The rush to move assets and money before demise of redevelopment may not have been as successful as some local government officials had hoped. The State Controller is now asking for those transactions to be reversed.
In the Bay Area, the cities of San Jose, Santa Clara, and Oakland all used their redevelopment funds after Governor Brown signed the bills eliminating the agencies. However, the Controller’s office has taken the position that such actions violate the law, which they say went active as soon as it was signed. Although the bill contained no start-date, that office is now demanding the return of the properties to Redevelopment Agencies.
Once there, their sales will be used to raise capital to payoff outstanding debts and pad the state coffers.
The League of California Cities has taken a different view, and the issue could be settled in court.
From the San Jose Mercury News:
Last November, San Jose gave the Oakland A’s an option to buy downtown land for a new ballpark. But the deal wasn’t intended simply to boost the stadium plan; it also aimed to protect the land from the state, which was seeking to nab the assets of city redevelopment agencies in order to plug its budget holes.
Now it appears the move may have come too late.
Other cities around the Bay Area made similar maneuvers to keep threatened projects alive, and they all may find those redevelopment-related deals in the state’s cross hairs as officials argue over the effective date of the law passed last year that ultimately killed the agencies.
Read the full article here.