PolitiCal

On politics in the Golden State

Category: Redevelopment

Gov. Jerry Brown vetoes replacements for redevelopment agencies

Gov. Jerry Brown vetoes replacements for redevelopment agencies.Having previously ordered the closure of hundreds of redevelopment programs throughout California, Gov. Jerry Brown on Saturday vetoed six bills that would have given  local governments other economic development powers, saying it is too soon to consider alternatives.

The governor and Legislature had acted earlier this year to close redevelopment agencies and have them begin to unwind their finances to increase money available for the state general fund and eliminate its shortfall.

Among the bills rejected were measures by Assembly Speaker John Pérez (D-Los Angeles) and Senate President Pro Tem Darrell Steinberg (D-Sacramento). Pérez’s AB 2144 would have allowed local communities to create "infrastructure and revitalization financing districts" if approved by 55% of voters.

Pérez wanted to expand their powers to more clearly allow them to use property tax money and bond revenue to buy land and build housing and to construct and renovate commercial and industrial buildings.

"Expanding the scope of infrastructure financing districts is premature," Brown wrote in his veto message. "This measure would likely cause cities to focus their efforts on using new tools provided by the measure instead of winding down redevelopment. This would prevent the state from achieving the General Fund savings assumed in this year’s budget."

The veto message was similar for Steinberg’s measure that would have allowed cities to set up "sustainable communities investment authorities" to help the development of neighborhoods near transit hubs with housing and factories that provide equipment for the clean energy industry. That bill is  SB 1156.

Brown liked the idea but wrote in his veto message: "I prefer to take a constructive look at implementing this type of program once the winding down of redevelopment is complete and General Fund savings achieved."

ALSO:

State faces new legal threat to budget

State is on the hunt for redevelopment money

Cities refuse to hand over redevelopment money

-- Patrick McGreevy in Sacramento

Photo: Gov. Jerry Brown. Credit:  Christina House / For The Times

Redevelopment money is a sticking point in budget talks

Gov. Jerry Brown, center, with Assembly Speaker John Pérez, left, and Senate President Pro Tem Darrell Steinberg

Gov. Jerry Brown and Democratic lawmakers are at odds over a small but crucial part of the state budget -- what happens to $250 million that once funded now-defunct redevelopment agencies.

Democrats in the Legislature want to use the money for schools, which would free up other funds for social services. Lawmakers have been scraping for every dollar they can find to help prevent the steeper cuts to welfare, child care and college scholarships that Brown proposed earlier this year.

But Brown administration officials say the money is supposed to go to county governments, siding with the California State Assn. of Counties.

In a letter dated Wednesday, the association said that "California's counties do not have the capacity to absorb the loss of these funds without severe adverse reactions."

The disagreement is the result of different legal interpretations on what to do with property tax revenue that previously went to redevelopment agencies, which are being dissolved this year.

The issue was raised again during a Senate budget committee hearing on Thursday. Michael Cohen, chief deputy director at Brown's Department of Finance, said the administration was “absolutely opposed” to sending the money to schools instead of counties.

Cohen questioned whether “pulling millions of dollars that they’ve relied on is appropriate or necessary.”

It's unclear if the disagreement will lead to an impasse. Senate Budget Chairman Mark Leno (D-San Francisco) said negotiations are ongoing and they're exploring other sources of funding.

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Gov. Brown demands legislators make deeper budget cuts

Democratic lawmakers counter Brown with new budget plan

Jerry Brown's history of rifts with state lawmakers over welfare

-- Chris Megerian in Sacramento

twitter.com/chrismegerian

Photo: Gov. Jerry Brown, center, at a news conference with Assembly Speaker John Pérez, left, and Senate President Pro Tem Darrell Steinberg, right, last year. Credit: Hector Amezcua / Associated Press

California Senate preserves redevelopment money for housing

 Getprev
The day before local redevelopment programs begin shutting down, state lawmakers acted Tuesday to allow cities and counties to build affordable housing using $1.36 billion held for that purpose by agencies that are closing.

The state Senate approved SB 654 and sent it to the Assembly, but Republicans refused to support passing it as an urgency measure, so it will not take effect until Jan. 1, 2013.

"We are delaying the creation of and/or maintenance of some 24,000 high-wage jobs for Californians," complained Senate President Pro Tem Darrell Steinberg (D-Sacramento) when Republicans insisted on voting for it only as a non-urgency measure.

"The time to be concerned about jobs related to redevelopment was before we executed it," responded Senate Republican leader Bob Huff of Diamond Bar, referring to the Legislature’s decision last year to close agencies as part of a state budget solution.

Republicans blocked the bill from taking effect immediately after Democrats shelved a package of last-minute amendments the GOP proposed for redevelopment agencies to make it easier to phase out their operations without financial difficulties.

Steinberg said that if the bill is next approved by the state Assembly, he may insert its language into a trailer bill on the budget so it can still take effect immediately.

RELATED:

Getting real about redevelopment in California

Legislators seek to help cities losing redevelopment agencies

Senate leader says no to extension of redevelopment agencies 

-- Patrick McGreevy in Sacramento

Photo: Redevelopment bill author Sen. Darrell Steinberg, right, during last year's budget talks with Republican Sen. Bob Dutton. Credit: Rich Pedroncelli Associated Press

Senate leader says no to extension of redevelopment agencies

 

Despite stepped-up pressure from redevelopment agencies, state Senate leader Darrell Steinberg (D-Sacramento) said Thursday he does not foresee the Legislature extending the deadline for those agencies to begin shutting down

 

Despite stepped-up pressure from redevelopment agencies, state Senate leader Darrell Steinberg (D-Sacramento) said Thursday he does not foresee the Legislature extending the deadline for those agencies to begin shutting down.

