A Potential Replacement for Redevelopment?

By Alex Matthews

Exclusive CityNews Report from Capitol Weekly

While cash-strapped cities in California are taking the fight for disputed redevelopment funds to the mat, a bill that could revive the lifeless program is still floating through the final weeks of the legislative session. 

Senate Leader Darrell Steinberg’s SB 1 would create entities called the Sustainable Community Investment Authorities to redevelop property to create more efficient transit areas. The legislation modifies Steinberg’s earlier bill SB 1156, which Gov. Brown vetoed last year. At the time, Brown said he wanted to “take a constructive look at the idea,” but said he wanted to wait until “the winding down of redevelopment is complete.”

For Steinberg, with the session set to end Sept. 13, that time has come.

“The bill was vetoed last year in large part because of the fact that the controversy around enforceable obligation when we ended redevelopment was still ever present between the cities and the state, and specifically the Department of Finance,” Steinberg said during an Aug. 14 Assembly hearing.

“There is a big void without redevelopment,” he added. “I think we all recognize that.”

But it remains uncertain whether or not Gov. Brown recognizes that. 

Beyond the existing conflicts that complicate the issue, Brown made it clear last year that he believed it was too soon after the dissolution of redevelopment to restart the program. It’s still unclear whether the changes Steinberg has made to redevelopment agencies -- the Sustainable Community Investment Authorities in his new bill -- are sufficient to overcome the administration’s resistance.

According to Steinberg spokesman Mark Hedlund, the new bill presents redevelopment efforts in a more limited scope than earlier legislation. The focus is to give local governments an incentive only to develop projects that will reduce greenhouse gas emissions in the long term by reducing traffic and car trips and creating walkable urban transit areas. Hedlund added that communities that are still disputing past redevelopment funding would not be eligible to receive the funding from sustainable community investment authorities.

Steinberg’s office has worked with the California State Association of Counties (CSAC) on the bill as well to ensure the establishment of authorities includes local oversight.

“There is a membership requirement to the authorities, so it’s a joint agency authority so there are certainly some checks and balances as well,” said Jean Hurst, a legislative representative for CSAC. “From our perspective the financial impact is dramatic because instead of having revenue moved at the decision of somebody else, we now have a say in the project as well.”

But opponents believe the oversight outlined by the bill is not sufficient to keep the Sustainable Community Investment Authorities in check. While Steinberg’s office has presented the bill as a form of redevelopment that is far more limited in scope, John Gamper of the California Farm Bureau Federation argued that the redevelopment standards established by the bill are actually less narrow than the previous program because there is no requirement for blight.

“We believe that’s going to put a bull’s-eye on farmers land because they’ll need to maximize the size of the increment to make it cancel out,” Gamper said. The amount of tax increment funding available under SB 1 would be far more limited than that which was available under redevelopment previously.

Meanwhile, supporters argue that although the bill does not include a specific definition of blight, the focus on transit areas makes it unlikely that agricultural land could be targeted.

“It’s pretty clear to us that the legislation is directed at urban infill development,” Hurst said. “Our take on it is that this is more about economic development in the urban cores as opposed to sort of unincorporated areas of California or more rural communities.”

Gamper’s opposition was along the lines of the ideological arguments presented by conservative opponents of the bill, that greedy local governments may overstep their bounds to reap the financial rewards of redevelopment and abuse eminent domain.

The California League of Cities, which represents the entities that benefited the most from redevelopment and are still fighting its dissolution, has yet to take a position on the bill. 

Likewise, the administration has yet to take a position on Steinberg’s bill, according to spokesman H.D. Palmer.

“The establishment of additional or new economic development tools at the local level is premature until it’s clearly demonstrated that the local governments are complying with the winding down of redevelopment agencies,” he said.

Palmer added that the dissolution of redevelopment has saved the state over $4 billion so far. While the administration is motivated to reduce greenhouse gas emissions, it is uncertain whether they are willing to sacrifice those fiscal benefits.

Meanwhile, two other proposals in the Legislature likewise seek to change Brown’s mind about redevelopment. 

Sen. Lois Wolk, D-Davis, is carrying SB 33, which focuses on infrastructure finance districts, while Assemblymember Luis Alejo, D-Watsonville, has authored AB 1080, which is similar to SB 1, but focuses on poverty and deterioration rather than transit areas as a standard for determining redevelopment areas. 

According to Dan Carrigg, legislative director for the League, the League supports SB 33 and AB 1080.

“In an ideal world, we would hope the governor would sign a variety of bills,” Carrigg, said. “There’s a difference in where each tool be used that separates [the bills], we’re not against any specific tool.”

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