WatchSonoma Watch

Redevelopment fallout reverberates across region



The looming elimination of redevelopment agencies has been greeted in Sonoma County with wildly divergent reactions.

Local government officials express horror, warning of “carnage” to budgets, delays for critical community projects and setbacks for economic recovery efforts.

School officials are encouraged, expecting to enjoy a larger slice of the property-tax pie.

And critics of redevelopment are downright giddy, convinced the agencies strayed far from their original blight-fighting mission, threatened private-property rights and now deserve their fate.

But one thing everyone seems to agree on is this: California’s breakup with its 400 redevelopment agencies promises to deeply impact Sonoma County and dramatically alter the priorities and funding of local government.

“This is a big hairy deal,” said John Haig, the Sonoma County government’s redevelopment manager.

As Highway 12 winds south through the scenic Sonoma Valley, it passes picturesque vineyards and forested hillsides that hide luxurious estates.

Just outside the city of Sonoma, however, the scenic vistas recede, blocked by a jumble of modest homes, aged apartments and businesses crammed near the busy roadway.

Here Highway 12 is Main Street for the 11,000 residents of Fetters Hot Springs, Agua Caliente and Boyes Hot Springs, communities that grew haphazardly in the late 1800s and early 1900s as tourists flocked to the area’s geothermal springs. But as the popularity of the baths waned, much of the area fell into decay.

The county formed a redevelopment area in 1984 to address basic needs. Highest on the priority list has long been sidewalks, streetlights and parking, improvements aimed at making the highway safer for residents and visitors and more attractive to businesses.

It’s been a slow process. After years of planning, the second phase of that plan is ready to go. County supervisors last year committed up to $13 million for the project. Bids are nearly ready to go out.

But the demise of redevelopment has left the project frozen; money set aside for it is at risk of being diverted, and longtime backers are disheartened.

“It is difficult for me to accept that a modest dream of sidewalks along our main community thoroughfare may never be realized,” said Steve Cox, chairman of the committee that offers input on the project area.

Many projects at risk

Gov. Jerry Brown’s plan to eliminate redevelopment agencies as a way to free up property tax revenue to help solve the state’s budget crisis is roiling communities across the county.

A new police station in Cloverdale. A homeless shelter in Guerneville. A new Highway 101 overpass in Santa Rosa. Upgrades to the aging Healdsburg Memorial Bridge.

These and dozens of other projects and programs across the county are in jeopardy following a state Supreme Court ruling two weeks ago. That decision upheld the legislation that directs the abolishment of the agencies but also blocked a compromise plan that would have allowed them to continue operating on a smaller scale.

That has left local officials scrambling to understand the legal and financial implications. They’re racing to meet a Feb. 1 deadline to dissolve their agencies, while pleading for more time to wind down operations in an orderly way.

“We’re lobbying for a stay of execution and we’re getting ready to inject ourselves,” said Bill Arnone, chairman of the board appointed by the City Council to run Santa Rosa’s redevelopment agency.

In the meantime, proponents are talking up the accomplishments of redevelopment, questioning the fairness of shifting local property tax to the state, and eyeing ways to preserve the core services.

But redevelopment is proving to be a difficult client to defend. Its complex taxing scheme is not easily understood. Examples of abuse, such as the $17 million Palm Desert spent rehabbing a golf course, don’t help, either. Nor do audits that conclude the lack of accountability and transparency at redevelopment agencies creates a “breeding ground for waste, abuse and impropriety,” as state Controller John Chiang reported.

Put that track record up against the competing demands for schools and the state’s massive budget deficit, and it’s easy to see that redevelopment advocates are in a tough spot.

“We don’t have a redevelopment champion outside of city officials, who are perceived as whining, and developers, who have been perceived as enriching themselves,” said Dave Gouin, the city’s director of economic development and housing. “And everybody else doesn’t understand it.”

Agencies created in 1945

Redevelopment agencies, first authorized in California in 1945, raise money through property taxes and bond sales and are supposed to spend the money fighting blight. The 400 in the state collect about $5.7 billion in property tax revenue a year — 12 percent of the state total. They only get to spend about 58 percent, however, after 20 percent is dedicated to affordable housing and 22 percent is passed on to other taxing entities like schools.

