Gov. Brown Threatens Redevelopment Agencies

Calif. Controller John Chiang announced an audit of 18 of the 425-redevelopment agencies in the Golden State.

Calif. Gov. Jerry Brown inheriting a $25 billion budget gap from the Terminator's reign. In January, Brown proposed to shut down the state's redevelopment agencies (RDAs), a plan he says would save the state $1.7 billion.

RDAs help cities fund affordable housing, parks, fire stations, shopping centers and other developments.

Audits

Calif. Controller John Chiang announced an audit of 18 RDAs, representing urban, suburban and rural communities. According to the California Redevelopment Association, the audits will examine how agencies define ''blighted,'' the use of affordable housing funds, the accuracy and compliance of payments to schools, and how much RDA officials, board members and employees are compensated.

RDAs are required to set aside 20 percent of their funding for affordable housing.

Opponents of redevelopment agencies have argued some agencies are lining the pockets of private developers instead of focusing on removing blight.

''The heated debate over whether RDAs are the engines of local economic and job growth or are simply scams providing windfalls to political cronies at the expense of public services has largely been based on anecdotal evidence,'' said Chiang. ''I believe it is important to provide factual, empirical information about how these agencies perform and what they bring to the communities they serve.''

The Birth of RDAs

RDAs were created in the 1940s to revitalize neglected areas. When Proposition 13 passed in California in 1978, it limited the abilities of cities to collect property taxes. Municipalities jumped on the bandwagon to form RDAs. This ''tool'' allowed cities to sell bonds and repay bondholders with what was then ever growing tax revenues derived from increasing property values.

Each year city and county redevelopment agencies in Calif. receive about $5 billion in property taxes to run their projects.

A Fontana, Calif. councilwoman recalls the days when graffiti and trash littered the city's downtown. Many of Fontana's success stories come from redevelopment dollars. More than $40 million went to Fontana Park. Editor's note: see ''Urban Sprawl Finds New Public Space'' www.landscapearchitect.com/research/article/13120 (March 2010 issue).

In Fontana redevelopment also helped pay for a storm drain project, Fire Station 79, Chaffey College campus expansion, refurbishing Center Stage Theatre, Lewis Library, Fontana Community Senior Center and more than 1,000 affordable housing units

''If we lose our economic engine, we lose our future,'' said Fontana Mayor Acquanetta Warren.

A group of mayors, city managers and other officials met to discuss ways to inform the public about RDAs, and with good reason. A recent poll by the Public Policy Institute of California found 63 percent of those polled backed Brown's proposal to dismantle them. However, in November 2010, Californians backed Proposition 22, which banned the state from taking local funds, and that initiative was prompted by Gov. Schwarzenegger taking $2 billion over the last two years of his term from state RDAs.

Some believe this is just Brown's way to get everyone's attention on the budget, but Los Angeles wasted no time in transferring redevelopment money to specific projects to protect those funds.

If the legislature did pass Brown's RDA proposal, lengthy court battles would no doubt ensue and spend many tax dollars.

John Shirey, executive director of the California Redevelopment Association, has called Brown's plan ''unworkable and illegal.''