Towards the waning moments of yesterday's UCLA Extension Land Use Law and Planning Conference in downtown Los Angeles, I was on the verge of deploying the following tweet via @Cal_Plan :  "Ucla Land Use Law Conf: am in a roomful of lawyers and all seem in accord: no one has voiced support for death of #redevelopment" I'm not even sure if Twitterese would have fully conveyed the seeming irony. In session after session, lawyers -- they of eternal contentiousness -- on the dais and in the audience alike bemoaned nearly everything about the death of redevelopment, decrying its very fact and, moreover, the sloppy -- and, indeed, inadvertent -- method by which the Legislature and governor sealed its fate. The closest anyone came to celebrating the implementation of Assembly Bill X1 26 was when they spoke of the chance for reform.  Even the redevelopment panel itself, featuring Housing Finance Agency executive director Claudia Cappio, former CRA/LA head Cecilia Estolano, attorney Iris Yang, and Fullerton community development director Al Zelinka was a strangely harmonious affair, full of the usual criticisms and of some compelling ideas for the future but with little actual debate. In truth, I think everyone is worn out -- and it was only Day Three since dissolution officially set in. In any event, if we ever sort this out, it would seem that sustainability and economic development are in and blight is out (legally, if not practically). I'm glad I didn't tweet too soon. During Q&A, Frank Gruber, an attorney and journalist based in Santa Monica, addressed the panel with, shall we say, a contrarian viewpoint. It's worth it just to quote him verbatim:  "I don't want to sound ungrateful for a great panel, but it does seem that it would have been good for this panel to have someone who is not mourning the demise of redevelopment. For a lot of us redevelopment was not a solution to a problem." "I never heard of a CRA that ever bothered with...metrics about creating middle class people. When (a panelist) said that we need government that is clear and explanation, CRA was the exact opposite. It was the kind of thing that made people suspicious of government because they just saw all this money being skimmed off and given to developers. Middle class people leave cities. They've left cities for 50-plus years because of the schools. Did the CRA ever do anything for the schools?  I remember being at a conference in 2003 when all of a sudden somebody from CRA said, 'yes, we're now working with the school district'--given that they raised $14 B in bond money." "When you think of all the irrationality that this kind of funding brought, and of course stealing the money from the county and school districts. there's nothing to stop the Legislature in Sacramento from saying…'we want 5% of all tax increment around the state to go into affordable housing,' rather than just take back the 20 percent that you were going to steal. They can do that. They can enact all sorts of funding with a rational basis for where the money comes from. All these cities are now going to get more general fund money; they can decide what they want to do with it. There's no reason to mourn redevelopment." "Jerry Brown: What a great guy. To have been a city guy and used it and realized how corruptible it was and to get rid of it." After some hemming and hawing by the panel – who reiterated hopes for a renewed, reformed system of redevelopment – Joel Rosen, community development director, City of Buena Park, offered a rebuttal to Gruber:  "I am mourning the loss of redevelopment. Redevelopment was transformation for our community, and it was transformative for many communities across the state. Were there abuses? No question. But this was a money grab. This was not about redevelopment." "I would propose something more radical: it's not about finance structure; it's about governance structure.  We need to reform governance in California. We have too many school districts, too many special districts, too many overlapping jurisdictions. There's probably a lot of money in the system."   "I would argue that redevelopment was an incredible tool for 50 years. I am mourning its loss. I am mourning the loss of friends who are losing their jobs." Ashes to ashes, dust to dust.

This week, as redevelopment agencies were shutting down in observance of yesterday's dissolution deadline, the State Senate approved a bill that would preserve former redevelopment funds that had been dedicated to the provision of affordable housing for low- and moderate-income residents. Senate Bill 654, sponsored by Sen. Darrell Steinberg (D-Sacramento), passed on a vote of 34-1. It now advances to the Assembly Housing and Community Development Committee and then to the Assembly Appropriations Committee. The bill would preserve an estimated $1.36 billion currently in the coffers of former redevelopment agencies (now successor agencies) that were earmarked for affordable housing. Municipal and county housing authorities or other approved entities can receive the funds from their respective successor agencies. Without passage of the bill, those monies would go back to the state and localities would lose what many consider to be a crucial source of subsidy for the development of affordable housing.  While housing advocates and many lawmakers have hailed the vote, they have expressed frustration that Senate Republicans refused to support the bill as an urgency measure. Therefore, rather than take effect upon the governor's signing, SB 654 would not take effect until Jan. 1, 2013. Democrats had refused to support a version of the bill that included some measures to streamline the process of dissolving RDAs.  Amid partisan tit-for-tat, Steinberg complained that the lack of an urgency measure could cost over 20,000 jobs related to affordable housing. Senate Republican leader Bob Huff (Diamond Bar) noted that it was Democrats, led by Gov. Jerry Brown, who pushed for the elimination of redevelopment in the first place. Many supporters of redevelopment have claimed that it maintained and created countless jobs throughout the state.  Steinberg has said that he may try to re-insert language that would implement SB 654 immediately upon signing.

