Over the holiday break, the Supreme Court issued its ruling in the California Redevelopment Association v. Ana Matosantos, also known as the Redevelopment Case.
As we’ve all since learned and digested, redevelopment as we know it will cease existing in three and a half weeks because the Supreme Court found that the State had the right to abolish redevelopment agencies but did not have the right to allow them to continue operating if they paid a yearly fee. That ruling was the worst-case scenario for proponents of redevelopment, as it left no avenue for continuing RDAs.
Now, facing a February 1st deadline to cease operating and dismantle, the California Redevelopment Association, the California League of Cities, as well as counties and cities across the state are urging lawmakers to stay the execution by a few months. The hope is that in a couple of months, a new operating structure for redevelopment could be established that allows the state to receive its pass-through tax revenue, while redevelopment agencies could continue to provide incentives for business investment and economic growth.
In a statement issued after the ruling was released, the California Redevelopment Association’s Interim Executive Director Jim Kennedy said that, “(The) CRA is ready and willing to engage in immediate dialogue with Legislators and the Governor on a meaningful ‘fix’ to this problem. We have ideas for ways to restore redevelopment while also providing the state budgetary relief in a manner that doesn’t violate Prop 22. Time is of the essence, and the future of California’s economy is at stake. We hope legislators will join us in this important effort, for the sake of our future.”
Now it appears that legislative progress is being made.
For the second time in the last twelve months, parties that often find themselves on opposite sides of an issue have come together. Both labor and business are urging lawmakers in Sacramento to continue redevelopment. Last time the groups worked together on a local government issue was the battle over Vernon, when the groups were fighting disincorporation. That effort succeeded.
When it comes to redevelopment, Labor wants to see the system continue in some form because a large percentage of RDA money is spent on construction, an industry that’s been decimated in recent years. Businesses often use the tax incentives offered through redevelopment agencies to expand or invest. The loss of the RDA affects both groups.
Even the Leaders in the Senate and Assembly who supported the two bills that brought about an end to Redevelopment seem to be surprised by the decision of the Supreme Court. In a statement, Assembly Speaker John Perez said, “(The) action by the Supreme Court is a mixed result. The Supreme Court validated the Legislature’s action to eliminate existing Redevelopment Agencies, but we are disappointed that they blocked the creation of smaller, more targeted redevelopment agencies that fully funded affordable housing.”
He then vowed to find other ways to continue to fund “affordable housing solutions and making smart economic development investments in our local communities.”