Redevelopment is dead. Long live redevelopment.
After naming itself the successor to its dissolved redevelopment agency early in the year, the City of San Diego this summer handed those responsibilities to a new organization known as Civic San Diego.
The new entity was formed by merging the two nonprofit corporations that handled redevelopment tasks in the city’s largest project areas, the Centre City Development Corp. (CCDC) in the downtown area and the Southeastern Economic Development Corp. (SEDC) in the city’s southeastern areas.
Civic San Diego’s board is composed of the seven CCDC board members and two board members from SEDC. The structure of SEDC, if not its autonomy, was retained by making it a subsidiary organization of Civic San Diego, where the rest of the SEDC board will remain in place.
For now, the organization will handle land-use and permitting functions, manage city parking needs and carry out the remaining lists of state-approved redevelopment projects in the CCDC and SEDC project areas.
But supporters of the organization have made clear they envision a bigger role sometime in the future.
“It begins with forming the life raft,” said Councilman and mayoral candidate Carl DeMaio from the council dais, before voting to approve the merger.
At the City Council meeting in which the Civic San Diego plan, favored by Mayor Jerry Sanders, won 7-1 approval, with only Councilwoman Marti Emerald voting against, the mayor’s Senior Policy Advisor David Graham said SEDC’s financial picture meant the merger was the way SEDC staff would have the resources to complete in-progress projects.
Civic San Diego has a $5.9 million budget in its first year in existence.
Initially, the new organization has three primary functions that will generate its funding stream.
For one, successor agencies across the state when redevelopment was ended were tasked with creating an enforceable payment schedule for the defunct agency’s outstanding financial obligations. After conditionally approving those schedules, the State Department of Finance provided the successor agencies with administrative funding to carry out the responsibilities.
That money will now be given to Civic San Diego, accounting for $4.4 million of its initial budget.
Projects in redevelopment areas that weren’t within the footprints of CCDC and SEDC currently have $3.3 million in state-approved administrative funding. That money and those responsibilities aren’t in Civic San Diego’s purview yet, though the City Council expressed interest in changing that separation at a later date. Because staffers handling those projects are represented by the city’s Municipal Employees Association (MEA), those responsibilities can’t be handed to Civic San Diego until the culmination of negotiations with the labor union.
Civic San Diego will also conduct the city’s land-use and permitting responsibilities in the SEDC and CCDC project areas. CCDC earlier this year began charging processing fees in the downtown area for the first time. Kim Kilkenny, chair of the organization’s board of directors, said then there was enough momentum downtown for developers to handle the new fees, but said the same wasn’t true for the southeastern area.
Though downtown developers didn’t welcome the news of new building fees, they were pleased to learn they’d be a third or half as much as elsewhere in the city.
By opting not to fight the new-but-cheaper fees, developers maintained the presence of the CCDC, which has a developer-friendly reputation because of its ability to process permits in three months or less, far faster than elsewhere in the city.
The new permitting and land-use fees will couple with the funds the CCDC receives for its long-held role administering parking restrictions downtown to make up the remaining $1.5 million of its initial annual budget.
Opponents of the CCDC-SEDC merger, both before and during the City Council vote, said it changes the agencies’ mission from combating blight to processing permits on behalf of developers. They said the end of redevelopment was an opportunity to start from scratch, rather than build on the foundation of two preexisting corporations.
“That’s what it appears from their budget: it’s just permit processing, which is a concern for the affordable housing community, as well as to communities outside of downtown and to labor, that this would be the advocacy arm of developers, especially with a board that’s not representative of broader interests around the city,” said Murtaza Baxamusa, director of planning and development with the Family Housing Corporation and San Diego Building Trades.
He cited a 2009 performance review that said the CCDC at times catered to developers.
In early July, the state legislature passed AB 1484, which mandated that successor agencies return money from their Low and Moderate Housing Funds to the legal entity that created it.
Civic San Diego was forced to make an $89 million payment to the county as a result of that legislation.
A potential future funding source being considered is for Civic San Diego to work as a syndicator on behalf of the city to secure “new market tax credits” in census tracts that meet certain federally mandated requirements.