Today ostensibly marks the end of redevelopment in California, when no new projects may begin and no new agreements may be forged. But that's how it's been for nearly a year, ever since Gov. Jerry Brown announced his intent to do away with redevelopment and made repeated assurances that the state would not allow agencies to shield assets or rush into agreements before his proposed deadline. Since then, agencies have been quivering, hoping for a reprieve but doing very little by way of redevelopment.  By turning themselves over to successor agencies today, redevelopment agencies essentially become accounting firms: poring over their books, figuring out their assets and liabilities, and submitting to the approval of oversight boards -- one seven-member committee for every defunct RDA -- to ensure that funds are disbursed to either the state or to legitimate creditors.  "It's a new tack on February 1," said Jean Hurst, lobbyist with the California State Association of Counties. "Instead of planning for projects and executing projects, it's going to be more, ‘Let's figure out where we are financially. Let's figure out what our debts and contracts are.'"   Redevelopment agencies are, therefore, not going to disappear overnight.  "I think the keys will still work and the computers will turn on," said Hurst.  Though the transformation will take place largely on paper, is not expected to be easy.  Assembly Bill X1 26 enumerates the roles and obligations of successor agencies, oversight boards, and other entities involved with the dissolution of RDAs. Since Dec. 27, a host of entities has been rushing to interpret the regulations outlined in AB X1 26 and turn them into actionable items. The state Department of Finance, State Controller, CSAC, and California Redevelopment Association have all published interpretations of what AB X1 26 means for successor agencies as of Feb. 1. Those discussions have, many say, been fruitful.  "I think it's fair to say that we were a little caught off-guard by the case and by the timeframe that we had to figure out what our role is," said Jean Hurst, lobbyist for CSAC. Counties are, in many ways, on the front lines of the dissolution. It is up to each county assessor-controller to scrutinize redevelopment agencies' books and help determine how to allocate their former tax increment funds.  "The hardest part of this whole thing is going to be the flow of revenues from the counties to the successor agencies to make sure we get that right," said Marty Coren, a consultant who is chairing one of the CRA's technical advisory committees. "There's a lot of ambiguity so we're trying to figure out common-sense approaches to make it work."  Coren said that determining the dissolution process has required an uncommon amount of collaboration among state and local entities. The goal, he said, has been to come to a common understanding of what the law requires so that once it goes into effect all parties at least have a baseline set of principles from which to operate.   "We had some areas of disagreements," said Coren. "It's not either side is right or wrong, but there are different ways to interpret things."  Coren said that one of the most puzzling questions from AB X1 26 concerns the definition of a "special district" for the purposes of forming oversight committees. The law does not indicate whether it refers to special districts that are dependent on or independent of other jurisdictions.  By May 1, oversight committees are to be formed to govern the successor agencies. The legislation dictates that each oversight committee consists of seven members. Those seven members are appointed by: the mayor of the local jurisdiction, the county board of supervisors (two members, one of whom must be a member of the public), the largest special district with an interest in the RDA area, county supervisor or board of education, the chancellor of the California Community Colleges, and a member of the RDA's former association of employees. Despite the specificity of the recipe for constituting an oversight committee -- and of the centrality of oversight committees to the dissolution process and the accurate disbursement of funds -- AB X1 26 does not actually indicate how they are to be formed.  Successor agencies may thus have to lobby for the formation of their own oversight committees.  "There's no guidance in the legislation," said Coren. "But what we're telling our clients is that as a successor agency go ahead and contact the county and school board and call a meeting and that will get it started."   