Marching to a Post-Redevelopment Era

16 Jul

The shuttering of the state’s redevelopment agencies continues to unfold with the passage of Assembly Bill 1484 (AB 1484). The bill clarifies some procedural elements of redevelopment (RDA) dissolution, adds new regulations, and all-but-guarantees a showdown between local governments and the state as both grapple to allocate scarce tax resources.

The bill also, surprisingly, hints at one development strategy that the Legislature may adopt as we continue our march to a post-redevelopment era.

We’ll hit a few highlights of the bill, but you can get a full run-down here, here, or here.

First, AB 1484 puts the state Department of Finance (DOF) in the driver’s seat. The department ultimately decides what counts as an “enforceable obligation” in the RDA dissolution world order. This means they get the last word on who gets paid, and how much they get paid out of the property tax proceeds that would otherwise go to taxing entities like counties, school districts and special districts. Under the law, DOF has the authority to notify the Board of Equalization to suspend sales and use tax payments (i.e., the bread and butter for any municipal government) if they determine that cities and successor agencies have retained too much property tax in certain conditions. The state agency also has wide latitude to decide which former redevelopment agency financial obligations get paid and which ones do not. The department has already demanded that a slew of local governments pay back millions of dollars to the state, causing an outbreak of umbrage among city councils up and down the state.

The trailer bill also outlines a new audit requirement that will be used to determine just how much money the state should expect to receive after the former redevelopment agencies pay off their debts and dispose of assets.

The timeline [PDF] for these activities has been moved up, so municipalities, successor agencies, county auditor-controllers, and state departments are all working to meet tight deadlines in upcoming weeks and months.

On a more positive note, the bill preserves some of the housing funds of the former redevelopment agencies. Groups estimate that some $725 million may be available to fund affordable housing as a result of the bill.

AB 1484 also sets forth a more orderly framework to guide the transfer and sale of agency-owned properties. The law requires successor agencies to come up with a long-range property management plan. As part of that plan, successor agencies must describe the “property’s potential for transit-oriented development and the advancement of the planning objectives of the successor agency.”

That requirement brings to mind Senate Bill 1156, which recently passed the Assembly Local Government Committee.

The bill would allow cities or counties to create Sustainable Communities Investment Authorities that would essentially have the same powers as the old redevelopment agencies, but only in transit priority areas and small walkable communities. The agencies would be able to “issue bonds, divert some property taxes and acquire property” for projects that further the objectives of creating dense, greenhouse gas-reducing, transit-oriented development. Unlike redevelopment agencies, the Sustainable Communities Investment Authorities would not have to demonstrate blight to create a project area.

Even as AB 1484 signals the death of redevelopment as we know it, state lawmakers continue to find new ways to define how we will allocate resources in a post-redevelopment future.

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One Response to “Marching to a Post-Redevelopment Era”

Trackbacks/Pingbacks

  1. Redevelopment Redo « The ELP Blog - September 18, 2012

    […] Authorities.” The bill now awaits the Governor’s signature at the end of the month. As we’ve noted, SB 1156 attempts to resuscitate elements of redevelopment after all of the state’s redevelopment […]

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