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April 16, 2008 > Redevelopment - boom or bust?

Redevelopment - boom or bust?

A series of articles to describe and examine the role of redevelopment agencies in our communities.

There is a mechanism that funnels many millions - even billions - of taxpayer dollars to little understood agencies that have, at best, an uneven record of accomplishment throughout the state of California. Although the initial concept of redevelopment agencies focused on eliminating blight, their promises and goals are often compromised. Enormous amounts of money and therefore opportunities for corruption exist under the guise of "economic development." A poor understanding of redevelopment agencies by the public and many elected officials is a recipe for disaster. Over $80 billion of debt has been amassed by these agencies statewide and this figure is increasing significantly every year.

Greater Tri-City redevelopment agencies have an uneven record. Some cities have used funds to create laudable, defensible and tangible results while others may be hard pressed to explain expenditures. Poorly run agency reports are sprinkled with vague terminology, poorly defined projects, high salaries, highly paid consultants and outcomes that are questionable at best. Fremont's Redevelopment Agency is currently holding meetings with other tax-supported agencies to increase its spending cap by $1.1 billion in addition to $400 million previously allocated. Where will this money come from, how will it be spent and what does this mean to other affected public agencies?

This series of articles will ask questions and attempt to find answers from state agencies, local redevelopment agencies, government officials and groups and individuals that have some understanding of this "unknown government." What is redevelopment? Is it fulfilling its promise to the people? If a redevelopment agency exists in your city or town, who oversees its expenditures? How can the public become involved in these decisions?

Part I - The Unknown Government
Reprinted below is the first chapter of Redevelopment: The Unknown Government, A Report to the People of California published by Municipal Officials for Redevelopment Reform (MORR). Ninth Edition, September 2007.

There is an unknown government in California.

This unknown government currently consumes nearly consumes nearly 12% of all property taxes statewide - $4.1 billion in 2006. It has a total indebtedness of over $81 billion.

It is supported by a powerful Sacrament lobby and backed by an army of lawyers, consultants, bond brokers and land developers.

Unlike new counties, cities and school districts, it can be created without a vote of the citizens affected.

Unlike other governments, it can incur bonded indebtedness without voter approval.

Unlike other governments, it may use the power of eminent domain to benefit private interests.

This unknown government provides no public services. It does not educate our children, maintain our streets, protect us from crime, nor stock our libraries.

It claims to eliminate blight and promote economic development, yet there is no evidence it has done so in the half century since it was created.

Indeed, it has become a rapidly growing drain on California's public resources, amassing enormous power with little public awareness or oversight.

This massive unknown government is Redevelopment.

It is time Californians knew more about it.

State law allows a city council to create a redevelopment agency to administer one or more "project areas" within its boundaries. An area may be small, or it can encompass the entire city.

These project areas are governed by a redevelopment agency with its own staff and governing board, appointed by the city council.

Thus, an agency and city may appear to be one entity. Usually city councils appoint themselves as agency board members, with council meetings doubling as redevelopment meetings. Legally, however, a redevelopment agency is an entirely separate government authority, with its own revenue, budget, staff and expanded powers to issue debt and condemn private property.

Out of California's 478 cities, 387 operate redevelopment agencies. No vote of the residents affected was required. No review by the Local Agency Formation Commission (LAFCO) was done. (Only 23 of the 58 counties have active agencies, but these affect only shrinking unincorporated areas and constitute about 4% of all redevelopment expenditures.)

Californians often confuse redevelopment with federal "urban renewal" projects typical of large eastern cities of the 1940's-60's. Sadly, the methods and results are often similar. Yet redevelopment is a state-authorized layer government without federal funds, rules or requirements. It is entirely within the power of the California legislature and voters to control, amend or abolish.

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