Some are anxious that oversight committees will have the expertise needed to parse the finances of redevelopment agencies, with operate differently from almost all other public entities.  "Up until now RDA's were responsible for tax-sharing agreements…a lot of counties did not get involved with that," said Coren. "Now, overnight committees are going to have responsibility for 100 or more tax-sharing agreements and they're not set up to do that."  Hurst noted, though, that county assessor-controllers have experience from their involvement with the ERAF payments of previous years. They will, however, now have a massive addition to their workload.  "Los Angeles County has 71 redevelopment agencies, so it's going to be an issue," said Hurst. "We don't have the ability to decline the responsibility, so we have to make it work." Brent Hawkins, an attorney who has represented the League of California Cities on redevelopment matters, is similarly pessimistic about Los Angeles County's ability to handle the workload.  "The task of inventorying all of those agencies and getting it done by sometime this summer, while taking care of everything else they're supposed to be taking care of—I don't know how they're going to do it," said Hawkins. Hawkins added that he was also concerned that county staff in rural counties with few RDAs may not have the requisite experience. He said that the state was unlikely to provide meaningful assistance because "The state doesn't have any expertise; redevelopment is a local program."   Making it work, according to Coren, entails a tremendous amount of collaboration, even though different entities may have different feelings about the demise of redevelopment. Cities have deplored it, while counties, which may reap more in property taxes, have not been so opposed.  "The best thing we can have going forward is to work cooperatively with the counties and the other taxing entities," said Coren. "There's a loss of a sense of entitlement by some of the cities. We've got to overcome that and make the best of what's being presented." Others are not so optimistic. "I think this is going to be a slow-motion train wreck," said Hawkins. "Some people think the sun isn't going to rise tomorrow. I don't think that's going to be the case."

The California Supreme Court's decision to strike down AB X1 27 and uphold AB X1 26 set off a frantic timeline by which redevelopment agencies essentially must preside over their own funerals while "successor agencies" take control of their assets and contracts. Since the Dec. 29 court decision, at least one legislative effort -- Senate Bill 659 -- and two lawsuits have tried to delay dissolution, but to no avail. As such, the following timeline and benchmarks will govern the closure of redevelopemnt agencies and the ascent of successor agencies and their oversight boards for as long as is required to liquidate agencies' assets, tend to legal matters, and pay off their debts.    January 13 Counties that do not wish to serve as "successor agencies" and instead want to pass those duties on to the state must notify the County Auditor-Controller.  February 1 Redevelopment agencies are officially dissolved.  Successor agencies have the option of retaining RDAs' affordable housing functions or passing those functions off to local housing authorities or, in some cases, to the State Housing Authority.  Each successor agency must review its respective RDA's interim enforceable obligation payment schedule (EOPS), which outline the RDA's contracts and obligations. Successor agencies may modify their EOPS and may thereafter only make payments outlined in the EOPS.  March 1  Each successor agency must adopt a permanent Recognized Obligation Payment Schedule (ROPS), which succeeds the EOPS. Each County Auditor-Controller will allocate property tax increment to pay obligations enumerated in the ROPS.  April 1 Successor agencies report to the state on whether the amount of tax increment identified by the County Auditor-Controller is sufficient to fund ROPS obligations for the next six-month fiscal period.  April 15 Successor agencies submit their respective ROPSs to the State Dept. of Finance and State Controller for approval.   May 1 Oversight boards are formed and must file membership with the Dept. of Finance. Successor agencies henceforth must pay obligations in the approved ROPS; no other obligations may be paid.  May 16 and onward County Auditor-Controllers transfer funds to the successor agencies' Redevelopment Obligation Retirement Fund for payment of obligations described in the ROPS.

