Jose for the 49ers and the A's. Ironically, the ruling might actually help Los Angeles's efforts to lure an NFL team, because the deal between the city and AEG doesn't include a traditional redevelopment component. All these moving parts might actually encourage the Chargers to move from San Diego to Los Angeles sooner ratherthan later.

The biggest issue, as Ryan Lillis pointed out in the Sacramento Bee this morning, is which projects will be permitted to go forward and which ones won't. Dozens of cities maybe hundreds devoted last summer to earmarked future tax-increment funds to projects in hopes of protecting the money. For example, last summer Santa Monica committed $267 million in future tax-increment funds to city  projects, mostly affordable housing, Civic Center improvements, and the "Palisades Garden Walk" park across the street from City Hall.

Lillis uses the specific example of the K Street Mall in Downtown Sacramento. Redevelopment planning of the 700 block is far along and the city is hopeful that the project will stick. But the plan for the 800 block is more questionable. The city committed $20 million last summer to a deal with developer David Taylor -- but it remains to be seen whether that's a legal obligation.

That's a good example of how it's not clear yet what types of legal obligations will be honored under the post-redevelopment system. Clearly, tax-increment money will be used to pay off all outstanding debt. But what about contractual agreements between RDAs and developers that commit future tax-increment flow? Those decisions, as we reported on Friday, will be up to some combination of the county auditors, the Oversight Committees, and the state Department of Finance.