Three dozen cities are currently at risk of having their RDA-funded properties divested and returned to the state.
Last month, the City of Cerritos was informed that it would be on the hook for returning over $170 million in property and assets to the State Controller. The city’s prized auto mall and performing-arts center were included in this sweep.
“This is very, very serious,” said Mayor Bruce Barrows to Bloomberg. “As soon as you take away our business model by fiat in Sacramento, our cash flow goes away.”
RDA funding helped usher in an era of suburban prosperity for Cerritos, transforming the once-sleepy town known for dairy pastures into a thriving city of 50,000.
The city is concerned about the loss of land related to its auto mall. The Cerritos Auto Square is known as the world’s largest auto mall and offers 23 dealerships and marquees side-by-side.
In addition to surrendering of land and assets, Chiang has ordered Cerritos to turn over $21.3 million in cash that was improperly transferred from the redevelopment agency (RDA) to the city before the dissolutions of RDAs statewide.
Chiang has thus far analyzed 88 cities for compliance. According to spokesman Jacob Roper, 30 were found to have no unauthorized transfers, 22 were found to have violations that have since been resolved and 36 received orders from the Controller to divest illegally-transferred properties.
“Moving away from a long-time dependence on redevelopment and now sharing those funds has been a difficult transition for many cities,” Roper said in a statement. “While we appreciate their frustration, the legislature and the courts have made it clear that redevelopment assets must be used to pay off the RDA debts and support other community services.”
An additional 121 cities are currently under review.
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