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Redevelopment agencies fear ‘carnage’

By KEVIN McCALLUM
THE PRESS DEMOCRAT

The elimination of California redevelopment agencies will create “carnage” on city projects unless the state gives communities more time to respond and adapt to a recent court ruling, Santa Rosa City Manager Kathy Millison said Friday.

The city stands to lose $12 million in funding for projects ranging from widening roads, reunifying Courthouse Square and building parks. It would also be forced to forgo construction of 285 units of affordable housing, face an annual half-million dollar hit to its general fund and see 12 city jobs put at risk, she said.

“In the short term, it’s a trail of carnage,” Millison said.

Communities across Sonoma County continue to grapple with implications of the state Supreme Court’s rejection of legal challenges to Gov. Jerry Brown’s plan to wrest control of $5 billion in tax revenue from the state’s 399 active redevelopment agencies.

City councils in Santa Rosa, Petaluma, Sonoma, Cotati and Rohnert Park as well as the Sonoma County supervisors next week will hear updates from staff members, many of whom spent much of this week anxiously trying to understand the impacts of the ruling and the meaning of fast-approaching deadlines.

“We’re all scrambling to (find out) what do we do?” said Matt Mullan, city manager of Windsor, which had forecast using $13.9 million in redevelopment money in the next few years.

Sonoma County’s 15 redevelopment areas are expected to generate a total of $50 million in tax revenue this year, money they are supposed to use to fight blight in their communities. All those agencies are set to be dissolved by Feb. 1.

The agencies that formed them have until Jan. 13 to decide whether they want to become the “successor agencies” that will operate under the direction of yet-to-be formed oversight boards.

Petaluma City Manager John Brown plans to tell the City Council Monday that the city has about $14 million that was not nailed down and is now at risk.

“That’s stuff lost as near as I can tell,” Brown said.

Redevelopment funding brings the city about $17 million a year, much of it designated for low-income housing programs, including support for Boys & Girls Clubs, which would take a big hit, Mayor David Glass said.

Unless there are changes, the city has no obvious way to pay for large, local infrastructure projects. “What is before us right now is a game-changer and is totally unacceptable,” Glass said.

Santa Rosa officials plan to update the City Council Tuesday, and will stress the deep financial impact the loss of redevelopment dollars would be for the city. The city’s redevelopment agency receives about $8 million per year in tax revenue from four redevelopment districts in the city.

The $12 million the city had planned to spend would have leveraged another $72 million in private sector investment, Millison said. If those $84 million in investments in the community don’t happen, it could cost the local economy 2,800 jobs, she said.

Sonoma City Manager Linda Kelly said the loss of redevelopment money is on the same scale as the passage of Proposition 13, the landmark 1978 ballot initiative that slashed property tax rates in California.

The elimination of the agencies, however, does not lower taxes. It redistributes the revenue to education and to special districts that have had some of their tax proceeds diverted to redevelopment agencies.

Sonoma City Council will hold a special session Thursday to decide what to do next.

“To transition to a new model after 28 years … is monumental,” Kelly said.

Cities and redevelopment officials are working with state legislators to craft a bill that will preserve some elements of redevelopment, such as its affordable housing component. A Senate measure to protect $2 billion in affordable housing funds heads to committee Tuesday.

You can reach Staff Writer Kevin McCallum at 521-5207 or kevin.mccallum@pressdemocrat.com.





24 Responses to “Redevelopment agencies fear ‘carnage’”

  1. Alex says:

    You wouldn’t have to worry about redevelopment if you didn’t have city planners, traffic depts, and council members planning the city like that of minds of a diseased rat. If you put traffic or cut-throughs or fuzzy-names like “collector streets” in neighborhoods, what do you think will happen to those houses and neighborhoods? People move out, blight moves in. Chop up the sidewalks for more street traffic…less people walking, increase in crime and traffic. This has been shown over and over again how easy blight moves in. The politicians actually look for reasons to call things blight so they can get their little dirty-rat fingers on money for their “special interest groups” to move in…in return, they get more votes. Look at the redevelpment in Guerneville. Since they created the redevelopment, Guerneville has hit rock bottom…it is like a ghost town well before the economy turned. Don’t be hoodwinked into thinking they give a damn because they don’t…just call any city dept and ask for something to be done regarding traffic, sidewalks, parks, etc…they will throw some lame law code at you why they cannot. Death to redevelopment is the first best step to a good city/town!

