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California Supreme Court Abolishes Redevelopment Agencies

Also cuts out the "pay to play" option that would have allowed most agencies to remain in operation.

The California State Supreme Court issued a ruling Thursday, abolishing the state's redevelopment agencies and with them, $1 billion of funding for affordable housing.

The decision means that an estimated 400 redevelopment agencies around California will be eliminated and, unlike previously thought, will not have a chance to "opt in" to the program by paying a fee, the Associated Press is reporting.

Redevelopment agencies provide crucial funding for public infrastructure and affordable housing programs, and have been key to sprucing up neglected neighborhoods. But there has been abuse of the program also, with redevelopment monies sometimes going to fund new golf courses, paying lobbyists, extragavant dinners for city staff and developers and other expenses deemed inappropriate, especially at a time when California is facing a $13 billion shortfall. 

The Supreme Court justified its decision by saying that because the state legislature authorized the creation of redevelopment agencies, it now can eliminate them, calling the move a proper exercise of the legislative power vested in the Legislature by the state constitution.

The Associated Press wrote that:

Thursday's ruling was highly anticipated because it was a key component of balancing the state budget by eliminating redevelopment agencies, which primarily are controlled by cities and counties to promote construction projects and revitalize blighted districts. While the court allowed the state to dissolve redevelopment agencies, the Legislature had intended to keep redevelopment agencies going by requiring payments to schools and other local services.

But the decision means that property taxes in redevelopment zones that previously would have gone to the redevelopment agency, will now be spent on K-12 education, police and other local services, which Gov. Brown argues are more essential.

After the ruling, Housing California, a statewide advocacy organization, issued a statement saying Thursday's decision will result in higher numbers of homeless and more people living in overcrowded and substandard conditions.

"California has one of the most effective and efficient methods for funding public-private partnerships to construct affordable places to live for Californians of modest means," Housing California said in a statement.

"Governor Brown has said that state government needs to focus on "essential services" and Housing California agrees. Other than food and water, there's nothing more 'essential' than having a roof over one's head." 
What do you think about the decision to eliminate redevelopment agencies? How will this impact our community? Sound off in the comments below.

Tina McMillan December 31, 2011 at 07:02 PM
Gail How can the money to repay the bonds come from the RDA at Hamilton when the RDA is being dissolved without exception? If what you mean is that the payment on the bonds will be taken out of money that would otherwise be going to local schools then Novato essentially shot itself in the foot by prematurely issuing bonds against an entity that they knew had a questionable life (the RDA). The city could cut its losses and pay back the bonds now. Moving ahead to build the downtown civic center is criminal behavior when you look at the total cost including bond interest. Especially when we could easily purchase an existing class B building for $4-6 million and use the site in a more prudent fashion. We are not talking about default but about making a critical decision to change course at a time when it needs to happen. A significant portion of the city managers salary is paid out of RDA funds. Where will that be coming from? We don't have the money to spend on a project that does nothing to generate revenue. It is city offices, nothing more. It never should have been handled in this manner to begin with.
Eleanor Sluis January 01, 2012 at 05:15 AM
Tina- I agree that it is in the best interest of Novato to save money and have city offices placed in a building at half the cost of 12-17,000,000 dollars. At the candidate’s orientation meeting, Jason Nutt, Public Works, said that Novato will need money to repair or replace storm drains in the future- that expense needs to be made available to the public because it is a matter of how to pay and save for the future expenses when it becomes budget time. The state needs another 17, 000,000,000 dollars to repair the levies and save the delta from disaster-likewise, the state needs to find ways to pay for this expense. At least, the public is aware that $ millions are needed to fix the levies. Novato, by contrast, does not know what storm drain repairs cost. Instead, the city spends hours on determining where signs will go rather than address needed repairs to the infrastructure. It is a lack of city prioritizing and strategizing on how to pay for future repairs. Also, I agree that public/private partnerships can provide revenue for the city The city will be hard pressed to show a plan that will work without RDA. RDA is dead, long live RDA.
LP January 01, 2012 at 04:54 PM
So does this mean that we have ended the debate for low income housing in Novato? If I understand what I have read Novato will not have the money to push any of these projects forward.
LP January 01, 2012 at 05:06 PM
Do you really think that banks are targeting a certain demographic to make up the hours it harder on them? Banks set up hours to maximize their profit. If people don't come in after 4pm, why stay open? If the customers complained that extra hours were needed and enough business occured then maybve it would happen. Have you ever noticed that branches in a grocery store are open longer then a free standing bank (and on Sundays too).
Don Meixsell January 04, 2012 at 04:56 AM
I believe low income housing is important and certainly has its place. However when they build in or near (or in my case right across the street) developed neighborhoods and drive our home prices down significantly, it realy sucks. I'd be willing to bet that not one county or city person involved in decideing where the housing will be built elected to have the housing built near thier neighborhoods. They live with double standards and wonder why people do not like or trust them.

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