Price responds to governor’s plan to eliminate redevelopment agencies

While municipalities around the state have publicly denounced the intentions of Gov. Jerry Brown to close redevelopment agencies, many state legislators have chosen not to weigh in on the controversial proposal.

One of Culver City’s representatives in Sacramento, state Sen. Curren Price (D-Culver City), recently spoke to the News on his views on Brown’s much maligned plan.

“Coming from a background in local government, I certainly value the role that redevelopment plays,” the senator, a former Inglewood city councilman, said. “However, in the midst of the severe budget challenges that this state is facing, every program has to be reevaluated and reconsidered in the context of cuts.”

At the annual Martin Luther King Jr. Civil Rights Legacy and Leadership Awards breakfast in Sacramento on Jan. 20, which Price attended, Brown alluded to his plan to divert $1.7 billion to local governments and schools.

“We take from redevelopment and we put $1 billion into schools – that’s a good thing,” the governor said.

Prior to being questioned by the News, Price has addressed the impact that Brown’s proposed budget could have on the economy, education, and economic development, but not specifically on eliminating redevelopment agencies.

“Everything is on the table: education, health, social services and redevelopment. That said, I am not willing to cut redevelopment unless there is going to be an alternative mechanism for cities to use to eliminate blight,” the senator cautioned.

At their Feb. 28 joint meeting, the Culver City City Council and the Redevelopment Agency postponed voting on a resolution to opposed Brown’s proposal to eliminate redevelopment agencies. The governmental bodies, made up of the same members, have vigorously opposed Brown’s plan to abolish the state’s 397 redevelopment agencies as part of his strategy to close a $26 million budget hole, and have been busy trying to safeguard redevelopment dollars in case Brown’s recommendation gains traction in the Legislature.

In a Jan. 22 special meeting, the agency moved to protect several millions of dollars of ongoing redevelopment projects.

“Redevelopment has been a valuable tool for Culver City,” the resolution stated. “There is concern that the elimination of the redevelopment agency would negatively impact Culver City, the municipal bond market and financial markets overall.”

“The city’s short- and long-term growth would absolutely be affected as the funding source for many of the projects that have already been talked about and are in process would disappear,” Chief Financial Officer Jeff Muir told the News after city leaders had taken action on the redevelopment projects. “Long-term, we’d lose millions in property taxes that were coming back to us locally, and the ability to put that towards meaningful public improvements, investments in parking, development agreements, etc.”

At a Culver City Democratic Club meeting last month, City Manager John Nachbar said city officials would do everything that they could legally to protect many of the city’s redevelopment assets. “Redevelopment has been a key tool in Culver City. It’s helped the city prosper, enhanced the quality of life and raised property values,” he told the audience. “We’re doing all that we can to protect our redevelopment revenues.”

Other municipal bodies are also moving to protect redevelopment assets in case Brown’s plan becomes law. The San Diego City Council began considering an agreement with redevelopment officials on the same day that Culver City met on approximately $4 billion worth of projects, including a new stadium for the San Diego Chargers, of the National Football League, as well as street light and sidewalk improvements.

The League of California Cities has joined municipal and county governments in opposing Brown’s proposal. “From a policy standpoint, such a radical proposal makes no sense in a state with unemployment rate of more than 12% (statewide), a monstrous infrastructure deficit and recently passed policies championing more infill development,” the league wrote in a statement issued last month. “Redevelopment, which has been around since the 1950s, is a tool for building things. It builds and improves communities, spurs job growth and taxes, and is the most significant provider of infrastructure, urban development and affordable housing in the state.”

Elected leaders from 10 of the state’s largest cities are proposing an alternative to Brown’s plan. The proposal, which Los Angeles Mayor Antonio Villaraigosa supports, calls for allowing the agencies to divert approximately $200 million a year to the state for 25 years.

Some elected officials take issue with the alternative proposal. Los Angeles County Supervisor Michael Antonovich called the mayor’s counterproposal “loan sharking” and called on Brown and Sacramento lawmakers to ask for additional spending cuts.

“Charging taxpayers an interest rate of nearly 30% steals money from public safety and vital services,” said Antonovich, who noted that, in California, there are usury laws that protect consumers from exorbitant interest rates. “The governor and Legislature must get serious and address the state budget deficit through spending cuts and reforms – not continued borrowing and tax increases, which have led to a $26 billion dollar deficit.”

Supporters of Brown’s plan say that redevelopment agencies have often been used as slush funds for developers, and misused by lawmakers. A Jan. 27 Public Policy Institute of California poll showed that 66% of Californians support the governor’s redevelopment proposal.

State Controller John Chiang has initiated a review of 18 redevelopment agencies to assess how they may impact California’s fiscal future.

“The heated debate over whether (redevelopment agencies) are the engines of local economic and job growth or are simply scams providing windfalls to political cronies at the expense of public services has largely been based on anecdotal evidence,” Chiang said in a statement Jan. 24. “As lawmakers deliberate the governor’s proposal to close (redevelopment agencies) and divert those funds to local schools and public safety agencies, I believe it is important to provide factual, empirical information about how these agencies perform and what they bring to the communities they serve.”

Assistant City Manager Martin Cole said the resolution would be brought before the council and agency at a later date.

Calls for comment to Assemblywoman Holly Mitchell (D-Culver City) were not returned.