In a blow to advocates of redevelopment, the state Supreme Court upheld an earlier decision by the Legislature to take away nearly $2 billion in redevelopment agency funding on Dec. 29, effectively pulling the curtain on the statewide entities.
“We are in the midst of trying to determine the fallout from the (state) Supreme Court’s decision,” Culver City City Manager John Nachbar told the News hours after learning of the court ruling. “Clearly, redevelopment agencies are finished unless there is some effort by the Legislature and governor to reinstate them.”
Last year, the Legislature voted to eliminate redevelopment agencies after lobbying by Gov. Jerry Brown and other opponents of redevelopment. The governor wants to divert the $1.7 billion from the agencies to school districts and police and fire departments throughout the state.
Municipalities from around the state, including Los Angeles and Culver City, as well as the California Redevelopment Association, contended in a lawsuit that the state lawmakers actions were unconstitutional under Proposition 22.
Prop. 22 is a ballot initiative that was approved by voters Nov. 2, 2010 that amended the state constitution to prevent Sacramento lawmakers from taking away municipal and county revenue, as well money from transit, gasoline and redevelopment agencies.
“This will have a devastating impact on Culver City’s redevelopment efforts including Parcel B, the Washington and National boulevards planned transit-oriented development, the proposed market hall at Washington Boulevard and Centinela Avenue, etc.,” Nachbar said.
The state’s highest court also upheld Assembly Bill IX 26, which authorized the elimination of the agencies and struck down Assembly Bill IX 27, which would have allowed the agencies to continue to operate if their respective cities or counties agreed to make payments to special districts and schools.
The justices dismissed the plantiffs contention that under California’s constitution, redevelopment agencies were exempt from elimination by the Legislature.
“We consider under the state constitution if redevelopment agencies, once created and engaged in redevelopment activities, have a protected right that immunizes them from statutory dissolution by the Legislature; and redevelopment agencies and their sponsoring communities have a protected right not to make payments benefiting schools and special districts as a condition of continued cooperation,” the court wrote. “Answering the first question no, and the second yes, we largely uphold Assembly Bill IX 26 and invalidate Assembly Bill IX 27.”
Chief Financial Officer Jeff Muir said the timing of the ruling was unfortunate, given the fragile state of the national and local economy. “This was the worst possible decision for agencies,” Muir said.
Former Councilman Scott Malsin agreed. “The stakes are extremely high for Culver City. Our redevelopment agency is in the midst of many critical projects that will shape the community for decades to come. Its efforts include directing the future use of agency-owned land in downtown, in the vicinity of the Expo Line station, near Tellefson Park, and at the corner of Washington Boulevard and Centinela Avenue,” Malsin said.
“While it seems unconscionable, apparently the state will take those valuable properties, acquired with local funds and administered by local elected officials away from the people of Culver City.”
State Treasurer Bill Lockyer, in an appearance at a Culver City Chamber of Commerce luncheon on March 3 last year predicted what advocates of redevelopment did not want to hear.
“The redevelopment fight is over,” Lockyer told the audience.
Malsin, who was the Culver City Redevelopment Agency chair before he left office Dec. 12 to protect his health benefits, said the court ruling was a setback to the city’s long-range planning strategy.
“We will not be able to proceed with plans that have been years in the making. The sale of those properties would be handled by appointed ‘successor agencies,’ and the proceeds will go to Sacramento, not to Culver City,” Malsin noted.
Many municipalities, including Culver City, took legislative action last year to protect local assets in the event that Brown’s plan to abolish the agencies, which many cities say are a critical component in combating blight and reinvigorating communities, was successful.
“The Supreme Court decision likely invalidates most of the actions we took to protect certain assets. There may be some legal arguments to make in some instances, but in the main, it is not good,” Nachbar acknowledged.
Malsin, a west Culver City resident who lives several blocks away from the market project at Centinela and Washington, said the potential loss of that development hits especially hard because that important corridor has been blighted for nearly two decades and residents have been patiently waiting for its renewal.
“The market hall project has been embraced by the surrounding neighborhood as the keystone of the exciting rebirth of this part of town,” said Malsin, a former city planning commissioner. “I don’t think it would be an exaggeration to say that area residents would feel devastated if it was killed by the state’s action and the court decision, and all the more so if the state sold it to the highest bidder in a callous process that didn’t recognize the aspirations of the community.”
The California League of Cities indicated that it would seek to work with state legislators to bring back some form of redevelopment.
“Redevelopment is indispensable to cities to spur economic development, create jobs and improve communities. We know legislators recognize that and we hope they’re willing to work with us to reinstate redevelopment,” said executive director Chris McKenzie. “We want to work as partners with state lawmakers to revive this tool in an accountable manner.”
State Sen. Curren Price (D-Culver City) could not be reached for comment.
Nachbar said Culver City would also ask Price and Assemblywoman Holly Mitchell (D- Culver City) to weigh in legislatively on the court’s ruling.
“I’m sure we’ll be appealing to our state legislators to reinstate redevelopment, and it is something we all should do since redevelopment is so important to Culver City,” the city manager said.
Mitchell did not return calls for comment.
