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Officials vow to work with Legislature on redevelopment reboot

December 29, 2011 | 12:51 pm

The California Redevelopment Assn. and the League of California Cities said they want to work with state legislators to develop a plan to revive redevelopment agencies, which would be eliminated under a state Supreme Court ruling issued Thursday.

“Without immediate legislative action to fix this adverse decision, this ruling is a tremendous blow to local job creation and economic advancement,” CRA Board President Julio Fuentes said in a prepared statement. “We hope to work with state lawmakers to come up with a way to restore redevelopment.”

Los Angeles City Councilman Tony Cardenas, in a prepared statement, called the court’s decision “a major blow to the City of Los Angeles and its ability to recover from this economic recession."

"There was definitely a need to look at improvements in redevelopment, but this decision goes too far,” Cardenas said. “Having grown up in Pacoima, I've seen first-hand the impact blight has on a community, and I've also been able to watch how a community can be revitalized with the right kind of redevelopment, like what we've seen with Pacoima Plaza, the NoHo Arts District and Bunker Hill."

Affordable housing, which relies heavily on redevelopment funding, is also expected to take a big blow, advocates said.

"I can't see how this won't result in more people becoming homeless," said Paul Zimmerman,  executive director of the Southern California Assn. of Nonprofit Housing.

Redevelopment agencies generate about $1 billion a year for affordable housing, the largest local source of such funds in the state, and Zimmerman said he "watched it disappear" with Thursday’s court ruling.

But Gov. Jerry Brown, who first proposed eliminating redevelopment to help solve the state’s fiscal crisis, expressed satisfaction, saying the ruling “validates a key component of the state budget and guarantees more than a billion dollars of ongoing funding for schools and public safety.”

The California Supreme Court ruled that the state acted legally when it abolished more than 400 redevelopment agencies to help close a budget gap but overstepped the law by permitting some of the agencies to survive if they shared their property tax revenue.

The ruling was a major blow to redevelopment agencies, authorized by law since 1945  and responsible for the creation of such neighborhoods as Old Pasadena and  San Diego's Gaslamp Quarter, and a victory for state officials grappling with budget shortfalls.

It came in response to lawsuits filed by the redevelopment agencies.

Redevelopment agencies sued the state to overturn both the law that ended redevelopment and a compromise measure that would have permitted some agencies to continue as long as they shared their revenue.

Redevelopment agencies permit cities and counties to carve out blighted neighborhoods for improvement through partnerships with private developers. The agencies can obtain property by eminent domain, purchase or lease, and use a portion of property taxes to help pay for improvements.

Redevelopment proponents say they have created jobs and bustling neighborhoods. Critics contend they have starved schools and the state of scarce tax revenue and in some cases invested the public’s  money foolishly.

Redevelopment agencies became fodder in the budget battle because their growth has led to their control of a larger percentage of tax revenue.

— Jessica Garrison, Anthony York, Maura Dolan and David Zahniser