Among the roughly 400 redevelopment agencies that will shut down tomorrow, the vast majority have effectively elected to dig their own graves. That was one of the stipulations of AB X1 26, that cities may serve as their own successor agencies, which will oversee the wind-down of operations, liquidation of assets, and payment of outstanding obligations.  At least a handful of cities, however, have indicated that they want no part in what many consider an unfortunate process. The Los Angeles City Council very publicly voted not to serve as successor agency for the Los Angeles Community Redevelopment Agency . That vote was based in part on a city report that indicated that overseeing the shutdown of the state's largest RDA could cost the city up to $130 million -- more, by far, than the entire annual budgets of many redevelopment agencies.  In addition, the cities of Los Banos, Merced, Pismo Beach, Riverbank, and Waterford have all taken similar action as of last week. If a city opts out, then any other taxing entity that is affected by a city's redevelopment tax increment can volunteer to be successor agency. Most likely, this entity would be the county, but it could also be a school district or other special district. Thus far, no such entities have volunteered to take over. As such, the state Department of Finance will appoint an oversight board for each agency so abandoned.  Of the cities that have opted out, some were simply indifferent to the whole process.  "We didn't see a lot of benefit to the city to being the successor agency," said Riverbank city manager Pam Carder. "I know that we would get a little bit of money for administration, but the amount of work that was required for that money we just didn't see any benefit." The city councils of Pismo Beach and Bishop felt similarly.  "We have no blight and we have no bonded indebtedness," said Pismo Beach mayor Shelly Higginbotham. "It would become much more expensive for the city to take on that duty." Bishop assistant city clerk Denise Gillespie said that the city's redevelopment agency had been essentially dormant for over ten years and had "zero money;" it was dissolved Jan. 9.  Carder said that serving as successor agency would not save anyone's job either, since the city does not employ full-time redevelopment staff people. "It didn't affect our budget because we have no staff people that are being paid for out of redevelopment," said Carder.  The City of Merced, however, had deeper concerns.  "We felt that there was not enough clarity in the legislation to hold the successor agency harmless," said Merced city manager John Bramble. Bramble noted that, in part because AB X1 26 was passed hastily last year, legislators may have inadvertently left out language that legally protects cities that serve as successor agencies. "The Legislature cannot go backwards and determine what their legislation intent was.  Both AB 26 and AB 27 were approved at the end of the session…we found nothing that there was no liability to being successor agency."  Bramble said that the city, which has been famously devastated by the recession and housing collapse, did not have the financial resources to defend against litigation that could arise in the course of dissolution. Being held liable, he said, would be even worse. So the city was happy to shift both the burden of dissolution and the associated legal responsibilities to a successor agency.  Bramble said that, as in Los Angeles, Merced's City Council was also concerned about the cost of dissolving the RDA. Although AB X1 26 provides for some administrative costs, Bramble said "the amount of funds that are available to unwind the RDA assets does not even come close to what we have in terms of staff resources or cost" and that Merced's full-time city is obligated to the City Council, not to a potentially all-consuming special project.  Merced's approach does not, however, mean that it isn't reasonable for hundreds of other cities to accept the burden of serving as successor agencies. In many cases, creating a successor agency temporarily salvages the jobs of at least some RDA employees. As well, cities have an interest in making sure that successor agencies use a light touch when liquidating assets.  "There's always the desire to maintain control," said Bramble. "If they have a project that isn't quite finished and they're not quite sure where it stands, they're going to want to make sure it's done right."  Many cities, however, may not have made such measured calculations. Cities had only two weeks to decide on whether to serve as successor agencies, and those that may not have been certain were automatically opted-in under AB X1 26. By contrast, cities like Los Angeles and Merced took pains to understand what that choice entailed.  "We dropped everything for the next two weeks," said Bramble. "I involved city attorney, the finance office, my office, and economic development and RDA staff to go through absolutely everything." With that decision made, it is now up to the state to assign three-member oversight boards that will serve as successor agencies, unless any other taxing entity shows interest by Feb. 1. In some cases, relatively obscure taxing entities could have stepped up if they so chose. "If a city declines, then it's up to one of the other taxing entities to decide whether they want to become the successor agency, and if none of them step into that, then it goes to the state," said Jim Kennedy, interim executive director of the California Redevelopment Association.  For instance, the Merced Redevelopment Agency could, potentially, be succeeded by the Merced County Mosquito Abatement District. Not that it would choose to take on that task.  "There's not a lot of rewards to being a successor agency," said Marty Coren, a consultant and head of a California Redevelopment Association committee that is studying the RDA transition.  UPDATE:  The morning of Feb. 1 Gov. Brown named twelve individuals to serve on four governing boards--one for each county with cities that opted out--responsible for dissolving local redevelopment agencies. The governing boards' rosters can be found here , on Gov. Brown's website.

