The California Supreme Court recently ruled on two state assembly bills regarding the status of the state’s redevelopment agencies.
The California Supreme Court decided on Dec. 29 to uphold Assembly Bill 26 (AB1X 26) and to strike down Assembly Bill 27 (AB1X 27).
AB1X 26 eliminates redevelopment agencies while AB1X 27 would have allowed redevelopment agencies to continue operating, provided they make payments to schools and special districts every year, that is, $1.7 billion this fiscal year and $400 million onward.
“If a political entity has been created by the legislature, it can be dissolved by the legislature, barring some specific constitutional obstacle,” said the Supreme Court in a statement.
According to the California Redevelopment Association (CRA), under state law, redevelopment agencies have the specific goal of revitalizing deteriorated areas in cities and counties. The agencies replace and upgrade infrastructure such as streets, water lines and sewers, fund affordable housing, provide community facilities and clean-up contaminated properties.
In response to AB1X 26, the CRA has called out to its members to take immediate action to reestablish redevelopment.
“Without immediate legislative action to fix this disaster, this ruling is a tremendous blow to local job creation and economic advancement,” said CRA Board President Julio Fuentes in a statement.
The CRA said the ruling of AB1X 26 will result in hundreds of thousands of jobs lost.
“We have ideas for ways to restore redevelopment while also providing the state budgetary relief,” said CRA’s Interim Executive Director Jim Kennedy in a statement.
The Davis City Council has promptly reacted to the dissolution of redevelopment agencies by deciding at its Jan. 10 meeting to become the successor to the Davis Redevelopment Agency. In other words, the city council will take over the role of the soon-to-be dissolved local redevelopment agency.
“Becoming a successor agency makes the most sense,” said Davis Councilmember Dan Wolk in an e-mail. “Although there are some risks in doing so, this would give the city a greater level of control over how the redevelopment agency’s obligations and assets are handled as it dissolves.”
The staff report states the council believes the legislature’s decision to dissolve redevelopment agencies and the Supreme Court’s decision to uphold this legislation does not serve the council’s goals of fiscal stability, community strength and effectiveness and economic development.
“In Davis, redevelopment has done a lot of good, particularly with respect to affordable housing, limiting growth on our periphery and infrastructure,” Wolk said. “I hope that all the parties in Sacramento are able to work together to fashion a solution that preserves some of the benefits of redevelopment.”
Most recently, new legislation has been proposed to postpone the Feb. 1 deadline to April 15, allowing for agencies to negotiate with Gov. Jerry Brown and the legislature to keep reconfigured redevelopment agencies.
“I understand where the legislature and governor are coming from on redevelopment,” Wolk said. “In a time of budget crisis, redevelopment agencies are a prime target.”
CLAIRE TAN can be reached at email@example.com.