Tag Cloud
In what has been called a David versus Goliath victory, the California Supreme Court ruled Thursday in favor of Gov. Jerry Brown’s plan to disband redevelopment agencies in California, and opponents of redevelopment in Sacramento wasted no time to celebrate the success.
“After years of opposition to redevelopment activities, the abuse of government power and confiscation of property for private use, our day finally came,” Moe Mohanna, a local real estate developer, said Tuesday.
The California Supreme Court ruled Thursday to uphold the redevelopment “elimination” bill, but struck down the bill that would have allowed agencies to make “continuation payments” to stay in business.
The two bills were passed as part of the 2011 state budget and caused a flurry of activity for redevelopment agencies across the state.
The California Redevelopment Association and the League of California Cities quickly challenged the new laws in court.
Meanwhile, redevelopment agencies got to work coming to terms with the possibility that they would have to either “opt in” to a new program – which would require annual payments in the millions of dollars – or submit to having their agencies phased out permanently.
In Sacramento, the City Council and the county Board of Supervisors chose to keep the Sacramento Housing and Revelopment Agency active by agreeing to the required “continuation payments” outlined in the legislation.
If the court had upheld both bills, the SHRA would be preparing to make the first of those payments due in 2012 – an estimated $22 million total – to keep the SHRA going.
The ruling to uphold the elimination bill, however, is more than a game-changer for redevelopment agencies – it’s a game-ender.
“We’re shocked,” La Shelle Dozier, executive director for the Sacramento Housing and Redevelopment Agency said Wednesday. “Obviously this is not the outcome that the agency was hoping for.”
Dozier said the SHRA sees the court ruling as one of the “worst possible scenarios” – and one the legislature never intended.
“There was never any anticipation that over 400 agencies would have to unwind over night,” Dozier said. “It was anticipated that some (agencies) would opt to dissolve, but some would opt to continue activities – which is what we had opted to do.
“I think the severing of the two bills in the court was a huge blow to redevelopment agencies,” Dozier said.
Sacramento projects stalled by the legislation while the courts were sorting things out now come to a screeching halt – including the affordable housing portion of the 65-acre Township 9 project and the remaining phases of the Paso Del Nuevo housing project.
“The issue is that, even if the deadline (to dissolve) is extended (by the legislature), there will be a stay on redevelopment activities,” Dozier said. “I don’t anticipate that they will allow us to move forward on any projects while they are figuring out a new redevelopment plan for the state.”
Now that the decision has been handed down, redevelopment agencies will start the process of dissolving – but leaders at the the California Redevelopment Association (CRA) and League of California Cities said Thursday they aren’t finished fighting yet.
The (California Redevelopment Association) and the league vowed to work with state legislators immediately to develop legislation to revive redevelopment, Kathy Fairbanks, California Redevelopment Association representative, said in a press release Thursday.
Opponents of redevelopment agencies see the court ruling as a step in the right direction for the state and for Sacramento, Mohanna said.
“Our neighborhoods, our schools, our police department and many other governmental agencies will now have more funds to provide essential services for our community,” Mohanna said, “rather than a few select private developers that play the game with redevelopment money.”
Melissa Corker is a staff reporter for The Sacramento Press. Follow her on Twitter @MelissaCorker.
Ironically, it was RDA's own doing (Prop 22) which hammered in the final nail in their coffin.
Let our community flourish. Let the free market rule; this is the end to crony capitalism. This is the end to eminent domain and property rights abuse.
Which services were you referring to? The last time I checked police, firemen, and teachers were being laid off, along with public school and park closures, among many many others. Now the money will be directed back to our local coffer and put to better use.
As a colleague of mine once said, when RDAs and their developer buddies get together, money seems to travel from the right pockets to the left pockets. I'll let you fill in the blanks on whose doing who costly favors.
It is true that money that goes to RDAs does not go to schools, and I understand why one might choose schools over redevelopment. It is also true that some RDAs in this state have done egregiously bad things (e.g. spending money on "blighted" golf courses). But Sacramento in general uses its tax increment money to do good things, including a great deal of affordable housing, dense transit-friendly development, and encouraging business growth in otherwise depressed areas.