UPDATE: Friday afternoon Superior Court Judge Lloyd G. Connelly refused to grant a stay against the dissolution of redevelopment, rejecting arguments advanced in two separate suits, led by the cities of Cerritos and Carlsbad. The ruling means that the dissolution of redevelopment will proceed Feb. 1 as ordered by the state Supreme Court. With seven days to go before redevelopment agencies vanish from California's landscape, two consortiums of cities are sending up two different hail Marys in the hopes that the Sacramento Superior Court will give redevelopment a stay of execution -- or even wholesale salvation.  Friday afternoon, the court will hold preliminary hearings on both suits. The first, filed by a consortium of cities led by the City of Cerritos, seeks to overturn Assembly Bill X1 26 on constitutional grounds. It had originally been brought by the cities before the state Supreme Court rendered its decision in California Redevelopment Association vs. Matosantos but was put on hold while that case was decided.  The other, unrelated, suit was filed by a consortium of cities led by the City of Carlsbad following the Matosantos decision. It alleges that AB X1 26 can only be valid if its companion budget bill, AB X1 27, were enacted. But, because AB X1 27 was struck down by the Supreme Court, plaintiffs in the Carlsbad case contend that AB X1 26 can never go into effect.  Both suits--either of which, if successful, could delay or prevent implementation of AB X1 26, regardless of the other's success -- pursue different legal approaches than the CRA did in the Matosantos case. CRA focused largely on Proposition 22, which, it contended, prohibited the state from appropriating redevelopment funds and, by extension, from dissolving agencies.  "We raised constitutional challenges that were in addition to the primary focus of the lawsuit brought by CRA and League," said Bill Irkhe, partner at the law firm of Rutan and Tucker, which is representing the City of Cerritos.  "Per the request of the attorney general's office, we stipulated to holding this case off until the League and CRA case would be decided." The Cerritos suit centers on three main claims. The first is that AB X1 26, which was passed by a simple majority, effectively redefines redevelopment's tax increment as an ad valorum property tax -- thus fundamentally changing the nature of the tax. That sort of change, plaintiffs argue, would require a two-thirds majority vote in the Legislature. Second, plaintiffs argue that AB X1 26 results in violations of federal and state contract law by impairing or invalidating contracts between redevelopment agencies and their respective cities. Third, plaintiffs claim that Gov. Jerry Brown's and the Legislature's efforts to go after redevelopment funds overstepped their bounds by responding to a short-term budget emergency with a remedy whose effects may last for 30 years, which is the lifespan of a redevelopment project area.  Irkhe said he believes that these arguments may have sway in part because, according to a footnote in its decision, the Supreme Court explicitly did not consider this line of argument in deciding Matosantos . Therefore, the Superior Court may consider it an open legal question and therefore grant the injunction that plaintiffs are seeking.  Plaintiffs in the Carlsbad case -- which names the state and five counties' auditor-controllers as defendants -- contends not that AB X1 26 is invalid but rather that it cannot be enacted until AB X1 27 is enacted. The Carlsbad suit alleges that the enactment of AB X1 26 is contingent upon the enactment of AB X1 27, in part because the Legislature intended the two laws to work in concert. Carlsbad city attorney Ron Ball said that AB X1 26 depended on the enactment of AB X1 27 -- which occurred -- and on the inclusion of Part 1.9, which is the part of AB 1X 27 that calls for redevelopment agencies to make voluntary payments to the state.  "The whole law was determined to become unconstitutional, so Part 1.9 never arose," said Ball. "So how could the law become effective? There were two contingencies, one of them it made, and one failed."  "The state's position is contrary," said Ball. "They feel that either the law was not void ab initio, or else it was valid for a while before the Supreme Court turned it down."   Plaintiffs' argument, according to Ball, differs from the "severability" argument that arose in Matosantos, in which attorneys for the state successfully argued that the Supreme Court could invalidate one of the laws without invalidating the other.  "We learned more about severability than I ever wanted to know," said Ball. "That's fine. But it didn't answer this question." Ball said that there is a chance that the judge could rule from the bench in favor of the plaintiffs, thus effectively halting dissolution. However, he said it is more likely that the judge rule that the preliminary injunction is either granted or denied.  Neither groups of plaintiffs are collaborating directly with the CRA or League of California Cities, which were the lead plaintiffs in the Matosantos case.  Both cases are scheduled to be heard 1:30pm in Sacramento Superior Court.

This week Gov. Jerry Brown announced a draft package of reforms to the California Environmental Quality Act. The reforms are intended to streamline and simplify certain types of urban developments in order to reduce costs and hardship for developers who are pursuing environmentally friendly infill projects.  The reforms, drafted by the Office of Planning and Research, come in accordance with Senate Bill 226 and Assembly Bill 900, both of which were signed into law late last year.  Once these draft reforms are finalized, they will simplify the approval process for infill projects by eliminating repetitive studies of environmental effects already addressed in other planning documents, such as general plans and zoning codes. This will help reduce the time and cost often associated with infill projects, while also allowing cities to focus on new or unique projects that help create jobs, revitalize cities and promote transit. SB 226 also exempts solar projects located on existing rooftops and parking lots. AB 900 sends CEQA litigation for certain large projects directly to the Court of Appeal and requires a decision on the merits in a short timeframe. The law also offers immediate help to projects that provide California with the most economic and environmental benefit. Together, CEQA reforms in SB 226 and AB 900 are intended to reduce repetitive documentation and expedite litigation timelines while preserving informed decision-making and mitigation of environmental harm.  OPR's SB 226 guidelines can be found here ; the Natural Resources Agency's SB 226 guidelines can be found here . The AB 900 guidelines, released last month, can be found here .

