Bye-Bye to Redevelopment Agencies

The fate of current and future community improvement projects in Goleta, Santa Barbara, and nearly 400 cities throughout the state are now in limbo, as the California Supreme Court on Thursday ruled that Sacramento can raid the $1.7 billion that local jurisdictions have collected over the decades via their redevelopment agencies (RDAs). The ruling essentially legalized the results of the 2010 election, when voters approved Proposition 22 to eliminate such agencies and redirect the funds to the state’s education budget. It also did away with a later proposal to salvage some of the agencies if they voluntarily paid certain amounts into the state coffers, thereby eliminating the RDAs entirely. Half of the money is supposed to be given to the state by January 15, 2012.

The controversial measure was part of a multifaceted, budget-fixing campaign led by Governor Jerry Brown, buoyed by critiques that RDAs have become bloated since their anti-blight-minded creation in 1945 and are increasingly used to pay for less-than-necessary projects like golf courses and theaters. Said Brown in a press release on Thursday, “Today’s ruling by the California Supreme Court validates a key component of the state budget and guarantees more than a billion dollars of ongoing funding for schools and public safety.”

But representatives of Goleta, Santa Barbara, and most every city in California have argued loudly and repeatedly that RDAs were still critical components of improving infrastructure, fostering business, and enhancing underserved neighborhoods. While the ruling will no doubt hamper redevelopment projects in older cities like Santa Barbara — which has used RDA funding over the decades to revise the downtown shopping corridor, most noticeably with the Paseo Nuevo mall — it will have its biggest impact on younger cities such as Goleta, where RDA funds are just now starting to accrue and be used for basic improvements, not to mention paying for certain staff members and covering other regular expenditures.

“The court’s ruling today on redevelopment agencies deals a devastating blow to Goleta’s Old Town revitalization efforts,” said Goleta’s city manager Dan Singer, who is also the executive director of the city’s RDA. “Whereas communities such as Ventura and Santa Barbara have had the opportunity to truly experience the benefits of redevelopment, Goleta remains in its infancy and will now be unable to realize such benefits. This is a sad day for our Old Town residents and businesses.”

City Councilmember Roger Aceves agreed. “My greatest concern is without the RDA, how can we keep our promises to Old Town?” asked Aceves, who had pressed for a backup plan during the most recent round of budget talks. “We will find a way should council have the will to make needed changes.” Long a neglected commercial and residential neighborhood, Old Town Goleta has been the primary focus of the city’s RDA projects, including plans to better block against flooding, put in new parks, and improve storefronts among other more sweeping redevelopment ideas that have been floated over the years. But as of today, said Aceves, “We have not prepared a plan to take us forward.”

As expected, the California Redevelopment Association (CRA) was disappointed by the news, particularly the court’s decision to eliminate the State Legislature’s proposed means for saving RDAs that voluntarily contributed funds to the state. “Without immediate legislative action to fix this adverse decision, this ruling is a tremendous blow to local job creation and economic advancement,” said CRA board president Julio Fuentes. “The legislative record is abundantly clear that legislators did not intend to abolish redevelopment. We hope to work with state lawmakers to come up with a way to restore redevelopment. ”

Statewide, the decision is also expected to harm affordable housing efforts, according to the Southern California Association of Non-Profit Housing. “Today was a huge blow for all of us in Southern California whether we are developers, employers, or working families,” said the association’s executive director, Paul Zimmerman, in a press release. “The Legislature must now find a new way to address our housing needs. We know this isn’t what the Legislature intended, and but for the sake of our working families — they need to fix it.”

More calls for comment have been put out to City of Santa Barbara officials as well as Assemblymember Das Williams, who was a big proponent of the measure due to its potential for helping education statewide.