Redevelopment advocates may look back on 2009 as the golden age of fighting blight.

The California Redevelopment Association Awards of Excellence in May celebrated eight projects around the state that might not have seen the light of day if they had been planned in light of the state’s decision to take $2 billion in local redevelopment funds over two years.

Starting with the transformational $41 million Springs Shopping Center in Palm Springs, the awards honored projects and agencies that turned dark holes in the community into gleaming assets.

In the case of Palm Springs, the Redevelopment  Agency transformed an abandoned sewage treatment plant and landfill into a 4000,000 square-foot commercial retail space. The landfill closed in 1960 and remained a pit filled with World War II-era waste and household waste.

“We worked for 15 years to find a way to develop the property and it took five years to actually get the project done,” recalls Palm Spring Redevelopment Coordinator Diana Shay.

Like most redevelopment projects, this one leveraged the public investment so private investors – in this instance the Charles Company – could be successful. That included paying for remediation, including excavating 50 feet of sludge and relocating 600,000 cubic yards of landfill materials.

“Instead of a useless piece of land we were liable for, we now have a commercial property that generates taxes,” says Shay.

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Most redevelopment projects are funded a combination of six or seven layers of financing, explains California Redevelopment Association Executive Director John Shirey.

Redevelopment is often the first and/or last layer that brings in the federal and private funds. Without that ingredient, the project often doesn’t work. Then those federal and private dollars get left on the table.

“We probably wouldn’t be able to do a project of that size now,” Shay says. Between the depressed market and the $4 million hit the Agency anticipates taking from the state this year, she says the agency had to revise back their implementation plan to fit the new reality.

A few affordable housing programs and a business development grant program will probably be the extent of what is possible in 2010, Shay says.

Other award-winning projects included a half-billion Napa Riverfront Rebirth, the $86 million Fox Oakland Theater Renovation, the creation of a 2.85-mile Centennial Way Park above the BART tube in South San Francisco, and the creation of the Tannery Artists Lofts in Santa Cruz.

A special award was given to a project being called the Miracle on Divisadero Street, a $350 million expansion of the Fresno Community Regional Medical Center. The Fresno Redevelopment Agency partnered with the city, county and University of San Francisco Medical Program to make the project pencil. The result is the region’s only burn and Level 1 Trauma Center and a safety net for indigent residents. It led to hundreds of thousands of dollars of private investment in the surrounding area for new medical buildings, professional and commercial offices in addition to retail stores and restaurants. It also resulted in the hiring of 1,000 new employees.

By state mandate, at least 20 percent of Redevelopment funds go to affordable housing projects. This was the case for an award-winning project in Rialto called Citrus Grove, 152 apartments for very low- and low-income families.

In San Jose, the award-winning Gish Family Apartments incorporated sustainability components such as solar panes, and transit-oriented features into a multifamily project for very-low income and developmentally-disabled residents on a former gas station site.

Not many agencies are in a position to make the investments that result in those sorts of projects this year. A lot of Agencies are in hunker down mode, according to Shirey.  He estimates California redevelopment agencies will lose $1.7 billion in May of 2010 and $350 million in May 2011.

A member survey by CRA showed agencies are canceling and delaying hundreds of projects. Some are losing a third of their budgets and a portion of the funds they have left are already committed to debt service.

“There really is no other source to keep projects going,” Shirey says.

Agencies who did win American Recovery and Redevelopment Act funds are running out.  Host cities are already hurting so often there is no chance of backfilling the funds with city dollars. The state has not promised to pay back the funds so no loan program will be possible.

J.T. Long can be reached at