Cities, counties look for way to replace billions in lost redevelopment dollars

Last year, California addressed its budget woes by dissolving nearly 400 redevelopment agencies in cities and counties throughout the state.

Local governments paid for infrastructure improvements and low-income housing by diverting property taxes that would otherwise go to school districts or public safety. The state wanted that revenue back for its own purposes.

On Monday, more than a year after dissolution, state lawmakers held a packed hearing at the Capitol on how the process is working out for the state and for local governments.

 
It’s not, said Andy Weissman, mayor of Culver City.
 
“We’ve got at least four projects that were in the pipeline when redevelopment was eliminated,” Weissman said. “We are here to let the committee know that the process currently in place will not enable those projects to move forward.”

Cities and counties throughout California are — like Culver City — fighting to retain funds for local improvements.  Fifty-three municipalities and other entities have sued the state over disagreements concerning the dissolution of the redevelopment agencies.

“Affordable housing programs across our state have in effect ground to a halt,” said  Chris McKenzie, executive director of the League of California Cities.  “We’ve seen also city budgets hurt very dramatically.”

McKenzie said he's now focused on finding a new way for cities and counties to attract private sector money to revitalize urban areas.  

That’s something Culver City Weissman would like to see.
 
“We’ve got a tool box with very few tools left in it,” Weissman said  “We’d be supportive of any efforts that came out of Sacramento that would allow us to manage the mandates that we’ve got to deal with — housing, infrastructure, blight.”  

Democratic leaders are trying to give municipal governments those new tools. Last year L.A. Assemblyman Bob Blumenfield (D-San Fernando Valley) co-authored a bill that would have made it easier for local governments to issue bonds for certain public works projects.  The Governor vetoed it, but also delivered a ray of hope.
 
“In his veto message, he was very clear, [saying] this is a good idea, but it’s time is not yet here,” said Blumenfield, “because he wants to get the money back from redevelopment.”

The Governor’s budget counts on recapturing $2.1 billion in redevelopment funds this fiscal year and $1.1 billion more next year. Blumenfield's bill has been resurrected and he believes it could succeed if Governor Brown is satisfied the state will recoup those redevelopment dollars.  

But at Monday’s hearing on the matter, the state’s finance department reported it has completed the closure of just 17 out of 400 redevelopment agencies.