Part of Gov. Jerry Brown’s budget proposal released this month includes a plan to close the nearly 400 redevelopment agencies statewide, which has city officials in Yorba Linda concerned.
Cities use redevelopment funds to encourage growth in areas of blight, creating new businesses, parks and affordable housing in those areas.
“There is little evidence that redevelopment projects attract business to the state,” the budget reads.
But Yorba Linda city officials feel differently.
“I wouldn’t consider that at all. Redevelopment funds are used to encourage business development,” said Mark Aalders, assistant to the city manager. “You do hire a contractor (for a project). You do affect the economy in one fashion or another.”
Aalders said the city has planned to use $1.2 million in redevelopment funds to renovate signs at the Savi Ranch shopping center, as well as to make Town Center improvements.
The city would consider all its options for its future development projects if redevelopment agencies are indeed closed, including seeking private funding, Aalders said.
“Oftentimes it is used in conjunction with private funding – we say we we’ll offer this amount and then ask those particular businesses to contribute as well,” he said.
Voters approved Proposition 22 last November to prevent the state from taking local revenues in order to balance the state budget.
But the governor’s proposal would close the agencies prior to their funds going to the state.
Aalders said city officials will wait before deciding any plan of action regarding Yorba Linda’s Redevelopment Agency to see whether any groups file lawsuits against the state. “Usually someone out there eventually will commit to a lawsuit, then it’s up to whether the city will get on board,” Aalders said.
John Shirey, executive director of the California Redevelopment Association, said, “It is another gimmick that will likely result in extensive litigation.”
Brown said during his budget press conference that the proposal applies only to new redevelopment projects, not those already contracted out. Under the proposal, redevelopment agencies would be required to close by July 1 and relinquish most funds barring some money that would pay off remaining bond debts.
Yorba Linda’s Redevelopment Agency would lose about $17 million before any obligations to in-progress projects, according to Finance Director Dave Christian.
The proposal includes an alternative to keep development alive in cities, calling for an amendment to the state constitution to allow voters to approve creating bonds with local revenues and tax increases for redevelopment projects with just 55 percent of the vote instead of two-thirds.