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  2. Social Dis-Ease says:

    Some of the ‘carnage’ we’ll miss out on.
    Search Dr. Michael Coffman’s:
    Smart Growth Fraud
    and
    Redevelopment; the unknown government.

    Thumb up 4 Thumb down 6

  3. Reality Check says:

    LBR,

    Yes, I’m sure the city will give up some RDA money it has grown to enjoy. But, that money was obtained under false pretenses. It declared areas blighted that clearly weren’t. This practice is now practically universally acknowledged, and (belatedly) condemned.

    Second, the money came out of the hides of other agencies that normally would have received the money. And while the state agreed to make up the difference, it intended to make up a difference based on fixing blighted areas, not two-thirds (one egregious example) of Healdsburg.

    RDAs suffered from hubris and greed. Their demise will be painful for some but well deserved.

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  4. Lets be Reasonable says:

    Turns out the half million loss to the General Fund is the loss in overhead for departments of Finance, Human Resources, City Attorney and City Manager. If Redevelopment is no longer part of the City, then the accountants and lawyers, etc that were supporting the RA are no longer needed. The RA will no longer be paying a portion of the mortgage/upkeep on City buildings. The RA also owes the GF $5.8 million, and it is unclear whether that ever gets repaid. On the plus side for the GF, it should be getting a portion of that $12 million – as I said earlier, I saw some old numbers that suggested it would be around 16%, or around $2 million. RC listed a value of 19% statewide, but the numbers are different for each city. Seems to me that the GF should be okay, but the City loses big time in its ability to do Capital Improvement Projects, Economic Development and support for low income housing.

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  5. Redevelopment was abused says:

    Petaluma’s Mayor David Glass says they won’t be able to pay for ‘large infrastructure projects’. Petaluma doesn’t allow major projects so that claim is riciculous.

    More importantly, Petaluma will no longer be able to forcibly take my tax money and give it away to non-profits and charities. Petaluma will no longer be able to continue building low-income and subsidized housing at an alarming pace and importing people from other areas to fill them up. Property tax will no longer be diverted to pay for bike lanes and other pet projects under the guise of redevelopment.

    I guess Mayor Glass is lamenting the loss of this slush fund. I for one am glad to see it gone.

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  6. Billy C says:

    In my eyes redevelopment like trains can be a good thing or not so good.
    On the plus side it offers a chance for a city to improve its self,increase its marketability and reinvigorate areas the are not productive. (or truly blighted)
    The concept is that the redeveloped area
    will generate much higher property taxes
    some of which will “pass through” to schools and what not and the rest to pay of the cost of redevelopment.
    Sounds like a win win don’t it?
    There are many situations where this
    mechanism has been put to good use.
    Politics and greed can screw anything
    up I doubt I have to cite examples.
    A few years ago I was Happy to know a train would be coming to the door step of my business and I was in a “redevelopment area” I envisioned new
    commercial buildings,Parking for train riders,upscale shopping and office buildings. Instead I found out the my
    property was very quietly rezoned for high density housing as was all light industrial use in the station area.
    “redevelopment” would make my property worthless. A sneaky stroke of the “SMART DEVELOPMENT” pen now threatens 36 businesses 400 jobs and 26 million a year in Taxable sales. IS this a good thing? If you ask the ADC Bike Coalition or the “SMART” people they will say yes we need it!
    From where I sit it all stinks. It will cost the city millions of dollars every year to maintain the hi-density housing that will attract low income people who will further drain our county resources. The business that are run out will not be able to relocate in Santa Rosa adding to the economic pain. The “SMART TRAIN”
    is proving to be a billion dollar boondoggle that only serves the progressive agenda and a few hundred possible riders.
    Losing the redevelopment money will be
    an inconvenience to the City’s long term goals but may save many business
    and property owners from financial ruin.

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  7. 3GunSmuck says:

    How am I supposed to sell my stuff without RDA greasing the government skids and permits?

    Thumb up 13 Thumb down 11

  8. Reality Check says:

    According to a 2006 Legislative Analyst report, redevelopment agencies collected 19% of state property taxes, or about $6.75 billion.

