Redevelopment agencies are no more, and local politicians aren’t happy about it.
The California Supreme Court ruled Thursday to uphold legislation putting an end to more than 400 such organizations, and nixed a legislative work-around that would have allowed the agencies to continue operating for a cost.
Local politicians reacted swiftly and harshly, and with San Diego City Councilmember Carl DeMaio directing partial blame at his mayoral opponent, State Assemblyman Nathan Fletcher.
DeMaio pointed to "the midnight deal" (Senate Bill 863) that lifted the spending cap on the Centre City Development Corp., downtown San Diego's redevelopment agency, as a contributing factor to the demise of redevelopment agencies.
The agreement, constructed and ushered through by Fletcher, potentially paved the way for a new Chargers stadium and came under heavy scrutiny at the time as a backdoor deal.
“The midnight deal absolutely contributed, and probably resulted in the end of redevelopment,” DeMaio said.
“That left a sour taste in many people’s mouths, and some saw redevelopment as a pork fest, and people said it’s nothing but a boondoggle, something to eliminate,” he said. “It was done in exchange for support on the budget, and it undermined the credibility and the benefit of redevelopment agencies in the public’s eyes.”
Amy Thoma, Fletcher’s campaign spokeswoman, denied the existence of any connection between the agreement and the governor’s decision to eliminate redevelopment agencies.
"No one should be surprised that the most divisive politician since Mike Aguirre would choose to launch hysterical attacks instead of working with others to find a solution," Thoma said. "You have to live on another planet to think the same legislature which approved San Diego keeping more of its tax money by a two-thirds super majority would be mad at itself for that action. It’s silly."
Otherwise, state and local politicians alike said they’d begin looking for solutions that would allow the chief aims of redevelopment -- combating blight, creating affordable housing, spurring economic development -- to be achieved through other means.
San Diego Mayor Jerry Sanders, out of town temporarily, issued a statement reiterating his claim that the move was a cash grab by Gov. Jerry Brown, and said the ruling would negatively affect neighborhoods and the city’s economy for decades.
“We’re not going to stand by idly and let the progress our communities are making simply die off; we’ll begin working immediately with our state legislators to pass new laws giving us tools enabling reinvestment in our lower-income communities,” his statement read.
San Diego Chief Operation Officer Jay Goldstone, fielding interview requests while the mayor was out of town, said the mayor’s office was disappointed, but not surprised, by the court’s ruling.
The mayor will now meet with the “Big Ten” mayors, the League of California Cities, the state Legislature and the City Council to find an alternative approach to creating jobs and building affordable housing through public-private development partnerships.
"There’s got to be some level of support for this approach in the Legislature, or else they wouldn’t have moved AB 27 if they just wanted to kill redevelopment," he said.
AB 27 attempted to allow redevelopment agencies to continue operations if they exercised an option to contribute to state funds marked for schools and special districts. The court ruled that AB 27 conflicted with Proposition 22, a voter-approved ballot measure from 2010 that prohibited the state from borrowing from local governments.
"Matosantos' (the plaintiff) argument that the payments are valid because technically voluntary cannot be reconciled with the fact that the payments are a requirement of continued operation," the ruling read.
Local members of the state assembly said they’d get to work crafting legislation carrying out the intent of AB 27: allowing cities to maintain funds for local projects.
“We will work with interested community groups and elected officials in support of legislation that gives cities the tools they need to revitalize urban areas and create good-paying jobs for residents,” a statement from Fletcher read.
Likewise, Assembly member Toni Atkins said the Legislature will need to take a different approach to its intent of preserving local control of economic development and affordable housing.
“Specifically, we’ll have to look at economic development goals, which had become very widely defined under redevelopment, and now we’ll have to take a narrow approach to development, and we’re ready to pick this up as soon as we’re back,” she said.
The goal of AB 27, she said, was to force redevelopment agencies to carry their share of the state’s budgetary burden, just like other programs and departments, while still allowing for a reasonable degree of economic development in local communities. Now the Legislature will need to find a different solution that can coexist with the Supreme Court’s ruling.
“This is on a short list of priorities with the budget, education, and a few other things,” she said.
DeMaio said he is calling on the City Council and the mayor to come together for their first meeting of 2012 to develop a backup plan and to begin advocating for maintaining redevelopment.
Redevelopment agencies need to be recreated with reforms directed to accountability and transparency, according to DeMaio.
"That reform is to place an accountability metric of the public’s ROI (return on investment) -- the public dollars generated through public investment -- on every project, and to place a leverage factor on every project too," he said.
He also said all redevelopment decisions should be made in public.
"It’s important that all projects have a citizen advisory committee," he said.
DeMaio said putting the issue before voters as a ballot measure would need to be a backup option for the City Council.
Goldstone, however, said he doesn’t support governing through propositions.
City Councilmember David Alvarez has criticized redevelopment agencies for focusing too much attention downtown.
“This is an opportunity to create a tool for local governments that focuses on eliminating true blight in some of the neighborhoods that have a lot of it, and focusing efforts on economic development in the city of San Diego in communities that desperately need it and lack the infrastructure required to create jobs through construction, business support, small businesses, and affordable housing.”
He said he hoped the City Council and the state Legislature could work together to find a better tool for local governments than redevelopment agencies had been.
“We need to not look at this as us versus them, the way it has been so far this year,” he said.
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