Despite intense lobbying from supporters of redevelopment, Senate Bill 659, sponsored by Sen. Alex Padilla (D-Los Angeles) appears headed for defeat. Senate President Pro Tem Darrel Steinberg (D-Sacramento) yesterday told the Sacramento Bee , "It's not going to happen."  The bill would have delayed dissolution until April 15, allowing agencies and cities more time to organize their affairs. Steinberg said that the bill does not have enough support and that it would likely not even come up for a vote. Many have complained that the Feb. 1 deadline imposed by the Dec. 29 Supreme Court ruling has come far too quickly and that dissolution will not be a smooth process.  Meanwhile, Gov. Jerry Brown has said, "I don't think we should delay this funeral," referring to the demise of redevelopment. Without the governor's support, SB 659 was largely a moot point. Some are speculating that Brown intends to support a new version of redevelopment but that he wants to wipe away the old system so that lawmakers can fashion a new, reformed system from scratch.

With only a few days to go before the February 1 deadline to dissolve the state's redevelopment agencies, the Department of Finance has published a website describing the dissolution process as mandated by Assembly Bill X1 26. The site is intended to answer a host of questions that have arisen among many agencies and cities throughout the state.  Agencies and cities are cautioned that the website and its documents are meant for guidance only and do not constitute legal advice. Finance acknowledges that "the timeframes for dissolution activities may become very compressed" -- as many supporters of redevelopment have claimed -- and that the department cannot name specific individuals who will be working on dissolution nor can it promise that cities will be able to discuss the dissolution process with particular staff members. The department has, however, set up a hotline and an email address: redevelopment_administration@dof.ca.gov and 916.445.1546. Finance encourages redevelopment agencies and their successors to immediately begin work on Recognized Obligation Payment Schedules (ROPS) and in organizing the oversight board. Both Controller and Finance staff will be reviewing enforceable obligation schedules and jointly determining which items to review in more detail and make objections to. Finance has also released a pair of "frequently asked question" documents. One document answers questions about bond repayments  <.pdf> , in response to concerns that the California Redevelopment Association and others had raised about whether the schedule outlined in AB X1 26 would enable successor agencies to pay bond obligations on time. DOF assures agencies that the legislation does provide for on-time payments.  Another FAQ  <.pdf> concerns the structure of successor agencies and their relationship with their respective jurisdictions, especially with regards to labor regulations. Many cities are concerned that the dissolution of redevelopment agencies means that city staff who are paid partially with RDA money will have to be let go. DOF confirms that successor agencies may release superfluous employees. Any employees that are retained become employees of the successor agency but not of the city or county.

Last week bond rating agency Moody's took California's redevelopment bonds down a notch , and today fellow rating agency Fitch is expressing similiar concerns.  Citing concerns over the "short timeframe" that last month's Supreme Court decision dictated for the dissolution of the state's roughly 400 active redevelopment agencies, Fitch has placed all bonds secured by tax increment financing on Rating Watch Negative. Fitch is also concerned by the lack of progress in shoring up what redevelopment's supporters consider flaws and shortcomings in AB X1 26, the legislation that mandates and guides the process for agencies' dissolution. February 1 is the date on which agencies are supposed to be turned over to successor agencies.  According to a statement  <.pdf> released by Fitch, "While the intent to uphold existing obligations is clearly stated in the legislation, the mechanics of implementation are not." To determine whether or not outstanding bonds will be repaid, Fitch intends to review the process of handing off RDA assets and obligations to successor agencies and will review each agency's and oversight committee's ability to mange those assets and obligations.  Fitch's review will include the following: Once available, Fitch will review the guidelines and discuss with the appropriate county auditor-controllers their plans to adhere to guidelines that are being drafted by the California Association of Counties (CSAC). Fitch will assess whether each county auditor-controller, successor agency, and board is planning to track tax increment revenue generated by project area and for housing and non-housing purposes, pursuant to the pledges to bondholders, and whether each of these entities is prepared to apply procedures in a way that assures the flow of tax increment revenue pledged to secure each series of bonds. Fitch will evaluate whether the guidelines or subsequent legislation, if any, address the concern that the payment schedule is funded on a six month basis, rather than annually, which could result in funds being transferred to overlapping taxing entities prior to funding a full year of debt service. Fitch will confirm that Fitch-rated bonds are included on the schedule of payments permitted to be paid by the agency.  Fitch will evaluate the ability of a 'designated local authority' to staff and oversee a successor agency should no existing local entity elect to become the successor agency. While Fitch believes these uncertainties will be resolved for all or most affected entities, if any of these plans or procedures are inadequate to ensure timely payment of debt service, Fitch will take appropriate rating action on those individual credits.