If you lament the high unemployment rate, you should note that all the construction currently going on in downtown and midtown, with the exception of Sutter hospital, is funded by redevelopment--that's a lot of construction jobs in an economy that needs them. And yes, those construction workers work for SHRA's "rich friends", the private developers. Would you prefer that they be government bureaucrats? Would that be more efficient? If government is going to spend your tax dollars in a way that supports the economy, then the money eventually needs to find its way to private industry. Remember, these guys aren't bankers who make huge bets on the economy without producing anything. They take the money, employ a bunch of blue collar workers, build new buildings downtown, and create new places for us to live, work, and play.
I'm not trying to say redevelopment is perfect; it is not. A big reform that shrinks it and refocuses it on its original goals is probably warranted. And if the money is determined to be more effectively used in the schools, then so be it. But redevelopment has done positive things for Sacramento, and I would be sad to see it disappear completely.
RDA always brags about job creation, but wasn't Sacramento County's RDA one of several reviewed by the State Controller who didn't even bother to submit or track the number of jobs they created...hmmmmmm
Our state tax rates are the same with or without RDA's You seem to imply that tax dollars diverted to RDA's somehow creates more jobs and more local economic activity than if those same tax dollars were funding police, fire and schools. That is simply unsubstantiated.
\If you look at local educational performance and dismal crime rates for our area, I argue we need more cops and teachers then we another shiny building.
Yes news sources such as the SacPress always gravitate towards tangible images of construction and rehabilitation. The alternative uses of those RDA dollars, such as better educated children or a crime not happening, just aren't as easy to summarize in a headline.
A friend of mine who is a disabled senior citizen tried to liase with SHRA in order to move from one HUD apt bldg to a different HUD apt bldg. She had a portable voucher - so it is quite simple in terms of paperwork to transfer from one apt bldg to a different HUD apt bldg with a portable voucher. The only thing SHRA needed to do was complete 2 pages to calculate what her new rent would be. Actually, she was going to be paying the SAME rent - since it is based on income and her Social Security benefits which was the same amount for a year. The paperwork should have been completed in less than a week - it wasn't that big of a deal - just a formality because the amount of her rent was going to remain the same....but SHRA was so disorganized and discombobulated it took several months to straighten out. My friend told me she spent several hours one day sitting in the lobby of SHRA and demanded they fix her paperwork so she could move to a different HUD apt bldg. Finally a supervisor came out to assist her - my friend and the supervisor sat down at a table together and went over the paperwork. The supervisor went through the file and admitted to my friend that 90% of the her file had been mismanaged - that all the paperwork was filled out wrong - pages which did not belong together were stapled together. Even other clients paperwork somehow wound up in her file by mistake! The two of them worked on the file for about 5 hours together - and finally got it fixed. But in order to get that accomplished - my friend literally had to do a "Sit In" strike in the lobby of SHRA and spend almost one day with the staff. She said she wouldn't leave unless they fixed her file - even if it meant getting arrested at 5pm when the office closed! It shouldn't take that much effort to do simple paperwork.
If SHRA loses funding and closes it would be a good thing. For years I've heard that many of the apt bldgs they run are slum type conditions. I also spoke with many community organizers who work on afffordable housing issues who told me there was plenty of graft, corruption and mismanagement of funding at SHRA. I believe them - when an Oak Park slum lord - Art Ballard who owned what used to be the Woodruff SRO apt bldg burnt down due to faulty electrical wiring, in the mid-1990's - a tenant died in a fire when the building almost burn down completely. Art Ballard was a notorious slum lord in Oak Park for years. He should have gone to jail for manslaughter - the building burning down was 100% due to fried faulty electrical wiring. Instead, SHRA gave Art Ballard a known slum lord a low interest loan to remodel the Woodruff. The bldg was never brought up to code - Art Ballard just had some contractors make superficial cosmetic improvements on the surface to make it look like it had been repaired and he kept a lot of the redevelopment money for himself - not remodelling the building. Eventually, the IRS took slumlord Art Ballard to court because he didn't pay his taxes for years - he lost the Woodruff Bldg and also the Guild Theatre - the IRS took all his assets and Art Ballard lost his shirt. Why did SHRA award a known slum lord with very low interest loans when his SRO burnt down due to faulty wiring - and some tenants died in that fire?
I am sure there are some very good and decent redevelopment agencies - but due to chronic abuse - I think there era is over. If SHRA goes out of business - it was their own fault from mismanaged projects.