Redevelopment - East Palo Alto

No news update yet about East Palo Alto City Council accepting the State redevelopment deal.  Its assumed they will.

Mercury News 7/19/11.  "While many of California's roughly 400 redevelopment agencies have come under fire for straying from their original mission, East Palo Alto's can point to a bustling retail patch along Highway 101 to justify its existence. Where liquor stores and bars once crowded out other small businesses in a blighted landscape once known as Whiskey Gulch now stand three office towers with ground-level shops and restaurants, along with the luxury 200-room Four Seasons Hotel. And on University Avenue east of Highway 101, chain store titans IKEA, Home Depot, Best Buy, Nordstrom Rack and Sports Authority pad city coffers with sales tax revenue. All were made possible by the tools a redevelopment agency wields, according to Council Member Ruben Abrica.

 "We are one of the cities that have benefited from what the state put in place," Abrica told The Daily News. "Without the redevelopment agency, the city would have had a difficult if not impossible task of attracting investment into the city." But the city's progress is now threatened by recently passed state legislation that dismantles redevelopment agencies to redirect their earmarked property tax revenues to local schools, special districts and other local entities. Unless a lawsuit succeeds in overturning the legislation, the only way for redevelopment agencies to remain in business is to accept an offer from the state that some local officials have called a "ransom" -- give the state a sizeable chunk of the tax revenue collected and nobody gets hurt. Tonight, the East Palo Alto City Council is expected to accept the deal, which would require the city and its redevelopment agency to make a $2 million payment this fiscal year and $400,000 annually in subsequent years.
East Palo Alto's redevelopment agency has too much invested in its projects to pull out now, interim finance director Brenda Olwin said, citing future improvements within the Ravenswood Business District as an example. About 368 acres of East Palo Alto are located within the redevelopment agency's project areas, according to city documents."We have things that are happening," Olwin said. "We want to keep going with this."  About 368 acres of East Palo Alto are located within the redevelopment agency's project areas, according to city documents. "We have things that are happening," Olwin said. "We want to keep going with this."

Though still in the planning phase, the Ravenswood/4 Corners plan envisions hundreds of new homes, parks and a community center, as well as new retail, office and industrial space in an area bordered by Tulane Avenue, University Avenue, Weeks Street and San Francisco Bay.  Making the payments will be a stretch, Olwin acknowledged. East Palo Alto's redevelopment agency has about $1.3 million in annual "cash flow," she said, plus about $1.5 million set aside for housing projects. Additional tax revenue generated as a result of the increased values of improved parcels gets reinvested into other redevelopment projects.

Redevelopment agencies frequently invest in property or infrastructure improvements that give developers a financial incentive to build within blighted areas. That doesn't just benefit businesses and builders, Abrica said. New jobs come with redevelopment, and sales tax revenue follows, he noted.  "If it wasn't for that, we might not be able to fully fund our police department," he said. Not every city can afford to opt into the state's redevelopment alternative and many are facing the possibility of seeing their agencies abolished, said Kathy Fairbanks, a spokeswoman for the California Redevelopment Association and the League of California Cities.

The two organizations, along with San Jose and Union City, filed a lawsuit Monday calling the state's two legislative options for redevelopment agencies unconstitutional. They claim the laws violate Proposition 22, passed by voters last year to prevent the state from raiding local tax coffers."

Posted by Kathy Meeh