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California Supreme Court Upholds Measure Abolishing Redevelopment Agencies

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  • January 3, 2012
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The California Supreme Court last week ruled in favor of a state law dissolving about 400 redevelopment agencies, jeopardizing economic development efforts in communities, including those rejuvenating closed bases, across the state.

The measure was enacted last summer as part of Gov. Jerry Brown’s plan to balance the state’s budget by reallocating funds raised via tax increment financing from redevelopment agencies to other public services such as public safety and education. Brown’s plan had been projected to shift about $1.7 billion to those other programs.

Most, if not all, of the local redevelopment authorities striving to redevelop California’s 25 closed installations rely on the monies raised through tax increment financing to carry out the first steps needed to attract private investment — replacing outdated infrastructure, constructing roads, tearing down antiquated military buildings and cleaning up residual contamination.

“The state Supreme Court ruling alters the economic development landscape for all Californians and has far-reaching impacts for community-based efforts to support military growth programs or to recover from military downsizing,” said Michael Houlemard Jr., executive officer of the Fort Ord Reuse Authority in Monterey.

“Losing this important tool will limit job growth and slow economic recovery programs in California — and may have precedent-setting effects for other regions of the country,” Houlemard added.

The Supreme Court decision also invalidated a companion measure which would have allowed communities to continue the redevelopment agencies if they shared their tax increment revenue with the state.

In response to the ruling, the California Redevelopment Association and the League of California Cities said they would work with state lawmakers to revive the agencies, possibly under a revenue-sharing arrangement, reported the Contra Costa Times.

Officials with several LRAs believe the law abolishing redevelopment agencies does not apply to them. The Inland Valley Development Agency, which is responsible for the reuse of the former Norton Air Force Base in San Bernardino, and the Victor Valley Economic Development Authority, the agency managing the redevelopment of the former George AFB in Victorville, say they were created through special state legislation giving them the powers of redevelopment agencies, reported the Press-Enterprise.

Similarly, Lori Stone, executive director of the March Joint Powers Authority, said the agency overseeing the reuse of realigned portions of March AFB in Riverside also should be exempt, according to the story.

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