Normally, when property values rise, all taxing agencies — counties, cities, schools and fire districts — receive a proportionate share of the revenue. In redevelopment areas, most of the increase, known as the “tax increment,” goes to the redevelopment agency.

There are 10 such agencies in Sonoma County, one for each city and one for county government. The county operates three such “project areas,” in the Russian River, Roseland and in Sonoma Valley. Santa Rosa has four. Every other city has one, for a total of 15 countywide.

This year, the areas are expected to generate just over $51 million in tax-increment revenue for redevelopment proposes. That’s after $19 million in “pass throughs” designed to alleviate past concerns raised about redevelopment’s increasing share of property taxes.

Of the $51 million, $33 million has already been distributed this fiscal year. In the wake of the court ruling, the remainder will go into a trust fund that county officials have established to handle debt payments, some of which stretch for decades.

It’s unclear how much that debt service actually is, and thus precisely how much other taxing agencies in each redevelopment area would stand to gain, said Donna Dunk, interim Sonoma County auditor-controller-treasurer-tax collector. “If redevelopment doesn’t get it, somebody does get it,” Dunk said.

But how much and to whom? “Those are the questions we don’t have any answers for right now,” she said. “And it won’t be known until we get more guidelines from the state.”

Generally speaking, revenue will be retained to pay off existing debts, such as long-term bond payments for work already completed or under way. Projects to which the agencies are already committed, defined as those with an “enforceable obligation” to a third party, will also be allowed to go forward.

But everything redevelopment agencies had on their drawing boards stays there. It doesn’t matter how much money the agency budgeted, earmarked, or otherwise agreed to spend on them. If the money wasn’t committed as of Jan. 1 of last year, it is at risk.

That’s of particular concern to communities like Healdsburg, which just borrowed $13.5 million through a bond sale last year, but hasn’t formally committed it to specific projects. They include $1.4 million for the rehabilitation of the Healdsburg Memorial Bridge and $1 million for the first phase of an $8 million recycled-wastewater irrigation system that was expected to begin construction this year.

A $1.5 million beautification program to accommodate pedestrians, reconfigure parking, create “pocket parks” and add trees along Center and North streets also is on hold, according to assistant City Manager David Mickaelian.

They city has spent $300,000 preparing for the project, but has no construction contracts.

“That set of plans becomes a $300,000 paperweight, potentially. How is that effective use of taxpayer money?” Mickaelian said.

An agreement for the city to use $5.5 million in redevelopment money to buy the old Foss Creek School site for permanent use as a community center also is in limbo.

Schools benefit debated

Schools are the largest beneficiary of property tax revenue, absorbing about 50 percent of every dollar. Whether the demise of redevelopment agencies will help schools much or at all is a matter of strenuous debate.

School districts are theoretically protected from the loss of property tax revenue from redevelopment by Proposition 98, which set minimum funding levels for schools. But in recent years, as its budget woes have mounted, the state hasn’t had the money to pay.

The state has failed to pay $18 billion it promised to schools since 2007, and Brown has said he will cut $4.8 billion from schools if taxpayers don’t approve his package of fall tax hikes, said Steve Herrington,  Sonoma County superintendent of schools.

The governor has said that if redevelopment goes away and local property taxes are allowed to flow naturally to schools, the state would be off the hook for about $1 billion in education payments this year.

That does not guarantee that the state will increase its funding for schools, argue redevelopment supporters.

“The schools are not going to get one more dime out of this,” said Kathleen Millison, city manager of Santa Rosa.

That may be true in the short term, but long term the change will provide an “indirect boost” to schools, Herrington said.

“It’s not a windfall to us,” he said. “I think it’s a structural correction that 20 years from now will be a benefit to schools, if they don’t go back and amend it again.”

Some argue that the cities and county will benefit, as well, from the demise of redevelopment agencies because they will see additional tax revenue flow to them for general uses. Gouin, the Santa Rosa redevelopment director, contends that any increase will be minuscule compared with the $12 million the community may lose.

That’s the amount of the agency’s available cash, money it attempted to hurriedly commit last year to projects in a process the state says is invalid. Precisely how Santa Rosa’s redevelopment agency assets will be liquidated will be up to a seven-member oversight board dominated by representatives of the underlying taxing districts whose revenues were diverted to fund the agency. They include county government, schools and Santa Rosa Junior College.