If you listen carefully, you might be able to hear the sounds of hammers in some parts of California. After nearly five long years of recession and stagnation, recent reports indicate that new residential construction may be picking up.  A recent survey from the National Association of Homebuilders indicates that confidence among home builders has risen to its highest level in four years. Rising from nearly zero may not sound like much--the survey's overall rating of 25 still indicates that conditions are "poor"--but it's still an improvement. Construction in Los Angeles seems to bear out this trend, with $1.51 billion worth of projects--dominated by high-density rental apartments--underway in the second half of 2011; that's a 6% increase over the previous year. Meanwhile, home sales in the Bay Area rose 4.4% in December as compared with December 2010; prices, however, have continued to decline. In  Orange County , a developer has evoked headier times with the purchase of a 16-acre tract entitled for up to 143 home at an estimated $2 million per acre. And even in Sacramento , where construction of single-family homes hit a near standstill, the Sacramento Bee reports that a "modest building boom" of six projects is bringing over 250 units to high-density areas of the state's capital.  Clearly, this trend doesn't yet mean that a million tract homes will bloom. But it does mean that developers may be emboldened to restart dormant projects and even seek out new ones. In many cities, there are far fewer planners now than there were when the bubble first burst, but they now might have more work to do than they've had in a long time.

Judging by the likes of Apple, Google, and Chez Panisse – to say nothing of the relative stability of housing prices -- the San Francisco Bay Area might not seem like the most likely recipient of an economic planning grant. But the federal Department of Housing and Community Development thinks otherwise. Following a hotly competitive application process, HUD awarded the Metropolitan Transportation Commission, in partnership with the Association of Bay Area Governments, one of 22 Sustainable Communities Grants in late November. MTC's award of $4,991,336 is, by less than $10,000, the second-largest such grant that HUD awarded nationwide; the 22 grants totaled nearly $96 million. MTC will focus on a "prosperity plan" for the region. According to a statement supplied by HUD's San Francisco office, MTC received the grant because its "plan incorporates a broad region made of numerous communities with a real need to connect housing to jobs, provide transportation options for families, and generate the economic growth they need to win the future." HUD also cited the plan's ability to create middle-income jobs. The Sustainable Communities grants are the brainchild of the Obama Administration -- designed to help communities and regions improve their economic competitiveness while also connecting housing with jobs, schools and transportation. On that count, say Bay Area planners, the region needs all the help it can get. "The Bay Area has the same number of jobs in 2010 as it did in 1990 and we are the second-most expensive region in the country," said Doug Johnson, senior transportation planner with MTC. "We're seeing potentially astronomical costs for our low-income residents." Those costs have risen, say some, because the benefits of the boom in Silicon Valley and in certain urban centers, such as the City of San Francisco, have not necessarily extended to the region as a whole. And there is no formal mechanism to ensure that all parts of the region share equally in its success. "We lack any sort of comprehensive regional economic development strategy," said Jeremy Madsen, Executive Director of the Greenbelt Alliance, one of several nonprofit organizations that is partnering with MTC and ABAG on the grant. "That has kind of taken care of itself, which is both a blessing and a curse.  We have not thought comprehensively about where jobs should be going."  MTC and ABAG's approach to its Sustainable Communities Grant is to interpret "sustainability" in the broadest sense to include not only the widely ecological benefits of, for instance, compact, transit-oriented development, but also the benefits of promoting economic development in concert with land use and transportation planning. The grant recipients say that this sort of planning is crucial in a region that is expected to grow by two million people by 2040. MTC and ABAG will use the funding, to be spent over three years, to develop and implement a Regional Prosperity Plan in conjunction with local partners. The two major, interconnected areas of work are what the agencies describe as "a community-rooted process" to develop and implement a regional Economic Opportunity Strategy to expand economic opportunities for low- and moderate-income residents; and the implementation of a Housing the Workforce strategy that would create and preserve housing affordable to low-income workers. "This plan is about implementing a long-term vision for a region to be more environmentally, economically, and socially stable and prosperous," said Johnson. These programs encompass pilot projects spread among 30 participating Bay Area jurisdictions and nonprofit partners. The pilot projects include workforce training or job placement program for