The Davis City Council is moving to finance several city projects that will lose funding if Gov. Jerry Brown implements his proposal to dissolve city redevelopment agencies.
Last week, the city issued a $16 million bond to ensure several of the city’s “prioritized” redevelopment projects receive funding. These projects include the creation of a downtown parking structure, a new hotel-conference center and the Third Street Improvements Project, which plans to renovate Third Street between A and B Street.
“We’ve been working on these various projects for many, many years,” said councilmember Sue Greenwald. “We’re not going to be able to do everything. We didn’t bond the full amount that we could have. That’s still being worked on right now.”
Davis’ Redevelopment Agency, whose governing board is the Davis City Council, helps finance city projects and affordable housing within a designated redevelopment area, which includes Downtown Davis and much of South Davis. Past projects include the Interstate 80 bicycle tunnel, the Pole Line over-crossing and the conversion of City Hall into Bistro 33.
Councilmember Stephen Souza said at the Feb. 22 meeting that while he supported borrowing for infrastructural projects, the bond creates an expensive loan obligation in a grim bond market.
“I don’t like this rush whatsoever, and I think none of us do,” Souza said. “But it’s a rush that’s been placed upon us, and that’s unfortunate because I think we probably could have come to an understanding to actually do meaningful reform…”
Greenwald said the necessity to issue bond money is heightened since other cities are scrambling to finance their own projects.
“The cities that do not put their redevelopment dollars to use will essentially be subsidizing the cities that do, indirectly,” she said. “The money that the state is taking – property tax dollars – is redistributed toward the cities that have spent their redevelopment dollars.”
Moreover, the council unanimously chose to hold off additional bond financing for the affordable housing program, which is heavily financed by the RDA. City officials cited the uncertainty of Brown’s proposal and the cost of borrowing money as reasons.
Interim City Manager Paul Navazio said last Tuesday that the high cost of issuing bonds outweighs their potential gain as a backup plan.
“If there’s a compromise and RDA housing funds remain, this would have been a very expensive insurance policy,” he said.
Greenwald also said the state is more likely to re-institute funding for affordable housing than non-housing redevelopment funds, if RDAs are successfully eliminated.
City staff presented a list of current housing projects at risk last Tuesday, which include the rehabilitation of the Pacifico Co-op, a down payment assistance program and the New Harmony Project – an affordable housing development in South Davis.
“These are quality projects,” Mayor Joe Krovoza said last Tuesday. “If we had done these projects four months ago, we wouldn’t be accused of taking money from the schools, which I don’t think is an accurate way to say it. If we do it three months later, it may not be there.”
JUSTIN HO can be reached at email@example.com.