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San Diego named successor to its redevelopment agency

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The City Council unanimously approved a resolution earlier this month naming the city of San Diego the successor to its redevelopment agency.

As a successor agency, the city will now take control of the assets and ongoing projects of its redevelopment agency (RDA) after its closure on Feb. 1.

Councilman Todd Gloria said the unwinding of redevelopment agencies currently presents more questions than answers, but naming the city as the agency’s successor is in the best interest of the citizens of San Diego.

Since many redevelopment projects stretch years into the future, the law that ended redevelopment agencies, AB 26, specified that a successor agency must be in place to handle those responsibilities after all state RDAs are targeted for dissolution at the end of the month.

The structure of the new city department that will act as the successor agency is presently unknown, and depends heavily on which projects are permitted to move forward.

Last year the council gave preliminary approval to $4 billion in new projects, hoping to lock in funding before redevelopment agencies were shuttered. Many other agencies across the state took similar action.

The state Legislature now must determine which of those projects represent enforceable obligations for the successor agencies.

San Diego Chief Operating Officer Jay Goldstone is outlining the structure of the new city department that will act as the successor agency. That structure will depend heavily on which projects the state considers enforceable obligations.

“It was a very curious process that was set up, to say the least,” said Council President Pro-Tem Kevin Faulconer.

It’s not fully known whether serving as a successor agency will negatively affect the city’s general fund.

However, AB 26 specifically provided administrative costs for the staffing and operation of the successor agencies, according to Jeff Graham, vice president of redevelopment for the Centre City Development Corp., who spoke to the council in favor of the resolution.

The state Legislature is also currently crafting clarifying legislation to guide cities in setting up their successor agencies.

All successor agencies will be subject to a seven-member oversight board.

The members would include one appointed by the board of supervisors, one appointed by the mayor, one by the largest special district in the city, one by the county superintendent of education, one by the chancellor of the California Community Colleges, one member of the public appointed by the board of supervisors, and one from the largest representative employee organization of the former RDA.

The oversight boards themselves would be subject to the review of the state department of finance.

Councilman Carl DeMaio, concerned that the city would be deprived of one of its appointments since its RDA technically doesn’t have any employees, suggested naming Mayor Jerry Sanders an employee for a salary of $1 between now and when RDAs are stripped of control at the end of the month.

AB 26 explicitly calls for the liquidation of all RDA assets, but doesn’t specify when that must occur.

Faulconer expressed fear that the oversight board might force the successor agency to dump its assets immediately, rather than after the economy improves when taxpayers would see a greater return on their money.

“It’s another great example of what lays before us,” he said.

DeMaio said the council shouldn’t wait for guidance from the state on the future of redevelopment.

“We need to have a vision for, what does redevelopment look like?” he said. "There were abuses there, and that’s why the agencies were shut down. Now we have to chart the course.”

He also expressed concern that the state would refuse to reimburse administrative costs associated with obligations ultimately declared unenforceable.

He suggested creating a spectrum of projects from most to least certain to be declared enforceable. Those at the far end of the spectrum would then receive minimal administrative support prior to the state’s guidance.

Council President Tony Young supported the notion that the council should empower itself to make further decisions.

“We can decide,” he said. “We shouldn’t be asking if we can do this.”

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City of San Diego

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City of San Diego Executive(s):

Sherri Lightner

  • Council President Pro Tem

Kevin Faulconer

  • Mayor

Todd Gloria

  • Council President

Myrtle Cole

  • City Council Member

Mark Kersey

  • City Council Member

Lorie Zapf

  • City Council Member

Scott Sherman

  • City Council Member

David Alvarez

  • City Council Member

Marti Emerald

  • City Council Member

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