When Carlsbad Village's redevelopment district expires in July, those who have helped the area evolve over the past 28 years won't mourn the loss.
Since its inception in 1981, the area has gone from having a commercial occupancy rate of 50 percent to 95 percent.
Debbie Fountain, Carlsbad's director of Housing and Redevelopment, said that business and property owners have found pride in the area.
"There's a renewed spirit in the village," she said.
"There's not the hopelessness that there was in the late '70s and '80s."
While the village used to host pay-by-the-half-hour hotels and run-down shops, it now boasts private art and antique shops, theaters, bistros and cafes.
Much of the $26 million in public funds that have already been spent in the redevelopment zone have gone to infrastructure projects including streetscape and storm drain improvements.
Small private developers have also contributed to the area's improvements by drawing in customers with more than $285 million in investments.
Since the city has been tracking tax revenue in 2001, sales tax revenue has increased 25 percent.
Most of the businesses in the redevelopment area are small, keeping its "charm and ambiance," according to Fountain.
Since receiving redevelopment designation, property values in the village have gone up from $45 million to $285 million.
Though Carlsbad Village will no longer be a redevelopment zone, it does not mean the income from tax increment will stop completely.
The city has 10 years to use tax increment to pay for projects started after 1994. After the 10-year period, property taxes will go back to their normal uses.
The redevelopment zone needs to pay back more than $40 million in lines of credit from the city of Carlsbad and in bonds. As long as those debts are outstanding, the area can continue to collect tax increment.
The bonds will need to be paid back as early as 2024.
However, Fountain said most people will not notice a difference in the attention given to the area even after the redevelopment designation expires.
There are still improvement projects planned, including adding parking, making other street improvements and reconfiguring the entry points to the village to help traffic flow. Additionally, there are talks with private developers for affordable housing and mixed-use projects.
She said the area's improvement over the last 28 years would not have been possible without its redevelopment zoning.
"I think what was key was that it created a really strong focus on the area," Fountain said. "If we didn't have it in place, we wouldn't have been able to create such a special area."
Under the state guidelines for redevelopment zones, Carlsbad Village no longer qualifies.
For an area to meet the criteria for redevelopment zoning, it must be considered blighted physically and financially. Fountain said the area is proud it no longer meets either standard.
"This is a case where redevelopment worked," she said.