Each of 10 “successor agencies” designated to take over from the soon-to-be-defunct redevelopment agencies will have its own oversight board.

Santa Rosa will get two seats on its board, one appointed by the mayor and one representing the employees of the former agency. The board’s responsibility is to “dispose of all assets and properties of the former redevelopment agency” in a way that is “in the best interests of the taxing entities.”

Herrington, as schools superintendent, said he will be sitting on the county oversight board. He said redevelopment agencies have done much good work in their communities and made them better places.

But he believes they have strayed from their intended purpose of eliminating blight. He notes that in many cities, a significant number of general government employees’ positions are funded through redevelopment revenue.

“It wasn’t meant to pay for salaries. It was meant to fund projects, capital improvements,” Herrington said.

Purpose has shifted

That perception that redevelopment has drifted from its original purpose is well founded, said David McCuan, assistant professor of political science at Sonoma State University.

As cities and counties have faced budget pressures, they’ve leaned more heavily on their redevelopment funds, finding new and novel ways to fund staff throughout their organizations, McCuan said.

Critics say redevelopment has also strayed by getting overly cozy with developers.

“What started out as a remediation tool for blighted areas, slums … really changed a lot over the years, and the redevelopment money got used for a lot of other things, primarily subsidizing new for-profit development,” Kay Tokerud told the Santa Rosa City Council.

Tokerud sued the city of Santa Rosa over the formation of the sprawling Gateways redevelopment district in 2006. The suit ultimately failed, but it did delay the implementation of the district for three years.

She and others seized on efforts by Simon Properties Group, the largest mall owner in the nation, to get the city to use redevelopment dollars from the Gateway area to support a $27.6 million parking garage as part of a mall facelift.

That never happened, but the agency did loan $2.2 million to the mall last year to help it upgrade its utilities and attract new tenants. The majority on the City Council supported the deal, but others dubbed it a “sweetheart deal” for a huge corporation.

Now the debate is shifting to what should replace redevelopment agencies, if anything. Assemblyman Jared Huffman, D-San Rafael, said he would support legislation to keep the agencies functioning, but with stricter guidelines.

“Everyone agrees that redevelopment dollars should not be handed to strip mall developers,” he said.

27 Responses to “Redevelopment fallout reverberates across region”

  1. Social Dis-Ease says:

    Here’s a link where you can view the resolution calling for the U.S. pulling out of the United Nations based on it’s policies; Agenda 21, ICLEI, Sustainable Development all being of catastrophic effect on our Country. http://www.freerepublic.com/focus/f-bloggers/2834170/posts
    It went through the Republican National committee unanimously.
    The committeewoman Carolyn McCarty who scripted it is a hero and patriot.

    It’s all over the net.

    Thumb up 6 Thumb down 1

  2. Lets be Reasonable says:

    @Waltter – while I also tire of single-mindedness of many of the posters here, censorship is not the answer. After a bit, you know who they are, and you just ignore their posts. New folks might be put off, but there are a number of reasonable folks that enjoy debating and learning other points of view.

    Thumb up 10 Thumb down 5

  3. Kay Tokerud says:

    It’s funny that people still pretend that our cities and counties are not members of ICLEI, an extreme environmental group whose aim is to implement the United Nation’s Agenda 21 plan. The United Nations is celebrating Agenda 21′s twenty year anniversary in Rio this year and they call it Rio plus 20. The question people should be asking is why our government has kept these facts out of the general public’s view for so long. Maybe they think people won’t like having an international plan pushed onto them. Ya think?

    Redevelopment funds have been used to build the infrastructure and smart growth high density development which is one of the main objectives of agenda 21. Much of this development is now standing empty. The biggest thing built by redevelopment though is a mountain of debt. Over $100 Billion in debt for California alone. By the time all that debt is paid off with our property taxes, most of that so-called smart growth development will be run-down apartment buildings in the center of our cities.

    What they really want is workforce housing attached to workplaces so that people will not need to use cars to get to work. Then wages can be lowered to a level more consistant with international averages. Since there’s no more industrial jobs, most jobs are in retail services having very low wages.

