Riverside is slowly inching into implementation of a redevelopment project at the city’s western gateway. The city recently resolved litigation with Riverside County over the boundaries of the project area, and some small infrastructure projects are moving forward.

However, a lawsuit filed by a group of project area residents is pending. Until it is resolved, full implementation of the redevelopment plan must wait.

The fight over the La Sierra/Arlanza redevelopment project is a familiar one in California. City officials insist that redevelopment tools — chiefly, tax-increment financing — are necessary to improve a run-down area. Opponents counter that the area as a whole is neither blighted nor predominately urbanized, two requirements for creating a redevelopment project area.

“It’s been ignored almost completely since it came into the city,” Councilman Steve Adams said of the project area, much of which the city annexed during the mid-1960s. “It’s the lowest socioeconomic area of the city. It has the highest crime rate in the city.”

But a group called Rural Residents and Horse Owners of Riverside sued the city last year, shortly after adoption of the redevelopment plan. Rural Residents argues that the city is using redevelopment simply to maximize revenue.

“It’s not a physical or economic liability. There’s a lot of horse property there, and the city calls that blighted,” said C. Robert Ferguson, attorney for Rural Residents. “It’s a boondoggle.”

Ferguson likened Riverside’s project area to one in the City of Upland that an appellate court rejected three years ago. The court blocked Upland’s redevelopment project when the court ruled that a large project subarea was not “predominately urbanized.” The area in question had been used for a rock quarry, a garbage dump and a flood control siltation basin (Graber v. City of Upland, 99 Cal.App.4th 424; see CP&DR Legal Digest, August 2002).

Riverside treats the large-lot residential areas the same way Upland treated the gravel pit at the time, said Ferguson, a winning attorney in Graber. He recalled that Upland contended the old gravel pit would never be reused without redevelopment assistance. However, without redevelopment, the gravel pit is now a lake surrounded by upscale homes, he said.

Much of the area in the La Sierra/Arlanza project area is half-acre to 5-acre lots zoned “rural residential.” To Ferguson, that’s telling. “If it’s zoned rural, how can it be urban? That goes without saying,” he argued.

The county also questioned whether 80% of the project area is urbanized, the minimum required under state law. To settle the county’s litigation, the city in October removed about 1,300 acres from the project area. The detached area is mostly undeveloped; an upper-end housing development of nearly 600 units called Rancho La Sierra is proposed for the site, along with dedicated open space. The detachment still leaves approximately 8,000 acres (12 1/2 square miles) in the project area. The city estimates it will receive about $600 million in tax increment during the lifetime of the redevelopment project. La Sierra/Arlanza is the city’s seventh redevelopment project area.

Adams, who was not on the council when the city first drew up project area boundaries, conceded the city “took too big a bite” at first. The remaining territory belongs in a redevelopment project, he said.

Included in that territory is the Galleria at Tyler. Anchored by Nordstrom, Robinsons-May, Macy’s and JC Penney, the Galleria is the Inland Empire’s largest indoor shopping mall. The city, its redevelopment agency and mall owner General Growth have signed an agreement for publicly subsidized improvements at the mall, said redevelopment Project Manager Wendy Holland. However, those improvements are stalled as long as litigation is pending, she said.

Adams admitted that the redevelopment project needs the Galleria’s tax revenue. But, he said, the publicly subsidized improvements will strengthen the mall as a tax generator and employer. And, he quickly pointed out, the revenue will help the city improve the low-income housing that surrounds the mall.

The project area also encompasses the 73-acre Turner Riverwalk project, a residential and office project that AJ Turner is developing just off the 91 Freeway. Riverwalk’s small-lot housing units have nearly tripled in value since they were built two years ago, and development of the 1-million-square-foot office component is proceeding faster than expected. The city’s only contribution to Riverwalk development has been some road work, according to Adams.

“It’s been a great project that started the ball rolling in that area,” Adams said.

Redevelopment detractors point to Riverwalk and the mall as evidence that La Sierra/Arlanza is not blighted. “I guess Nordstrom is getting a little dirty,” Ferguson deadpanned.

Adams contended that only a handful of complainers are standing in the way of progress, and he said that many property owners and businesses see the value of redevelopment. Half of the project area lacks such basics as sidewalks, curbs, gutters and streetlights, he noted.

“Unless we take this action, it’s going to remain depressed. It’s going to be the dumping ground for every low-mod housing project,” argued Adams, whose ward includes La Sierra/Arlanza. Instead, the area should be a vital, western gateway to the city, he said.

To help assuage some opponents, the City Council earlier this year agreed not to use eminent domain to take owner-occupied single-family residences in the project area, and the council even added this provision to the redevelopment plan.

However, countered Ferguson, the city could change its mind on eminent domain in the future. And he questioned the purpose of installing sidewalks in a rural residential area with lots of horses.

No trial date for the lawsuit has been set yet.

Steve Adams, Riverside City Council, (951) 826-5991
Wendy Holland, Riverside Redevelopment Agency, (951) 826-5947.
C. Robert Ferguson, attorney for Rural Residents and Horse Owners of Riverside, (909) 482-0782.