low- and moderate-income workers in a particular industry of opportunity; the development of small business clusters in new industries; and creation of a database that would match up low-income residents with affordable transportation and housing options. To curb housing costs, Bay Area Planners will be using the grant money to implement housing that is not only affordable for low-income residents but is also in close proximity to job centers – thus reducing housing costs without imposing onerous transportation costs on those residents who can least afford them and without perpetuating what many planners consider inefficient growth patterns. "It's…intending to make a better economy by moving away from the old model of ‘live where you want and drive an hour to work,'" said Kevin Riley, director of Planning & Inspection for the City of Santa Clara. One of the great frustrations about land use planning—especially long-range regional planning exercises, such as the Sustainable Communities Strategies that are under consideration in the state's major metro areas—is that planners must abide by population projections and activity patterns over which they have no control. Indeed, the use of land is, in many ways, predicated on the economic conditions that compel people to live and work in certain places. "This particular economic development strategy is really looking at how do we associate jobs and transit better," said Jeremy Madsen, executive director of environmental group Greenbelt Alliance. "How do we get beyond the old-style auto-oriented business park and into something that is a little more sustainable and meeting the new paradigms around planning." Allen Fernandez Smith, executive director of housing advocacy group Urban Habitat, said that the grant participants will try to answer a number of questions in the course of implementing the pilot projects: "Where do we need to build new housing stock? How can we have an early warning system where there are cities that are losing their affordable housing and turning over to market-rate, thus displacing people? What are anti-displacement strategies that cities and counties can take on?" said Smith. Smith emphasized that the answers to each of these questions must be grounded in concern for social equity, "insuring that there is inclusion and access for all people throughout the region, especially those that are most marginalized or that have been left historically behind by policies that have been crafted to keep people out." For many, the displacement of low-income residents is one of the unfortunate components of a regional economy that is skewed towards high-income jobs and towards younger residents who are willing to pay a premium for urban living.  The notion of a region-wide effort to coordinate housing and transportation may sound familiar, since it is nearly identical to the mission of the Sustainable Communities Strategies mandated by Senate Bill 375. But whereas that law compels the state's metro regions to coordinate land use and transportation planning for the sake of reducing greenhouse gas emissions, the HUD grant does so for the purpose of economic vitality and social equity. ‘"Housing the Workforce' is about making sure we are setting up affordable housing so that this workforce that we're trying to cultivate…throughout the Bay have places to live that were close to work and close to transit," said Smith.  Planners hope that the work funded by the HUD grant will offer models for the realization of the Bay Area's SCS. Johnson noted that the Regional Housing Needs Assessment, which determines how many units of housing the SCS must take into account, is primarily a "technical exercise." The RHNA does not, however, tell jurisdictions where housing should be developed and how housing should relate to transportation networks. That is, say planners, where the HUD Sustainable Communities grant will complement the SB 375-mandated SCS. "We've always had the RHNA allocation, but it's not really been a comprehensive regional strategy for how we achieve our housing goals and housing needs," said Madsen. "With the Regional Transportation Plan process and SCS process we have a lot to deal with the general land use and transportation component of good regional planning, and this grant brings in more of the specific housing and economic development piece." While the notion of marrying land use planning with economic development may sound like a powerful notion, some are concerned that this approach may be too ambitious. "The challenge is simply that you have a lot of pieces moving at the same time," said Riley, of Santa Clara. "It's a good thing but it takes a lot of time." Nevertheless, Riley said that the grant, plus the SCS planning process, represents a step in the right direction for a region that was, not long ago, considered fragmented. "It means we are all becoming more regionally adept," said Riley. I would say up until the last decade it has been very parochial, that cities care only about what happens inside their borders." Contacts: Doug Johnson, Senior Transportation Planner, Metropolitan Transportation Commission, 510.817.5846 Jeremy Madsen, Executive Director, Greenbelt Alliance, 415.543.6771 Kevin Riley, Director of Planning & Inspection, City of Santa Clara, 408.615.2450 Allen Fernandez Smith, Executive Director, Urban Habitat, 510.839.9510