| December 29, 2011 Congratulations Redevelopment Fighters! This morning the state Supreme Court issued its ruling on the fate of redevelopment agencies. They ruled to uphold ABX 26, which abolishes redevelopment agencies; they ruled against ABX 27, which would have allowed cities to opt back into redevelopment by paying $1.7 billion to the state this year and $400 million to schools every year after that. This is the absolute victory we have been looking for. Upholding both ABX 26 and ABX 27 would have been good. This is way better. http://www.courtinfo.ca.gov/opinions/documents/S194861.PDF http://blogs.sacbee.com/capitolalertlatest/2011/12/california-high-court-says-state-can-eliminate-redevelopment.html What's next? Earlier this year many cities throughout the state attempted to tie up future redevelopment debt, and thereby keep redevelopment going, by creating "cooperation agreements" between the cities and their local redevelopment agencies for future projects. San Diego created $4.1 billion worth of cooperation agreements. My understanding of ABX 26 is the state reserved the right to challenge these agreements for up to two years. Per legislative staff and Assemblyman Chris Norby, expect a flood of bills in 2012 to try to revive individual redevelopment agencies. They will argue that their redevelopment agency is so special that it must be revived. In fact, one legislator tried this exact thing earlier this year, but it didn't fly. We must maintain constant vigilance for what comes down the line on this front. What does this mean for Grantville redevelopment? With the abolition of the Redevelopment Agency, and even if the cooperation agreements relating to Grantville stand, Grantville redevelopment is essentially defunded. When enacted, Grantville redevelopment was speculated to generate over $600 million in tax increment. Of course, it has not met the projections. The cooperation agreements between the City and the Redevelopment Agency devote $200 million of future tax increment to Grantville. As of now, $31 million of this is still destined to go downtown. The end result is much less redevelopment in Grantville. The great benefit is a lack of funding for eminent domain abuse—the government taking private property for one of their favored developers. This is great news for the cause of Grantville property rights. What does this mean for San Diego? This could be a windfall for San Diego's depleted general fund. Assuming the state successfully challenges the San Diego cooperation agreements, once current redevelopment is paid off, approximately $50 million in local property tax will be going to the City's general fund, instead of the Redevelopment Agency. And given the local RDA has a budget of about $200 million and given that redevelopment derives 40% of its funding by diverting money away from local schools, just think of the benefit for education. If the state is unsuccessful in challenging the cooperation agreements, the City will still focus its redevelopment effort on downtown to the detriment of other communities. As I recall, about $3 billion of the cooperation agreements are reserved for downtown redevelopment. The Spanos family and the Chargers could still get their new downtown stadium. For the benefit of all neighborhoods, let's hope the cooperation agreements do not stand. Thank you to everybody who supported GAG in our legal effort challenging the Grantville settlement agreement. (The appellate court will hear our case early next year.) We know that our effort has helped to spur the way towards redevelopment abolition. Brian T. Peterson, DVM Grantville Action Group, CEO |