Shutting down Redevelopment Agencies in Santa Clara and San Mateo counties

Excerpts from Silicon Valley Mercury News/Tracy Seipel, 1/22/12. 

Redevelopment area - Fairmont Hotel

"San Jose's storied redevelopment agency -- the state's second largest as measured by property tax revenue -- will end on Feb. 1 with a whimper, not a bang. Even before last summer, when the state Legislature signed off on Gov. Jerry Brown's proposal to shut down all of the state's agencies and divert their funding to pay for schools and local government services, the city's redevelopment agency had axed dozens of positions. Its history of issuing too much debt, recent plunging local property tax assessments and continued cash grabs by the state had prompted those cuts, beginning in late 2009. While that inadvertently helped to dull some of the pain here, other cities are feeling the impact all at once.

...Over the decades in San Jose, the agency financed such downtown marquee projects as the Fairmont Hotel, the HP Pavilion and the convention center. Now, its revenues will just cover the cost of the agency's remaining staff salaries, a handful of projects already approved, and payments on its massive $3.8 billion of debt.... 

Same area - before Redevelopment

...The state Legislature created redevelopment in 1945 to eradicate blight that hampers economic development in a community. When a blighted area with low property value is developed, its property value increases and the difference, called "tax increment,'' is collected by the agencies. That money is used to issue debt to pay for the next redevelopment project, a process that's helped agencies finance major civic projects, affordable housing, community centers and business and neighborhood improvements."....  Read much more.

Reference.  Improving a city through Redevelopment, a comparison:         

San Jose 1975 and 2006.

Posted by Kathy Meeh