Will Davis’ Pass-Through Agreement Now Be At Risk?
In Davis, the redevelopment area, a funding mechanism ostensibly put into play to eliminate blight in the downtown Core, Olive Drive and South Davis, encompasses around a quarter of the city’s property tax revenue. In recent years the city council has looked to the redevelopment agency to fund a variety of projects in the reuse of the Historic City Hall and what has become Bistro 33 and now the expansion of the Varsity Theater. The council who also sit as board members of the redevelopment agency were hoping to use redevelopment money for a number of economic redevelopment projects including a downtown parking center on E and F between 3rd and 4th.
During last week’s city council meeting, Paul Navazio suggested that this kind of decision, if allowed to stand by higher courts, could mean the end of redevelopment in California. Without the redevelopment agency, the city would find it difficult to finance the kind of core area projects that they have been discussing for several years.
The Contra Costa Times in an editorial Monday called the decision “a damaging roadblock… placed on California’s path toward responsible budgeting and economic recovery.”
The editorial goes on to point out:
“A year ago, Connelly ruled against a similar raid on local redevelopment funds. But this time around, lawmakers mandated that the money would have to help students within the redevelopment agency boundaries.
This change was sufficient to win Connelly’s approval. He wrote that the state could use the money to help support schools located within redevelopment agency boundaries because it served a public purpose.
Unfortunately, the ruling is so broad that it undermines the whole concept of redevelopment agencies. If the decision stands, redevelopment agencies no longer would be able to rely on extra incremental property taxes to finance public works projects.
Also, many redevelopment districts in the state do not have schools or many students within their boundaries. One wonders how redevelopment funds in those districts can be fairly distributed to education.”
According to their view, redevelopment is part of the engine out of recession by providing money for projects that will ultimately hire thousands for construction, one of the industries hardest hit by the current recession.
“However, raiding redevelopment funds also undermines the governor’s stated goal of creating jobs in California to help revive the state’s economy.
Taking money away from a host of projects that are already under way or in the final planning stages is shortsighted and a poor way to try to balance a state budget.
Redevelopment stimulates billions of dollars in economic activity and supports thousands of jobs, mostly in construction, one of the hardest-hit areas during the current recession.”
The Contra Costa times believes that the likely result will be the loss of thousands of jobs along with the income and tax revenue that they would have produced not only for local entities but the state itself.
On Friday, the candidates for Davis City Council, two of whom may have to deal with a post-redevelopment world weighed in on the issue and how would the city have to make up for the loss of redevelopment money or the entire redevelopment agency.
Jon Li, not one to mince words, declared flat out that redevelopment as an idea is about to disappear.
He suggested we need to do a complete reassessment about what the government should be doing locally in the city. “We lost a department on Tuesday night. We’re changing radically as a city and that just happened at the announcement of the city manager. I’m sure the discussion has happened somewhere. But I don’t think it’s happening in a way that most people that care about how the city works understand that we’re a completely different place than we were a week ago.” He concluded, “there are blocks of money that we’ve been counting on that are going to disappear.”
However, Joe Krovoza was less pessimistic arguing that this was hardly the first time that the state had attempted to get redevelopment funds and each time in the past the courts have denied them the opportunity. He thinks the Superior Court decision may not stand since he does not see the reasoning why it would be okay this time, but not before. “It’s not a done deal yet,” he said.
Rochelle Swanson was also a bit more optimistic looking toward appeals of the decision as well as a November ballot measure to protect local funding sources. Ms. Swanson said that the California Redevelopment Agency is trying to do a stay on the decision while they appeal the case. The other good news she said, is the ballot proposition in November would protect local funds. Locally she said, “I think it’s important that projects that we have in the works, now that we’re looking at using redevelopment money, even if that does get stayed and we end up going through waiting for an appeal, we need to be cautious that we’re not spending that money even if it’s sitting in the coffers.”
Sydney Vergis talked about the impact both on business and the pass-through agreement. “Well the state swooping in and taking three million dollars from our redevelopment money is quite serious,” she said. “Redevelopment money is meant to be spent to keep local businesses in business, to help preserve local jobs, to help to provide for affordable housing options.”
She pointed out our pass through agreement, the money we give the county not to develop on Davis’ borders, comes from the redevelopment fund as well. She cited Paul Navazio as suggesting that this might end redevelopment as we know it. She called this a serious issue and recent issue, “For that reason I’m really focusing on trying to figure out what remains of our redevelopment agency, but how can we help now through policy, through land use policy, really help support our downtown businesses and neighborhood shopping centers.“
Is this really the end of redevelopment? That is hard to say. What we do know is that the state is now beginning to transfer its fiscal burden from the state level to local governments that have been hit hardest by the current economic downturn and many of whom were struggling even before. Going after redevelopment money is self-defeating as it was the engine of renewal in California, of rebuilding urban blight in the core of cities and putting people to work.
In Davis, it’s nearly a quarter of our property tax base and the funding source that grants us autonomy from county encroachment on our borders.
—David M. Greenwald reporting