FROM THE NEWS-LEDGER — JAN 4, 2012 –
By Steve Marschke
West Sacramento’s redevelopment agency – one of the most frequently used tools in the city’s toolbox for promoting growth – will probably close up shop this year.
The California Supreme Court ruled last week that the state is within its rights to abolish local redevelopment agencies. Although the court ruled that a second part of the state’s plan – forcing the agencies to make optional “pay to play” payments for the right to continue to exist – was not legal, the ruling does not appear enough to keep the agencies in business.
Mayor Christopher Cabaldon told the News-Ledger this week that this city has been preparing for just this kind of decision – by trying to protect the local agency’s assets from “fire sale,” and by looking for new tools West Sacramento might use to fill the gap left behind by redevelopment.
“We have the good fortune related to other cities that we were already moving in this direction (when the court decision came out),” said Cabaldon. “99 percent of the other redevelopment agencies in the state are just now grappling with this, and saying ‘what now?’”
Governor Brown signed law shutting down redevelopment agencies as part of an effort to balance the state budget. Part of the law requires local agencies to sell off any property they own and distribute the proceeds to local government districts. That’s been scary for West Sacramento, said Cabaldon, because the local redevelopment agency owned almost 300 properties. Some of those are just small pieces of land, he said, but they might be earmarked for use, for example, in a future road project.
And it has tried to protect other pieces of real estate by transferring them or putting restrictions on their use.
“That way, even if the land is disposed of through a fire sale, it still has rules and covenants saying ‘this property has to be used for a certain public use.’”
Still, a speculator might pick up one of these properties when it’s sold, he said, and could be able to drive a hard bargain if the city needs to buy it back for a road project or similar public use.
Cabaldon appointed a commission – led by Councilman Chris Ledesma – to look for ways to promote development in the future, when redevelopment law is not available. The port may come in handy, he said.
“The port district has several powers and authorities that the redevelopment agencies have,” said Cabaldon. It can issue revenue bonds and assemble property parcels, he said, and “the mission of the port is fairly broad in terms of economic development – it’s not just about maritime commerce.”
The port can’t, though, fill the main hole left by redevelopment law – the ability to use expected future property taxes as collateral for big, up-front development work that makes way for growth.
“It can’t solve the basic issues of tax increment financing,” said the mayor.
State legislators have vowed to create new ways to let cities and counties pursue growth – but Cabaldon said isn’t optimistic that they’ll come up with anything as useful as a redevelopment agency.
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Copyright News-Ledger 2012