    Once RDAs are ended, a process that will take who knows how long, those billions of dollars will go back into the normal distribution flow of property tax money, in the case of cities 19%, or $1.25 billion.

    Schools, which collect 34% of property tax money stand to gain $2.3 billion (using 2005 tax figures); counties, about $1.9 billion.

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  9. Lets be Reasonable says:

    Thanks Kevin. But what about the argument that redevelopment funds divert money away from the General Fund? When you do your next article, can you research what the portion of property taxes in Santa Rosa go towards the City GF, to the County, to Schools and to Special Districts (and what are these – fire districts and such?). Also, what about the comment that the RA owes the GF $6 million. If true, what happens to that if the RA is dissolved? Seems to me that dissolving the RAs takes about 84% of the money away from the City, but could help the City GF and other local agencies. In terms of the 56 or so percent that goes to education, would this actually be new money for the schools, or would it just be used to help balance the State budget? Thanks again.

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  10. Jumbles says:

    Here is a follow up to my last post:

    http://www.pressdemocrat.com/article/20100223/articles/100229864

    It’s disappointing. Actions like these are what causes the public to lose faith in elected officials and government in general.

    Thumb up 7 Thumb down 3

  11. Jumbles says:

    About a year ago, the Board of Supes authorized the use of redevelopment funds to buy the Guerneville Fire District (or some other river district) a new ambulance. Seriously. How does that eliminate blight?

    I really feel like that was an abuse of the public’s trust and money. It’s hard to believe that buying a new ambulance is consistent with the intent of “redevelopment.”.

    Thumb up 18 Thumb down 4

  12. Steveguy says:

    Kevin, thank you for responding to a question that bothered me too. Redevelopment monies are convoluted for a reason. They can claim a loss, but it may be a gain in other revenue streams. They may call something ‘ different money’ yet it comes from the same money pie.

    A very interesting fact would be how much City money has been spent for decades on the old White House site. It is still a parking lot even though countless millions have been spent ” studying” the issue.

    In other words, what is the REAL cost of a redevelopment project ? It NEVER includes the years of salaries of our so-called Public Servants, consultants, regional boards, etc.. I see them as self-servers, and that are in bed with shady developers to extend their employment and retire very well.

    Find an insider whistle-blower, and you may win a Pulitzer, or get fired. Ouch

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  13. Kay Tokerud says:

    Last I heard, the redevelopment agency owes the city’s General fund $6 million. The redevelopment agency was probably making payments to the city on that loan. When redevelopment is dissolved it will have to pay the city back and they should do so as soon as possible.

    The spin in this article is glaring. Articles from other newspapers across the State are being forwarded to me and they are painting a very different picture. Most cite redevelopment abuse as a major problem, including the displacement of small businesses by eminent domain seizures, large subsidies being given to favored developers, and questionable expenditures for projects the public cares little about. For instance, most people in Santa Rosa have no interest in the courthouse square project and like it the way it is.

    The affordable housing argument is very weak, as there are two other major sources of funding for low-income housing, one is the State’s Low-Income Housing Tax Credits that are a dollar for dollar reimbursement for investments in low income housing and another is the federal government HUD Community Block Grants that grant millions to low income housing developers. These grants are often more than $300,000 per unit, which is more than the full cost to construct the units, usually apartments. Money for Section 8 housing vouchers comes from HUD as well. To top it off, The low income housing properties pay no property taxes.

    Ending redevelopment is long overdue. The original purpose to eliminate blight has been so distorted and expanded in its scope that most redevelopment agencies are extended and never closed out. To my knowledge, none of them has ever closed out a project area. There’s supposed to be a 12 year time limit on the use of eminent domain but agencies have found a way to add more years of eminent domain power for themselves. They did this in Petaluma recently.

    Business and property owners can take a deep sigh of relief knowing that the threat of eminent domain displacement will no longer be allowed, that is where your property can be acquired against your will and given or sold to another person for their private development.

    This is for once a bright spot in the never ending expansion of government control over private property owners. The unwinding of redevelopment should be extended to include rolling back recent General Plans and area plans that have hamstrung commercial property owners by making their properties non-conforming to the new zoning. If these burdens are removed, we would see if private enterprise without government interference could lift our cities’ economies back to some semblance of health.