    Live-work human habitations, or warehousing of people in high density urban areas is the plan. Globalization won’t be good for Americans. Look what it has done so far.

    The Republican National Committee just passed a resolution against United Nations Agenda 21 without amendment. But they are all just imagining this, right Lisa? Ron Paul was asked about his position on Agenda 21 on C-Span and guess what? He’s opposed to it. The days of denial are over.

    Thumb up 16 Thumb down 8

  4. Canthisbe says:

    The board should be limited to well thought out, logical comments based on facts supported by references, just like Waltter’s was.

    Thumb up 3 Thumb down 11

  5. NoQuarters says:

    I agree, Well written Kevin
    Maybe the PD could do the same for the following, because they have violated the people’s constitution and used bad science to form more rules and regs
    Then I will consider a subscription
    Hey Moonbeam repeal ab120 and watch the revenues come in and the small towns in the sierras will applauded ya
    Get rid of the Water Resource Board and watch the revenues come in
    Dairies farmers, Hay farmers and Ranchers will be happy
    Get rid of carb and watch the revenues come in
    Get rid of EPA and watch the revenues come in, maybe get a new state of the art refiner, since the ones in Richmond are 60 years old
    Lay off the government admin staff and watch the revenues come in
    Tax the 401c org. and watch the revenues come in

    Thumb up 10 Thumb down 8

  6. ross says:

    if you look at the onebayarea planning the part of santa rosa to be built up (40+residential units and jobs per acre), is from 101 to fulton on both sides of sebastopol road. similar density to the most dense parts of sf. with smart this would also extend around rr square.

    without redevelopment funds development will be more market driven, less government push. zoning and the permit stick will be the ways we guide development.

    posts here are screened only for profanity and coherent content. just look at the unscreened pd forum or the facebook comments on the rest of the pd site. complain all you want. the people who bother to write tend to run to the right. that is if you see the world through a limited bipolar two party understanding.

    Thumb up 9 Thumb down 2

  7. Kirstin says:

    Wallter Bainsmore, you wrote what you wanted to say, right? Well, just a wild guess here but I think other people want the same abiiity to express what is on their minds. Just because you don’t like reading about something doesn’t mean it should be censored. In fact, maybe all the more reason it should be printed.

    Thumb up 14 Thumb down 3

  8. DeeDee says:

    God bless you Jerry Brown for driving a stake through the heart of this civic vampire.

    Thumb up 11 Thumb down 6

  9. Social Dis-Ease says:

    Well folks, today is a special day!
    Martin Luther King’s Birthday.
    My Birthday.
    I got the best present I could EVER hope for.
    The code of silence is broken for good!
    *Opposing United Nations’ Comprehensive Land Use Planning!
    *Support of Protecting American Sovereignty and Defending INDIVIDUAL Second Amendment Rights from United Nations Interference.
    *Calls for the IMMEDIATE and COMPLETE WITHDRAWL of the U.S. from the U.N.!
    There’s more, but you get it.
    Does our Sonoma Co. Board of Supervisors get it?
    Does our City Council get it?
    Does Lisa Maldanado and all of her visious pseudonyms and efforts to discredit us get it?
    Our public officials had a choice to make;
    stand for the people and the oath they took OR stand with globalist oppression.
    I’ve said this day will come, I said we will remember.
    Today is a special day, the start of a new chapter (or remembering our founding ones), a big step.
    It’s OK Lisa, you don’t have to issue a public appology, we don’t care about ‘told ‘ya so’, or being right…

    Too bad they don’t print real news.

    Now where IS my tin foil hat?

    Thumb up 10 Thumb down 8

  10. Billy C says:

    @ Waltter

    I am not a Tea Partyer or a conspiracy guy. I do own Commercial property in the “Gateway” RDA that is also in the “Station Area Plan” ( lucky me )
    I also have served in various political positions. I my quest to figure out just what the heck is going in my area I have meet with many political figures and have done a bit of research.
    As it turn out ICLEI is a real organization and our own supervisor Valery Brown is actually on the international board! Sonoma County
    has recently been recognized by ICLEI
    for completing the 5 steps of compliance with their development model.
    So yes Waltter ICLEI is for real and so is Agenda 21. Perhaps it is just coincidental that we have been doing things “there way”. But to deny they exist is just as foolish as saying they are behind every move.
    I often wonder why the PD has not come out with an article on what ICLEI is all about. Many people in Sonoma County would actually embrace it.

