Local Communities Fight to Save Redevelopment Agencies

Local Communities Fight to Save Redevelopment Agencies

Gov. Jerry Brown's proposal to defund the statewide redevelopment agency program is facing push back as local authorities are fighting to hang on to the agencies.

Some groups such as the League of California Cities and California Redevelopment Association have taken the fight to court, with a petition challenging the legality of two redevelopment laws, AB 1 x 26 and AB 1 x 27, that call for California’s 400 redevelopment agencies to make ransom payments to fund state obligations, or be shut down.  These laws were part of the state budget that passed in June.  

The petition argues that the redevelopment laws violate voter approved Prop. 22, an amendment passed last November that prevents the state from taking money from local governments, including the tax increments generated by redevelopment agencies. The California Supreme Court will review the case in early 2012.

Like many local economic development officials, Emil Marzullo, interim executive director of the San Bernardino Economic Development Agency, said redevelopment agencies play a vital role in turning around blighted areas and increasing local tax revenue.

In recent years, the San Bernardino Economic Development Agency, the city’s redevelopment agency has taken on the task of rejuvenating dilapidated and abandoned properties that would otherwise be a magnet for crime and urban blight.  Marzullo said property developers often pass on these projects, because there is little financial gain in trying to turn them around. Without the redevelopment agency, these projects would be left abandoned, he said.

The San Bernardino Economic Development Agency has also taken over several "brownfield" properties that have environmental damage.  Brownfields are industrial properties that have been contaminated with water and soil-born contaminants. According to Marzullo this pollution prevents new construction.

 “Without redevelopment funds to clean up brownfields and blighted areas, or build needed infrastructure, private investment in our city would be a fraction of what it is today,” Marzullo said. “In the past 10 years, our agency has contributed $97 million to 34 major improvement projects, totaling approximately $571 million, of which private investment supplied $474 million.”

The San Bernardino’s redevelopment agency has also assisted with development of California State University, San Bernardino in the 1960s, refurbished The California Theater, developed the Inland Empire 66ers stadium and assisted with development of Hospitality Lane, a San Bernardino commercial zone featuring hotels, restaurants, retail stores and offices.

The city’s redevelopment agency has also taken over downtown properties such as old motels and gas stations.  "By taking these properties over for private development we have a better scenario for the future," Marzullo said.

Other San Bernardino redevelopment agency projects include the development of the Yellow Freight cross-docking center terminal in 2001 and the Inland Behavioral Health Center in 2007; attracting the Kohl's E-Commerce Center and the Dollar Tree west coast distribution facility in 2010; and the launch of the city’s Office of Business Development, which promotes business recruitment and retention, and provides resources to local entrepreneurs.

However, Marzullo said the redevelopment agency have often not been good at tooting its own horn. In many cases people see construction projects, but have no idea that they were overseen by the redevelopment agency. Local economist Jay Prag, a finance professor at Claremont Graduate University, also agrees with Marzullo.

"Local officials need to specifically show voters what shopping centers were created by the redevelopment agency," Prag said. "You need to have specific things to point to and say that came from the redevelopment agency."'

The City of San Bernardino has taken steps to secure its redevelopment agency. Earlier this year, the council moved control of the redevelopment agency to the San Bernardino Economic Development Corp. In an interview with The San Bernardino Sun, Councilman Fred Shorett said it was important to have a locally-controlled economic development organization. "We are a city and we need to protect our future and protect the funds and the taxpayer dollars here in the city," Shorett said.