    Now, about the mountain of redevelopment debt that has to be paid off. That is now more than $100 Billion. Some say redeveloped areas look better than they did before. That may be true but look at the price tag. They have borrowed massive amounts of money for their projects most of which is still unpaid. Next will be decades of property tax diversions that will continue until it is all paid off. Over time, funding will be restored to the General funds of cities, counties, and the State. This money is sorely needed and will prevent many budget cuts that would otherwise have been made. I say turn the streetlights back on and maintain the city’s existing parks for starters.

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  14. Follower says:

    “Affordable Housing”. A family friend moved into a Burbank Apt complex (affordable housing). It was a brand new complex at the time & it was VERY nice.

    Long story, short… within 2 years the Lady who ran the complex had pressured all the non-Hispanic people to move & replaced them with family & friends.

    This “pressure” included “annual inspections” every 6 months. “24 hour notice” that consisted of leaving a note on the door after 10pm for the pending inspection the next morning. Write ups for the most minor policy violations such as storing things in the garage. These policy violations were ONLY applied to non-Hispanic tenants.

    Today you can go to that complex next to the Rohnert Park Police station & count the non-Hispanic tenants on one hand & still have enough fingers left for the appropriate gesture.

    This is only one small example of what is being done with your tax money. And they want MORE!!

    Thumb up 22 Thumb down 8

  15. kevin mccallum says:

    Let’s Be Reasonable,
    We’ll be doing a longer story next week. This one was just meant to note that next week will be a busy one on the redevelopment front.
    But my understanding is that the city’s estimate goes is based on the following: many city staff — city attorneys, engineers, public works folks, economic development specialists and others — work on redevelopment projects, and therefore their jobs/departments are partially funded by redevelopment dollars. If redevelopment dollars disappear, the half a million is what they estimate the GF will no longer be reimbursed for these functions (though, in some cases, the workload wouldn’t be there, either, I guess). Hope this helps. KM

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  16. Lets be Reasonable says:

    Kevin, can you explain/follow up on why this would cost Santa Rosa’s general fund a half million dollars? I thought that the GF would actually get more money if the RA went away, or at least that was the argument I was hearing. Is the City somehow supporting the GF with RA money? I saw some old numbers that seemed to suggest that Cities get around 16% of property taxes in incorporated areas that are not in a RA…

    Thumb up 23 Thumb down 1

  17. Joyce Garcia says:

    For years now I have been attending Cotati’s City Council meetings and I, as well as many others in that community have stood steadfast in our stance, warning the Council that they are depending on money that we just DO NOT HAVE! We have told them on many occasions the money they are spending does come from tax payers and that money is just NOT THERE! So many time I heard from them how this is “Grant Money” and not tax payers money….HELLO! Where do you think they get the grant money?????

    Yet they continue to make their plans on their version of a picture perfect town, “Looking around every corner for money” and seeking grant money, NOT ONCE taking into consideration this money they look for is coming out of the pockets of you…the tax payer!

    Cotati is not the only city in this county that has been warned by concerned citizens…and they are not the only city who continues to ignore the same people who they claim to represent! This spending spree needs to stop! We must continue to hold these officials feet to the fire. They are all a part of the problem of our financial woes in our county, state and nation!

    One more thing…these agencies who are NOT elected by the people are responsible for all the regulation that are stunting true growth in our cities. They are calling the shots and the councils are rubberstamping what they are told by these agencies who have no place in our personal lives…yet we are all adjusting our way of life because of the limitations they put on us!

    One down….NEXT!

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  18. Missy says:

    A well deserved stake in the heart of “redevelopment”, however they’re not going down without a fight. They want their MILLIONS to keep the Democrats rolling in the dough! Why don’t WE THE PEOPLE understand that they want their money, now?

    And affordable housing is a joke, it’s a blight on every neighborhood it goes into. Afford a home on your own illegals or go back to where you came from! We all know that illegal aliens are the ONLY PEOPLE that benefit from affordable housing!

    Finally, Linda Kelly and Kathy Millisand need to be FIRED NOW!

