By CLARK MASON
THE PRESS DEMOCRAT
Windsor is the latest city in Sonoma County to reluctantly decide to pay the state to keep its redevelopment agency alive.
Mayor Steve Allen referred to it as “shakedown money,” and Councilwoman Robin Goble described it as “ransom.” But in the end, the Town Council unanimously agreed Wednesday night to give the state $1.1 million this fiscal year and about $270,000 subsequently for the next 30 years.
As part of the state budget passed in June, the Legislature and Gov. Jerry Brown dissolved redevelopment agencies but also gave them the option to continue — if they agreed to pay specified amounts for distribution to schools and other taxing entities.
A number of cities, including Santa Rosa, Healdsburg and Cloverdale, already have agreed to make payments to keep their redevelopment programs going.
Without doing the same, a number of Windsor projects could be in jeopardy, said Assistant Town Manager Christa Johnson.
They include improvements to Old Redwood Highway associated with the proposed Bell Village project, redevelopment of the old fire station site, improving several sites on Windsor River Road and economic development catalyst projects.
Windsor officials say their redevelopment funds have dipped because the town was forced to pay the state $1. 7 million from its account during the 2009-11 budget cycle. A nine percent decline in assessed property values in the redevelopment area also has caused a drop in tax revenues.
Most of the discussion Wednesday centered on how much of the initial payment to the state should come from money set aside in the redevelopment agency for affordable housing projects. The council agreed that half should come from housing funds.
After paying the state, there will be $1.7 million left for future housing programs and $1.2 million for redevelopment projects.
Council members also questioned how much revenue the agency can count on in the future.
Finance chief Jim McAdler said the agency gets about $3 million annually in property tax revenues, but about $800,000 of that goes to pay off loan obligations, leaving a “significant” net amount.
The payment to the state is not due until January. Cities are hoping that in the meantime the state Supreme Court will find the diversion of funds unconstitutional and they won’t need to pay after all.
Redevelopment agencies were authorized by the state more than 60 years ago as a way to eliminate “blight.” Once a redevelopment agency is established, cities, counties schools and special districts continue to receive property taxes in the redevelopment area, but most of the growth in property taxes goes to the redevelopment agency to finance its programs and construct affordable housing.
Advocates contend they are a needed tool to promote economic development. Critics counter that the agencies have proliferated excessively and divert property tax revenues from core government services and increase state education costs.
Redevelopment agencies have broad powers, including the authority to acquire property through eminent domain and sell, lease, and develop land.
Redevelopment programs have been responsible for remaking the face of downtowns in Sonoma County, including Cloverdale, Healdsburg, and Windsor. In Santa Rosa, redevelopment paved the way for construction of the downtown shopping mall after the 1969 earthquake.
But redevelopment agencies have also been controversial for subsidizing large retail businesses.