Demise of California Redevelopment Agencies to Have Far-Reaching Impacts
- January 30, 2012
As the Feb. 1 deadline to dissolve California’s 400 redevelopment agencies approaches, local officials are beginning to tally up the bleak consequences.
Hundreds of employees will be laid off, ongoing construction projects will be suspended and hundreds of properties may be sold on the market at a loss, reported the Mercury News. Three national ratings agencies have downgraded California bonds secured with redevelopment funding because of the uncertainty surrounding the state law shutting them down.
“The rating watch negative reflects Fitch’s belief that recently implemented state legislation creates a heightened risk at all rating levels that the flow of funds to holders of tax-allocation bonds may be inconsistent with the requirements of bond indentures,” a Fitch analyst wrote in a report issued last week, according to the Bond Buyer.
State lawmakers have proposed a measure to postpone the elimination, but its passage is not considered likely. Assemblywoman Susan Bonilla is writing a bill that would restore some redevelopment benefits to communities with former military bases, according to the Mercury News. She represents Concord, which has relied on redevelopment funding to plan the reuse of the former Concord Naval Weapons Station.
And on Friday, a Sacramento Superior Court judge rejected an attempt to postpone elimination of the agencies, reported the Sacramento Bee.