    Thumb up 10 Thumb down 7

  11. Skippy says:

    Some commenters believe that ignorance is not only blissful, but required.
    Anyone without ideological blinders has seen the agents of Big Govt pushing Americans to accept the unacceptable.
    Between illegal invaders, mammoth taxes and crippling regulation we have been squeezed and hectored into an America that bears no resemblance to the one that brought forth the greatest achievements in human history.
    We will not go silently into the good night of collectivist shared misery.
    America will not die with a whimper.
    We fight!
    We fight!
    We fight!

    Thumb up 12 Thumb down 9

  12. Walter:

    Allowing a free exchange of ideas without editing them discredits the paper?

    Censoring makes for better dialogue?

    Like you, I find some of the Agenda21/ICLEI ranters to be over the top.

    Unlike you, I have looked at the UN website, read some of the UN’s Agenda 21 content, and find it disagreeable. A dark conspiracy? No. A misguided attempt at imposing utopia? Probably.

    Also unlike you, I feel the way to treat people with whom you disagree is to debate them, not muzzle them.

    Thumb up 16 Thumb down 5

  13. Waltter Bainsmore says:

    What is the point of the editorial staff allowing all this ICLEI and Agenda 21 nonsense on these boards? If a group of conspiracy theorists is your target audience, then perhaps I could understand but since the rest of us are forced to wade through this ridiculous nincompoopery what possible reason could you have for so offending your sane subscribers. Please, since these deluded Tea Party bloggers are obviously unable to help themselves, do them a favor and help them stop with these ridiculous Agenda 21 theories. You are doing your own paper’s credibility and reputation a severe discredit.

    Thumb up 13 Thumb down 39

  14. Social Dis-Ease says:

    Kevin; thank you for writing a piece that didn’t completely reak of ICLEI spun biased propaganda from beginning to end.
    Now if you’ll just ask City Council
    THE question, you’ll really be of service to your readership…
    Marsha Vas DuPre requested that it be an item on the Council’s Agenda, you should have seen the rest of the Council freak, it was epic, maybe you were there.
    Guess she didn’t get the memo that the subject was to be avoided at ALL cost.
    Could it be that some humility, civil responsibility or her concience took over? A magic spontaneous moment.
    Thank you again for a piece that resembled journalism.

    Thumb up 23 Thumb down 6

  15. Steve Klausner says:

    Thank you Kevin McCallum this was a thorough and well balanced look at RDAs in Sonoma County. Well done.

    That being said, it is with a sigh of relief that I view the list of projects that are losing funding. This is particularly true of the high density Soviet style housing the was planned to surround SMART stations.

    Thumb up 23 Thumb down 5

  16. Dogs Rule says:

    One happy day for the tax payers! Good buy “redevelopment” swindle. You’re done.

    Thumb up 29 Thumb down 4

  17. Lets be Reasonable says:

    @Kevin, nice article. Some of us appreciate a well researched piece.

    Thumb up 21 Thumb down 4

  18. RICHARD says:

    Long-Term Debt. The Agency issued no additional bonds during the year[2011], but it did obtain loans in the amount of $1,135,491 from the City of Santa Rosa.

    Time Limit on Repayment of Debt


    Thumb up 21 Thumb down 5

  19. GAJ says:

    400 redevelopment agencies!!!!!!

    Thumb up 20 Thumb down 5

  20. Jim says:

    It is always amazing at the spin in the media anytime a cent is removed from the government pile. There are hundreds of programs that the government themselves rate at “Poorly performing” but none are ever cut. There is waste on top of waste in every government department but anytime someone suggests looking into streamlining the media lies to the idiot Sheeple.

    Cutting redevelopment is a meaningless step. Since the government is easily 50% over bloated, let’s overshoot to the small side and eliminate 75% and see what may need to be reinstated. Unfortunately, the Sheeple don’t have the brains to fight for this, rather, only a desire for more and more government control and theft of our money.

