City May Pay State Millions to Keep Development Alive

Loma Linda continued to sift through the complex new state laws governing redevelopment agencies which officials say could cost them millions and possibly even the land their City Hall sits on.

On Tuesday night, the council approved, on first reading, to participate in a voluntary development program established by AB 1x27, a law passed by Governor Jerry Brown when he signed the state budget.

To participate, the city will have to pay an amount calculated by the California Department of Finance. The council has also agreed to exercise their right to appeal the first payment, set at more than $2,800,000. The city aims to shave off roughly $230,000 off the amount.

Loma Linda is one of hundreds of cities and business organizations fighting the state over the new laws. Any city who does not opt in to the redevelopment program, created by AB 1X26, is required to dissolve its redevelopment agency.

The state would take over RDA assets. Even those municipalities who saw the writing on the wall and transferred assets from their RDA to the city is not spared as the bills reverse any transactions made after Jan. 1.

Earlier this year, Loma Linda transferred the property their Civic Center sits on from their RDA to the city. If the agency is dissolved, they might be forced to reverse that transaction, transfer the property to the state, which will have the option of selling the property and dispersing the funds, said Konrad Bolowich, Director of Information Systems.

“A lot of cities are in the same position,” Bolowich said. Some have recreational facilities, community centers and city halls under the RDA, he said.

Loma Linda is actively taking part in a lawsuit filed that challenges the constitutionality of AB 1x26 and AB 1x27. The League of California Cities and California Redevelopment Association filed the suit/petition. On Aug. 11, the California Supreme Court issued a stay of both laws, with the exception of sections that suspend the redevelopment agencies, until the court issues a decision on the case.

Tuesday night’s actions were the city’s attempt to place themselves in the best position for the court's decision, regardless of which way it goes, city officials said.

“The effect of adopting the ordinance (opting into the program) at this time is not crystal clear,” said Mark J. Huebsch, special counsel for the City of Loma Linda. “The uncertainties are that the Supreme Court has stayed the applicability of AB 27 in its entirety. We never the less think it is advisable to go forward if it is the council’s ultimate intention to participate assuming the Supreme Court holds valid AB 26 and 27. That is not a given at all.”