Riverside Press Enterprise: Inland cities paying into redevelopment fund

REGION: Inland cities will ante up for redevelopment

BY DUANE W. GANG
STAFF WRITER, RIVERSIDE PRESS ENTERPRISE

10:00 PM PDT on Sunday, September 4, 2011

 
Inland cities hope they prevail before the California Supreme Court and save redevelopment without paying the state millions of dollars.

But in the meantime, they aren't risking it.

Most cities in the region have already taken votes to participate in a new voluntary redevelopment program and make payments to the state.

"I would like to remove the word 'voluntary' and put 'ransom' in there," Lake Elsinore Councilman Brian Tisdale said when the council voted to participate.

"This is a bad deal," he said at an August council meeting. "It is unfortunate that we were pushed into this position."

Under budget legislation signed in June, cities and counties statewide collectively must pay $1.7 billion to the state this year to save their redevelopment agencies. The money will help balance the state's $86 billion general fund budget.

If they don't pay, their agencies -- which keep a share of an area's property tax revenue to fund everything from roadwork to community centers -- will cease to exist and the revenue will go to the state instead.

Ever since Gov. Jerry Brown first proposed eliminating redevelopment in January, local officials have fought to save the program. They have organized to lobby against the changes, held news conferences and touted what they see as redevelopment's success in helping fund community improvements.

In July, the League of California Cities, the California Redevelopment Association and two Bay Area cities sued the state to prevent the legislation from taking effect Oct. 1.

The California Supreme Court last month agreed to hear the case. Until the court rules, the state is prevented from moving ahead with the plan to eliminate the agencies. The agencies cannot take on any new debt to fund future projects.

The court is likely to hear arguments after the Oct. 7 deadline for legal briefs and expects to make a ruling by mid-January.

$350 MILLION at STAKE

In the meantime, cities across the region are making arrangements to keep their redevelopment agencies, just in case the court rules against them.

Cities must adopt ordinances to participate in the voluntary redevelopment program.

Collectively, redevelopment agencies in Riverside and San Bernardino counties would have to pay more than $350 million to the state this fiscal year in order to participate in the voluntary program and keep their redevelopment programs afloat.

Riverside City Councilman Mike Gardner said making arrangements for the payment preserves redevelopment as a future option.

"We felt we had to do it," he said in a telephone interview Wednesday.

By not participating in the voluntary program, the city runs the risk of losing redevelopment altogether if the court upholds the constitutionality of the legislation.

"That was not an acceptable risk," Gardner said.
Barry Foster, Moreno Valley's economic development director, recently told that City Council that adopting the ordinance is a prudent move.

"I think everybody still believes the state's action is not constitutional," Foster said. "But I guess we will see what the California Supreme Court has to say about that. Hopefully, we prevail."

Moreno Valley wasn't taking any chances. Like other cities, the ordinance council members adopted included language that voids the measure if the court overturns the state law. The ordinance also specifies that the council is adopting the measure under protest.

Among area cities, Temecula is one of the few with a redevelopment agency that as of last week had not taken any formal action. Temecula is appealing the $4.7 million the state Department of Finance contends it owes to participate in the new program.