When the California Supreme Court on Thursday issued a ruling that essentially annihilated local redevelopment agencies, it also killed the single-most important economic development tool that more than 400 cities statewide have, city officials said.
With the ruling that the Legislature can eliminate redevelopment agencies, many San Gabriel Valley and Whittier area leaders wonder how their communities are going to move forward with ongoing projects. And they don't know what to do about future plans now left in limbo.

"It puts everything up in the air," West Covina City Manager Andrew Pasmant said. "It's so far-reaching it's amazing."

Once redevelopment agencies are dissolved, city leaders predict that communities will face drastic consequences, including economic disadvantage, decreased revenues, more blighted areas and vacant buildings, elimination of thousands of job opportunities and reduced affordable housing.

"Redevelopment is really the only local tool that cities had to entice businesses in California," Covina City Manager Daryl Parrish said. "Without that we really don't have a tool."

The court also banned a compromise that would have allowed redevelopment agencies to continue operating if they paid a portion of the property taxes they would normally receive to help solve the state's fiscal crisis - what many city officials called a ransom payment.

But now at risk are the sale of the closed Fred C. Nelles Youth Correctional Facility in Whittier, the completion of an eight-unit affordable housing complex in Alhambra, the sale of a 14-acre parcel of land to the Gold Line Construction Authority in Monrovia and other projects that will face long delays before coming to fruition.

Other planned redevelopment projects will simply never get the chance to get off the ground.
Not everyone bemoaned the loss of California's redevelopment agencies, however. Conservative blogger Steven Greenhut of Calwatchdog.com praised Gov. Jerry Brown for pushing the legislation.

"Brown isn't often right," Greenhut wrote Friday, "but he was on target when he proposed shutting down these central planning agencies that primarily dispense corporate welfare to big businesses and drive small property owners off their land so that big-box stores can prosper."

In his post, originally put online Nov. 30 and titled "Court Case Shows GOP Hypocrisy," Greenhut wrote that cities with redevelopment agencies often used eminent domain to reward their cronies.

"In Sacramento recently, a restaurant developer received millions of dollars in subsidies to build a mermaid bar - mermaid-costumed women swim around in a giant fish tank - that caters to lobbyists. How's that for a core government service?" he said.

What it all means

Not all agencies spend on frivolity, Pasmant said.

The elimination of West Covina's redevelopment agency jeopardizes the proposed park-and-ride Foothill Transit center near the Westfield West Covina shopping center and a $40 million, 180-acre golf course and office development planned on a portion of the former BKK Landfill site - the city's biggest redevelopment project.

West Covina followed in the footsteps of many other municipalities, which signed previous agreements preserving their right to continue with their developments.
Still, Pasmant said the city lacks the cash flow to fully develop a transit center or golf course, which would complete the landfill's transformation, complementing the Big League Dreams Sports Park and The Heights commercial shopping center.

"I'm sure everyone is going to go back to the table and see what this all means," Pasmant said. "It's going to create a lot of uncertainty and litigation at a time when we desperately need jobs."

In Covina, plans to rehab long-vacant properties, like the old Clippinger auto site, are probably dead, Parrish said.

The city is set to develop a $1.3 million Covina-Valley Unified School District Industrial Arts Center, but the validity of an agreement signed to ensure its development may be in question, he said.

"That's something we'd like to see move forward," Parrish said. "It's an investment in the future of the community."

Incoming Whittier City Manager Jeff Collier said the Whittwood Town Center, the biggest shopping center in town, was realized through redevelopment seven years ago.

"The ability to do those projects is no longer there. Those were significant in moving the community forward," he said. "We have a number of projects that are significantly in question and are likely to go away and that's very sad."

Gold Line issues

One such project includes the state's sale of the 73.8-acre Nelles correctional facility, which was contingent on redevelopment money.

The court's ruling also raises questions about how to carry out massive projects like the Gold Line Foothill Extension project, planned from Pasadena to Azusa.