    Thumb up 16 Thumb down 9

  21. RICHARD says:


    NET………………………. -8 MILLION
    NET ASSETS…………..- 13 MILLION


    Thumb up 23 Thumb down 5

  22. RICHARD says:

    The Redevelopment Agency Annual Housing Activity Report 2011

    total development cost of $18,987,895.
    Total Affordable Units 52

    Thumb up 23 Thumb down 5

  23. Follower says:

    I’m really NOT interested in reading about all the terrible fallout that follows the shutting of the free money faucet.
    How about some articles about all families who have had to do without to pay for this ridiculous Department of Orgy spending!


    Thumb up 53 Thumb down 10

  24. Missy says:

    This is the 6th Op Ed from the PD, we already told you, we’re not interested in getting the Redevelopment Dept back, we’re sick of higher taxes. How many times are you going to print this crap PD? If you can’t find other things to report on maybe the paper should be cut down. I’ll phone the Halifax office in the am about this and the other crap the PD has been spewing against the people of Sonoma County, like the endless shiling for SMART and the Union Thugs that have been intimidating the RepealSMART people.

    And the fact that your reporter Julie Johnson and your paper called people Tea Party Members when in fact Rosa Koire is a Democrat as well as members of SNNC – all Dems.

    You need to stop yourself from making any other “editorials” about this because I will be phoning. Last time I phoned about the PD Halifax decided that you couldn’t work in journalism in any of their areas, which is wrong of course, but you need to STOP what you’re doing and saying about the PEOPLE of Sonoma County.

    Let the people SPEAK! Stop SLAMMING us!

    Thumb up 31 Thumb down 13

  25. Social Dis-Ease says:

    Redevelopment has a lot of baggage that goes with it, the corruption, property rights breaches, the ramifications ‘reverberate’ through the community, especially in commercial areas.
    The premise, the fascist favors that go with redevelopment tears at and undermines real estate values and investment.
    Once you know the facts, there’s so much to resist.
    Dark social engineering is what it’s all about.

    It reduces the whole landscape to a relationship of the RDA’s convenience.
    The folks that have property in redevelopment areas are casualties to ‘the greater good’, which almost by definition is communitarianism.

    It works in conjunction with ICLEI/Smart Growth/Agenda 21. It is municipal, fiscal oppression.
    It is IMPOSSIBLE to grow a free Market economy with redevelopment in place.

    They like to say ‘we rarely use eminent domain’. Well a thief with a gun rarely has to use it either.

    Look, demographically and geographically Santa Rosa should have it goin’ on, even in this economy (an economy whose decline was orchestrated by the same dark cabal behind redevelopment).
    The main reason it doesn’t is because of all this oppressive regulatory, planning, land use crap. All ICLEI.

    Have you noticed the ICLEI model gives an inordinate amount of power to unelected agencies, boards and coalitions?

    Redevelopment, ABAG, Smart Growth, ICLEI, etc., IS Agenda 21.

    It’s a complete plan for complete control.

    Lisa Maldanado, and any other political figures can play the conspiracy wacko card like you always do, but this year even more people are gonna learn why everything is so sabotaged and screwed up.

    There’s a resolution before the Republican National Committee right now that calls for the U.S. to sever it’s ties with the United Nations, citing the catastrophic effects of Agenda 21 on our Country.

    The framework in which we should judge our public officials will become; with this tyranny-or not, period.

    Thumb up 29 Thumb down 14

  26. RICHARD says:

    Thank you Ms Tokerud et al for your selfless act to try to stop Santa Rosa’s gateways redevelopment project. Your efforts probably saved the tax payers millions of dollars by the delay you caused to this project.

    Remember no ‘good-deed’ goes unpunished when it is opposed by the powers that be.

    Thumb up 31 Thumb down 8

  27. Billy C says:

    The ADC and other SMART supporters have long pointed out that Santa Rosa needs to build a “TRANSIT VILLAGE” in order for
    the “SMART TRAIN” to reach its hoped for ridership numbers. It also to needs the protect to get funding from MTC. (ostensibly the main reason for the train in the first place)
    My question.
    The gateways redevelopment area encompassed the areas that where to be converted to ultra high density housing
    what will be the impacts to the conversion with out redevelopment funds?
    What would the over all impact to SMART be?

    Thumb up 22 Thumb down 6

Leave a Reply