Officials broke ground on Arcata's downtown affordable senior housing project on Tuesday -- a project pushed forward due to concerns about the murky future of the state's redevelopment agencies.
 
The Arcata Community Development Agency -- headed by city council members -- put down the initial funds for the Plaza Point project, located across from the Co-op. The agency handles the city's redevelopment funds, which are intended to help eliminate blight and promote economic growth.
 
”To put $800,000 in was a major commitment by the council,” Community Development Director Larry Oetker said.
 
Gov. Jerry Brown proposed eliminating the approximately 400 redevelopment agencies across the state in his March budget, but local agencies anticipate the May revision of the budget -- slated to be released Monday -- will instead have the state seeking to restructure redevelopment law.
 
Immediately after Brown announced his intention to eliminate the agencies, cities began transferring redevelopment property and tying up agency funds on planned projects, including in Arcata, Eureka and Fortuna. In the first year, Brown had intended to use the $1.7 billion the state would seize from agency closures to pay for health care costs and trial court fees.

Assemblywoman Diane Harkey, R-Dana Point, requested the Legislative Counsel Bureau, a nonpartisan public agency that provides certain legal services to the Legislature, to review Assembly Bill 101 -- which
eliminates redevelopment. While the bureau's recent memo to Harkey did not reject the notion that agencies could be eliminated, it stated the initial $1.7 billion grab did not appear to follow state law that requires property tax revenues be used by local jurisdictions.  
”It is our view that a court would conclude that those property tax revenues, as so used, would be deemed to be apportioned to the state, rather than to the districts within a county as required by (the California constitution),” the memo read.
 
Brown had intended in future years for the funds that would have gone to redevelopment agencies to instead go to local schools.
 
Taking redevelopment funds from local jurisdictions to transfer to the state became more difficult last year when voters approved Proposition 22, which banned the practice. Cities are still responsible for sending funds to the state that the Legislature approved before the election. The Fortuna Redevelopment Agency reported Tuesday that it made its payment of nearly $95,000 that was part of the $2.05 million statewide grab in 2009.
 
“At a time when our local economy is still in recovery, we're once again sending vital local funds that pay for job creation and economic growth instead to solve Sacramento's chronic budget mess,” Fortuna City Manager Duane Rigge said in a statement.
 
Arcata Councilman Mark Wheetley said the League of California Cities and the California Redevelopment Association have protested the closures, and the state appears to instead be looking to restructuring the laws that govern the agencies.
 
”The state appears to be backing off elimination,” Wheetley said.
 
According to State Controller John Chiang's review of 18 agencies earlier this year, more accountability and definition of redevelopment law is sorely needed. The reviewed agencies had no consensus on what a “blighted area” was and they all tracked how many jobs were created differently or not at all, according to the report.
 
”For a government activity which consumes more than $5.5 billion of public resources annually, we should be troubled that there are no objective performance measures demonstrating that taxpayers are receiving optimal return for each invested dollar,” Chiang said in his report.
 
For supporters, there's hope legislators will prevent a full elimination of the agencies by voting for legislation that alters how redevelopment works -- if the governor's May revise continues to call for their eradication.

Those include Senate Bill 286, by Sen. Roderick Wright, D-Inglewood, which would impose changes to increase accountability, limit the size and scope of redevelopment in the state, and allow school districts to retain more property taxes in new redevelopment project areas. Currently, schools receive only a portion of that.