Critics Say It Effectively Kills Redevelopment
From John Kevlin, Reuben & Junius, LLP
Redevelopment compromise or Redevelopment elimination in disguise? Either way, on June 28, Governor Brown signed bills ABX1 26 and 27 into law, which require Redevelopment agencies to make “voluntary” contributions to the state or else be eliminated.
The California Redevelopment Association (CRA) has pegged the total amount owed by all Redevelopment agencies to the state at $1.7 billion in the next fiscal year and $400 million in the 2012-2013 fiscal year.
The San Francisco Redevelopment Agency’s payment alone for the next fiscal year is estimated at over $24 million. Redevelopment agencies are also prohibited from entering into any new agreements until they commit to making their payment.
While the bills do not directly eliminate Redevelopment agencies, critics say that will be their ultimate effect. Prior to the bills’ passage, CRA director John Shirey had stated: “Make no mistake about it: [the bills] would lead to the elimination of redevelopment agencies throughout California.” He continued afterwards: “Since the (legislative) passage of these bills, we’ve heard from dozens and dozens of agencies that will not be able to make the ‘ransom’ payment, and thus will be forced to shut down, eliminating hundreds of thousands of jobs in the process.”
Not unexpectedly, the Redevelopment fight is not over. The CRA has vowed a legal challenge to the bills, asserting that they directly conflict with Proposition 22, passed just last November. Prop 22 was intended to prohibit the state from borrowing or taking funds used for transportation, redevelopment and other local government projects. The fight now shifts from the legislature to the courts.
Reuben & Junius, LLP is a full service real estate law firm, specializing in land use, development and entitlement law. They can be reached at: One Bush Street, Suite 600 , San Francisco, CA 94104, tel: 415-567-9000, fax: 415-399-9480. email: info@reubenlaw.com. www.reubenlaw.com.
***