    Thumb up 26 Thumb down 15

  19. Canthisbe says:

    The elimination of California redevelopment agencies will create “carnage” on city projects unless the state gives communities more time to respond and adapt to a recent court ruling, Santa Rosa City Manager Kathy Millison said Friday.
    The city stands to lose $12 million in funding for projects ranging from widening roads, reunifying Courthouse Square and building parks. It would also be forced to forgo construction of 285 units of affordable housing, face an annual half-million dollar hit to its general fund and see 12 city jobs put at risk, she said.
    We could widen a number of roads for free by eliminating bicycle lanes and returning them to car traffic lanes.
    Reunifying Courthouse Square may or may not make sense but does delaying the reunification constitute “carnage”? If it’s delayed long enough, the city planners will eventually decide that it would be a really great idea to divide it with a road and we already have that.
    Why are we “building” parks when we can’t afford to keep the ones we have open?
    Forgo 285 units of “affordable housing”? “Affordable housing” is a misnomer applied to describe taxpayer subsidized housing for no or low income individuals. That may or may not be a good thing, but subsidizing the construction of poorly designed and poorly constructed multi-unit buildings in areas where that is not the highest and best market use of the property so that developers can make a higher profit is not necessarily the best way to do.
    Now 12 city jobs put at risk – now that’s carnage!!!!
    Redevelopment funding brings [Petaluma] about $17 million a year, much of it designated for low-income housing programs, including support for Boys & Girls Clubs, which would take a big hit, Mayor David Glass said.
    The “Boys & Girls Clubs sound like worthy causes but are they “redevelopment”?
    Santa Rosa officials plan to update the City Council Tuesday, and will stress the deep financial impact the loss of redevelopment dollars would be for the city. The city’s redevelopment agency receives about $8 million per year in tax revenue from four redevelopment districts in the city.
    The $12 million the city had planned to spend would have leveraged another $72 million in private sector investment, Millison said. If those $84 million in investments in the community don’t happen, it could cost the local economy 2,800 jobs, she said.
    It would be interesting to see that data that backs up that statement. Does that $12 million really leverage $72 million in private sector development and generate local 2,800 jobs?
    Cities and redevelopment officials are working with state legislators to craft a bill that will preserve some elements of redevelopment, such as its affordable housing component. A Senate measure to protect $2 billion in affordable housing funds heads to committee Tuesday.
    So “redevelopment” is really about “affordable housing”

    Thumb up 24 Thumb down 11

  20. Greg Karraker says:

    I love this story… In Santa Rosa, Kathy Millison is squawking about losing redevelopment funds to widen streets, while in Cotati, Dianne Thompson is bleating about losing redevelopment dollars to cut streets in half. Sounds to me like the best solution is to return these funds to the property owners from which they were boosted, so then can spend said dollars more wisely on booze, bacon, and bingo

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  21. brown act jack says:

    commit carnage, or eliminate carnage?

    Simply ask yourself the simple question!

    How did the cities do anything before the redevelopment agencies came into being?

    It is easier, I agree, for cities to use redevelopment agencies to create the things that the public agencies want to create, but it does eliminate, to some degree, the ability of the citizen to control the spending of the wealth of the cities.

    Everyone would like to spend the wealth of the cities for the benefit that the expenditure would bring to them, but , unbridled ability to do things leads to what has happened within some redevelopment agencies.

    What will happen will happen, and it may be good, or bad, but the happenings will occur.

    Live with it!

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  22. J.R. Wirth says:

    This is only “carnage” for local politicians who use this money as a slush fund to reward well connected developers.

    Thumb up 31 Thumb down 10

  23. Social Dis-Ease says:

    Warms mt heart, the globalists are gettin’ twitchy.

    Finally something they couldn’t control.

    Is this akin to Oct. ’08 when cronie Paulson threatened martial law if they didn’t get their money?

    Now they’re socially engineering some civil unrest over it, and the PD is complicit every step of the way…
    as usual.

    Truly amazing.

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  24. Reality Check says:

    It’s hard to be sympathetic. Very hard. Most of these agencies did everything possible to make this as messy as possible.

    Rather than accept state jurisdiction, which was clear, and start winding down affairs in an orderly manner, the agencies rushed to spend money and commit to long-term contracts.

    So now the crying towel is out. Woe are we. People will suffer. And they will. Unfortunately, the people who should suffer–local leaders of redevelopment agencies–probably won’t

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