"It's not going to happen," Steinberg said of the chances of SB 659, the extension bill, being approved by Feb. 1, when agencies throughout the state must start shutting down.

The bill by Sen. Alex Padilla (D-Pacoima) would extend the deadline for agencies to begin dissolution to April 15.

On Thursday, the League of California Cities and other groups sent a letter to legislators noting that one ratings agency has downgraded redevelopment bonds, and two other agencies have put them on watch for a possible downgrade.

The extension in the Padilla bill is needed "to provide some breathing room to try and address many of the legal and contractual issues" raised by the forced closing of the agencies, said Bismarck Obando, a spokesman for the league.

But Steinberg said it's highly unlikely the Legislature would approve the measure in time or that Gov. Jerry Brown would sign it. 

"The focus needs to be on re-creating a new set of economic development tools for cities and not on trying to keep alive the current form," he said.

RELATED:

Getting real about redevelopment in California

L.A. assesses cost of shuttering redevelopment agency

Legislators seek to help cities losing redevelopment funds

-- Patrick McGreevy in Sacramento

Photo: State Sen. Alex Padilla, left, and Sen. Darrell Steinberg discuss the state budget in 2011. Credit: Rich Pedroncelli / Associated Press

Brown says he won't delay redevelopment 'funeral'

Gov. Jerry Brown said Thursday that he would oppose legislation to delay the scheduled elimination of more than 400 redevelopment agencies.

The agencies, which build affordable housing and other projects using property tax dollars, were abolished under a bill signed by Brown last year.

Under a compromise, Brown agreed to reconstruct a smaller version of redevelopment, but that deal was thrown out by the state Supreme Court. 

State Sen. Alex Padilla (D-Pacoima) has introduced legislation that would extend the termination date of the agencies from Feb. 1 to April 15, but Brown dismissed that idea Thursday at Los Angeles City Hall.

 "I don't think we can delay this funeral," Brown said. 

-- Anthony York

State lawmakers consider alternative to redevelopment agencies

Cities being forced to shut down redevelopment programs would be able to sell their agencies’ buildings and other assets to finance new economic development efforts under an idea being considered by state lawmakers.

Senate President Pro Tem Darrell Steinberg (D-Sacramento) said Thursday that he is examining the concept of legislation, but would insist on financial reforms. Redevelopment agencies are facing a Feb. 1 deadline to begin dismantling their programs as part of a new state law to solve the state budget crisis.

"This loss for cities can be temporary," Steinberg told reporters. "I believe that there are some real tools with real dollars attached to them that can be used to reconstitute a robust local economic development program for cities and counties."

There are potentially billions of dollars in assets owned by California’s 400 redevelopment agencies, according to Jim Kennedy, interim executive director of the California Redevelopment Assn. He said that what Steinberg describes is similar to what the association is considering, although "it sounds a little more limited."

Without legislation, the money from liquidation of leases, parking lots, buildings and other assets of the state’s local redevelopment agencies would be sent to schools, the state, special districts and other local entities, Steinberg said.

RELATED:

Lobbyists, labor rally to save redevelopment

L.A. assesses cost of shuttering redevelopment agency

L.A. lawmakers vote to discard redevelopment agency

--Patrick McGreevy, reporting from Sacramento

California Supreme Court to hear challenge to redevelopment move

The California Supreme Court agreed Thursday to hear arguments in a lawsuit challenging state action that could lead to many local redevelopment agencies being shut down.

The court issued an order delaying  enforcement of most provisions of the new law until a ruling on the merits of the case, but said redevelopment agencies could not incur new debt, transfer assets, buy property or enter into new contracts in the meantime.

The lawsuit  by redevelopment agencies and cities claims the state violated a voter-approved ballot measure when it acted to dissolve agencies unless they pay $1.7 billion to cover state financial obligations.

The court ordered the state to provide its argument why the change in redevelopment law should stand, and approved an expedited hearing schedule that could result in a decision by Jan. 15.

"We’re very gratified that the California Supreme Court has agreed to take our case, issued the stay we requested to preserve the status quo, and that it is moving forward on an expedited basis," said Chris McKenzie, executive director of the League of California Cities.

-- Patrick McGreevy

Voters OK with ending redevelopment funds, poll shows

Big-city mayors and other local leaders have said that the state’s plan to take funds away from redevelopment agencies will cost jobs and hurt the economy. But those protests don’t appear to be resonating with voters, a new poll shows. 

In a survey by The Times and the USC Dornsife College of Letters, Arts and Sciences, Californians are almost evenly divided on whether the state should take the subsidies away, with 42% in favor and 44% opposed.

But support plummets once respondents are given arguments for and against the measure, which is part of the budget package Gov. Jerry Brown signed into law recently. Then they agree, 50% to 39%, with elimination of government subsidies for companies that redevelop blighted areas.

Supporters of the plan say the subsidies have been misused and eliminating them frees $1.7 billion to help balance the budget. Opponents argue that ending the funding will cost thousands of jobs and threaten construction projects that promise to breathe life into the economy and thus revitalize communities.

Redevelopment boosters are now in court trying to block the state from taking the funds.

Dan Schnur, director of the Jesse M. Unruh Institute of Politics at USC, said the poll reflected skepticism that the subsidies created all the employment that supporters claimed.

“The argument in favor of the measure is a more persuasive one” for voters, he said. “They know the governor and Legislature can cut the budget. They are not confident they can create jobs.”

The survey was conducted for The Times and USC Dornsife by Greenberg Quinlan Rosner Research, a Democratic firm, in conjunction with American Viewpoint, a Republican company. They polled 1,507 registered California voters July 6–17. The margin of sampling error is plus or minus 2.52 percentage points.

-- Evan Halper in Sacramento

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