Arcadia, which plans to construct a transit plaza, has received some grant money from Metro for such improvements that requires matching redevelopment funds, City Manager Don Penman said.

Monrovia Interim City Manager Mark Alvarado said he's hopeful the Monrovia City Council - acting as the redevelopment agency's successor agency - could still move forward on the land deal and other existing redevelopment projects as the state has indicated would be possible.

The city has also been working with lobbyists to draft special legislation that would allow the sale of 14 acres for the Gold Line maintenance yard to be excluded from the new terms since the project would benefit various agencies, he said.

In Alhambra, Fremont Plaza, a major redevelopment project, is home to stores like Albertsons and Toys R Us, but is still filled with vacancies that can't be filled or sold, said Julio Fuentes, city manager and CRA board president-elect.

"There are a number of significant developers that are looking at purchasing that property, but are they going to be able to do that without the redevelopment agency's help?" Fuentes asked. "You're going to have that same building remain vacant forever and without a redevelopment agency, it will stay like that until the private sector decides to develop it - if they even try to develop it at all."

In El Monte, pending projects include the El Monte Gateway, a village of homes and businesses surrounding the El Monte Transit Station. Although the city is still in the early planning stages, the redevelopment agency has attempted to develop the area for years.

Likely to be impacted in Pasadena are the rehabilitation of the historic YWCA building and restoration of the historic Civic Auditorium ballroom.

A hit to housing

Also in trouble is affordable housing for seniors and families.

Under state law, affordable housing is supposed to be funded with 20 percent of all redevelopment tax increment revenue cities receive. But with no redevelopment in the foreseeable future, city officials are not sure what the next step is.

"It doesn't look good," Azusa's Interim City Manager James Makshanoff said.

Azusa's plan for veteran-oriented affordable housing in an area known as Atlantis Gardens could be history. Atlantis Gardens was once known as a locus of gang violence and drug use, but the city through its redevelopment agency began buying up apartment buildings in the neighborhood with the intention of turning the land over to a nonprofit home developer.

"We're still evaluating the impact to see how it's going to affect us and how we are going to move forward with some of the projects we had in the pipeline," Makshanoff said. "There's still a lot of variables out there to be determined."

Alhambra's Howard Street Town Homes affordable housing complex is nearly 90 percent complete. Officials were set to open a lottery today for 30 low-income residents. It has now been stopped in its tracks because the land is owned by the redevelopment agency, officials said.

"That was to accommodate first-time, low-income home buyers who qualified for those homes," Councilwoman Barbara Messina said. "It means a lot to a lot of families, and we don't know what's going to happen."

Also likely to be stalled is a proposed eight-unit, low-income housing project in Whittier that also would serve as a location for Whittier College's Guilford Hall, Collier said. The $4.3 million project would have been funded with $1.3 million in redevelopment money.

More lost jobs seen

And while the court's decision will have the biggest impact on planned projects, it also will increase unemployment, city officials said.

As these agencies are phased out over time, it will ultimately result in massive city employee layoffs and decreased staffing levels. In West Covina alone, officials estimate that between 40 and 60 employees will be laid off.

"As of Monday, I don't know how they'll get paid," Mayor Mike Touhey said. "I can't picture anyone surviving and that's very sad. Everyone in the redevelopment agency is probably no longer employed and it's a very sad day for them."

Greenhut said the end of redevelopment means cities will no longer be able to pay for other items as well.

"They have to find some way to fund those lush city manager salaries and police pensions," Greenhut wrote. "(Redevelopment) may be pro-business in a way, but it's the sort of anti-market, bailout, subsidy-driven philosophy that is angering Tea Partiers and Occupiers alike."

Still, some legislators have said they do not want agencies totally eliminated. They will meet this month to discuss the next step.

"Even though the court has ruled, there's still a lot of detail that needs to be worked out," Parrish said. "I'm not sure if we've heard the last of this. Before we say anything is dead, we're going to wait to see how everything moves over the next couple of months as things happen."