With the elimination of redevelopment agencies - the preeminent financing tool for local economic development in California - Inland Empire officials are just beginning to discuss how to make do without them.
Rancho Cucamonga Mayor Dennis Michael said he'll be part of a task force that involves the elected officials and staff members from member agencies within the California League of Cities and the California Redevelopment Association, in order to come up with ideas on how to move forward without the former redevelopment agencies.
"We'll be looking into the next generation of economic development tools," said Michael, who will meet with the group this week. "The purpose of the task force will be to explore recommendations to the Legislature that would be essential not only for local government but for the state of California to remain economically viable."
Redevelopment agencies, through the use of property tax increment revenue, were able to buy land and float bonds for major projects without having to ask voter permission to do so. The tax increment refers to additional taxes generated by a redevelopment-related project.
With these agencies, local officials in partnership with developers were able to finance major projects such as Victoria Gardens, Ontario Mills, some of the rehabilitation of the historic Fox Theatre in Pomona, regional storm drains, and affordable housing for the poor and seniors throughout the Inland Empire.
Michael said it was time to move forward on the path ahead.
"Continuing to argue with one another, filing litigation and challenging one another on the decision is in the past," Michael said. "Let's move forward and look for a new day. We're all here to make sure the state of California remains the Golden State and we have to move forward in a positive manner to make sure we have the tools for economic development, infrastructure, housing, and for job creation. Those are the four critical elements we've lost."
Jim Kennedy, executive director of the California Redevelopment Association, and other experts said it will be tougher for successor agencies to raise money for projects.
"I know a number of cities have given serious thought to doing what they can with their own resources, not be beholden to the state for authority, and come up with creative ideas on their own, whether it's the use of their own general fund revenues, or a variety of financing districts that they have the authority to create," Kennedy said. "I think it's going to end up having people start giving a lot of serious consideration to tools that have been there a long time and not utilized as pervasively because they're not as effective. In the absence of RDAs, they rise on the feasibility list."
Rancho Cucamonga City Manager John Gillison said the idea is to re-establish a financing tool similar to the original tax increment funding mechanism in place for redevelopment since the 1950s, but there are no real specifics yet on how that might work.
"The conversation on what might take its place is at the very beginning phase," Gillison said. "It has to be statewide. Cities don't have other options. We can't do it on our own. It has to be authorized in the law."
In San Bernardino, redevelopment will be folded into city responsibilities, according to Jim Mulvihill, a redevelopment agency expert and professor of geography and environmental studies at Cal State San Bernardino. Mulvihill expects this to be the case throughout the state, with California cities creating new departments to handle the function of economic redevelopment.
"Ultimately, I just see the present economic development organizations being folded into being a department of city government," Mulvihill said. "Cities like San Bernardino are always going to need to be able to sell the city to developers, to get jobs and to promotes sales tax."
Redevelopment essentially took over a lot of the functions that cities provided anyway, Mulvihill said.
Policymakers throughout the state aren't the only ones having to shift gears in the wake of the elimination of redevelopment agencies. The major project for political science professor Jason Neidleman's class has been for students to go to city hall and learn what they can about redevelopment agencies.
Now he must change his syllabus to ask students to find out what they can about how city managers will make do without them.
"You hear a lot of stories about California redevelopment agencies being abused to advance the agenda of the downtown elite, but more often than not, CRAs are used for their expressed purpose, which is to address blight, serve underrepresented communities, and maybe, more importantly than anything else, provide affordable housing in regions where there isn't enough."
Gov. Jerry Brown and the majority Democrats in Sacramento decided to do away with the state's redevelopment agencies this year in order to divert property tax funds to schools and public services as the state faces major budget shortfalls.
Local officials have derided the decision because issues of borrowed money and remaining revenue for existing projects remain unresolved. Regional leaders say they now lose the ability to finance major development projects, attract businesses and create jobs.
Proposed legislation in Sacramento seeks to retain remaining funds for affordable housing.
Assemblywoman Norma Torres, D-Chino, expects the proposed legislation, from Assembly Speaker John P rez, and Senate Pro Tem Darrell Steinberg, to be heard through the Assembly Committee on Housing and Community Development sometime within the next month.
Both pieces of legislation, SB 654 and AB 1585, would allow $1.4 billion remaining in tax revenue, set aside for low and moderate income housing, to be used toward such projects.
Torres said she's receptive to the plan.
Ed Starr, Montclair city manager, said AB 1585 goes further than 654, in that it helps successor agencies to the former redevelopment agencies take care of existing contracts. Starr said the legislation would have to be passed as an urgency ordinance, with action needed soon before contract disputes and financing become more of an issue.
SB 986, which was recently introduced by state Sen. Bob Dutton, R-Rancho Cucamonga, also aims to close up unresolved bond issues. Under the law that shuts down redevelopment agencies, officials said they might have to be forced to write off money spent, and return borrowed money, which puts existing projects at risk.
Such projects in Rancho Cucamonga include an I-15 interchange project at Base Line Road, widening of Foothill Boulevard and storm drain work.
"Unfortunately, when the governor decided to end redevelopment, it was very disruptive and frankly you create a whole bunch more problems than what you're trying to solve," Dutton said. "My bill would provide clarity and would provide the ability to complete projects in the works, without litigation."
Reach Neilvia email, call him at 909-483-9356, or find him on Twitter@InlandGov.
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