Planning for the future - redevelopment agency continuation

In San Mateo County active agencies - Millbrae.  Pacifica not mentioned in the article.

From The Daily Journal, 8/1/11.  "California cities with redevelopment agencies are faced with a tough decision: Disband and forfeit property or make large payments to counties and school districts to continue.  In June, two state bills, Assembly Bill X1 26 and Assembly Bill X1 27, were approved to help bridge the state budget gap. The legislation disbanded the agencies altogether and set up new governance for communities that wish to continue redevelopment activities.  Millbrae may be the first in San Mateo County to consider making a choice. “There’s not really a lot of options,” said Mayor Dan Quigg. Under one option, the city loses what it has worked for and in the other it makes a large payment but can keep working on redevelopment projects, he said. Millbrae seems to be leaning toward the latter. The City Council will hold a special meeting on the topic today.

Under Assembly Bill X1 26, a city’s redevelopment agency would cease to exist Oct. 1. The city can continue to make scheduled payments and honor obligations, but that most likely won’t include the massive contracts pushed through city councils this spring. In addition, after the dissolution, the agency’s assets would be reviewed and possibly sold. Proceeds from any sale would go to the county which would send it to schools and other agencies, Millbrae Community Development Director Farhad Mortazavi wrote in a staff report.

Under Assembly Bill X1 27, the redevelopment agency would agree to make large payments to the county and schools but can use the remaining funds to continue working, Mortazavi wrote. The state is expected to issue the exact amount of the expected payments by Aug. 1. Until then, Millbrae is estimating being required to make a $1.85 million payment in this fiscal year and a $435,849 payment in the next. After such payments, the agency would have about $1.3 million remaining, Mortazavi wrote. Millbrae is considering making the payments as it would allow the city to continue working on affordable housing projects and new construction in the area around the train station.

Redevelopment agencies were started in 1945 under the California Community Redevelopment Act to give local government the tools to address blight, degraded buildings and lack of housing, according to the California Redevelopment Association. Now known as the Community Redevelopment Law, it was revised in 1993 to restrict the focus of activities to occur in predominately urbanized area on previously or currently developed properties. Redevelopment agencies are funded through tax money but do not levy taxes. When a run-down neighborhood is revamped, the property values increase. The increase in property tax collected, called tax increment, then goes to the respective redevelopment agency.

Today, there are 397 active redevelopment agencies in California. Many cities in San Mateo County — South San Francisco, San Bruno, San Mateo, Belmont, Foster City, San Carlos and Redwood City — have redevelopment agencies. Like Millbrae, many of those districts passed plans this spring in hopes of putting contracts in place that would be honored. Each will soon need to decide which state option they will follow.  The decision may be in place for only a short period of time since the League of California Cities plans to file a petition invalidating the legislation disbanding redevelopment agencies."

Posted by Kathy Meeh