STATE SUPREME COURT APPROVES ELIMINATION OF REDEVELOPMENT FUNDS

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East County Performing Arts Center is among major projects at risk from the decision

December 29, 2011 (Sacramento) – Sounding a death knell for hopes to restore redevelopment funds eliminated by the Legislature to fund education, the California supreme Court today ruled that the state has the right to eliminate local redevelopment agencies. The decision has sparked criticism from local business owners and politicians on both the left and right.

The court upheld the state’s taking of $1.7 billion from redevelopment agencies for the current budget and called elimination of redevelopment “a proper exercise of the legislative power” under the state Constitution. Governor Jerry Brown signed a budget axing redevelopment agencies in June to help close a $26 billon state deficit after the Legislature failed to find other revenue sources or spending cuts adequate to close the gap.
 

Cities and redevelopment agencies sued the state seeking to block the plan, but today’s decision dashes hopes of restoring frozen redevelopment funds. The court also ruled invalid a second bill that sought to reconstitute redevelopment agencies in a new form.
 

In December, El Cajon Councilwoman Jillian Hansen-Cox told East County Magazine that if the redevelopment funds were not restored, “the theatre will probably be sold,” referring to the East County Performing Arts Center which has been closed for nearly two years. The aging theatre, considered to have the finest acoustics of any theatre in San Diego County, needs millions of dollars of repairs for a new roof, disabled access, and more.
 

“We had planned to take about $4 million of redevelopment money and refurbish the theater; now that money isn’t there,” Councilman Gary Kendrick of El Cajon told ECM upon hearing of today’s ruling. He called the decision “a job killer and a money grab by the state.”

Kendrick, a Republican, noted that the City of El Cajon has created “hundreds of jobs in the last few years just because of redevelopment.” He cited as examples Dicks Sportin g Goods, the new El Cajon Brewery downtown which he termed “a spectacular success”, and Kenworth, which is putting in a large building to sell trucks. The latter will provide substantial sales tax revenue for the city as well as good paying jobs for residents, he predicts.
 

San Diego Councilman Todd Gloria, a Democrat, told KPBS radio today that he is deeply disappointed in the ruling. Gloria said affordable housing infrastructure and job creation will all be “on the chopping block” as a result.

 

“One in five redevelopment dollars goes for affordable housing,” he said. Impacts will be felt strongly in areas such as City Heights, where projects such as the new library were created with redevelopment money.

 

State Senator Toni Atkins (D-San Diego) issued a statement expressing disappointment in the overall ruling on redevelopment.  "While I applaud the Court's recognition that the State has the right to determine the future of the redevelopment program that the State initiated, I am very disappointed that the voluntary opt-in program was struck down," she said. "The legislative intent was to continue successful economic and affordable housing development in communities throughout California while scaling back some activities enough to help fund education and local government." The Senator pledged to work with Assembly Speaker Perez and her legislative colleagues to "find a way to continue the best part of redevelopment activities." 

 

Gabriel Marrujo, owner of Downtown Café and Por Favor restaurants on El Cajon’s Main Street, called the decision “a shame; we were hoping to get the theater back open and this will make it that much harder.” He said business was better when the theater was open, with people coming from outside East County for shows on the weekends.
 

“Maybe if it’s sold, it’s not such a bad idea—if someone else would take it over and keep it as a theater,” he said of the East County Performing Arts Center. Marrujo added that while he doesn’t like paying more taxes, that, too may be an option. “We had what, a half cent for the new police station? What if we did a tenth of a cent tax to save the civic center?” he suggested.
 

Kendrick noted that in a city that’s built out like El Cajon, “It’s very difficult to tear something down and rebuild without redevelopment assistance, and redevelopment keeps local money and creates jobs.” He suggested that the state legislature and the Governor made a decision to eliminate redevelopment agencies based on “a few bad players, but I think that they shouldn't just look at the five percent that did something wrong, but should look at the 95 percent that did everything right.”
 

The El Cajon Councilman suggested that as legislators hear from constituents and officials in their districts, officials in Sacramento may go back to the drawing board. “I suspect what may happen is the Legislature may come back with a new redevelopment plan in a smaller form.”