Compromise on redevelopment

State shouldn’t throw baby out with the bathwater

Gov. Jerry Brown makes a strong case that, at a time when California is suffering the worst budget crisis in its history, it cannot afford to direct billions of tax dollars to city and county redevelopment projects at the expense of schools, health care and other state services. But he goes too far in trying to eliminate the state’s 425 redevelopment agencies altogether.

As Tom Gascoyne notes in his Newslines article this week, “Future is blight?” (see page 8), most of Chico is in a redevelopment zone, which means that any increase in property-tax revenues it generates goes into the redevelopment fund to pay for valuable capital projects.

The Hotel Diamond, for example, was financed in part by redevelopment loans and would not have been built otherwise. Redevelopment money paid to redo the City Plaza, remodel the Old Municipal Building and improve the Manzanita Avenue traffic corridor. And the city has directed 20 percent of RDA funding to providing low- and moderate-income housing.

Most important, perhaps, the city has used redevelopment funds to leverage millions of dollars in federal matching funds for valuable projects.

Statewide, redevelopment agencies have acted to coordinate major urban projects such as downtown entertainment zones that otherwise could not have been built. But their history also includes a fair share of cronyism, unjustified spending and bending of the rule that the money be used only to remove “blight.”

If nothing else, the governor’s recommendation has called attention to redevelopment agencies’ value as well as their shortcomings. It would be appropriate temporarily to redirect some RDA funds away from the local agencies to help eliminate the state’s $25 billion budget deficit, but it would be a mistake to throw out the baby with the bathwater and eliminate the agencies altogether. Used wisely, they are a valuable economic tool.

Instead, the Legislature should tighten up the rules to make sure funds are spent on worthy projects and aren’t merely municipal slush funds. Since its passage in 1945, the Redevelopment Act has served California well; it needs reform, not elimination.