Brown Eyeing RDA Funds?

Times have changed since Jerry Brown was last Governor. These days he’s faced with a $28 billion deficit and the realization that he’s going to have to cut somewhere. One possibility is the state’s Redevelopment Agencies, which consume about $5.5 billion in property tax revenues. It won’t be easy. While transferring that money to schools, for instance, could prove popular, the same voters who elected him also approved Proposition 22, which prevents the state from raiding local funds.

Nevertheless, rumors that the new Governor is eying the funds has Harry Mavrogenes, San Jose’s RDA head, skittish. He notes how the RDA has been responsible for many of the city’s landmarks, including the HP Pavilion, the McEnery Convention Center (and its somewhat controversial upgrade), and the Children’s Discovery Museum. It has revitalized the downtown area and created a new high tech corridor along North First Street. It would also endanger the planned baseball stadium and, in Santa Clara, the planned football stadium, both of which depend on their respective RDAs.

Then there is the business angle. RDA funds have been used to draw and keep manufacturing in the state, while two local solar energy companies have announced that they are opening new production facilities in the South instead: Stion of San Jose in Mississippi, and AQT Solar of Sunnyvale in South Carolina.

On the other hand, schools are suffering statewide, and local education budgets have been trimmed to the barest minimum. Local school officials wonder whether it wouldn’t be better to use taxpayer money to boost education instead of investing it in sports arenas.

Brown’s team has not yet commented on the rumors. They are waiting for the Governor to outline his plans for the budget on Monday.
Read More at The Mercury News.
Read More at KLIV.

11 Comments

  1. Reading the headline quickly, it appeared as though the writer was denigrating RDAs.  Alas, the first two words were not joined by a hyphen!

    At any rate, I would disagree that the RDA has revitalized the downtown area.  Oh sure, they had a couple of successes, but money beyond those two or three facilities has largely gone to waste.  What is it now… $3 billion dumped into downtown and it’s still a failure. 

    As for creating a new high tech corridor along North First Street, that would have happened with or without the RDA.  In fact, it is this very corridor that, through tax increment monies, has diverted the $3 billion wasted on our downtown area.

    • It is the primary obligation of elected politicians and regulatory czars to take as much money from every possible source and throw down a black hole or brown-eye. uhhh you can quote me on that.

      • > It is the primary obligation of elected politicians and regulatory czars to take as much money from every possible source and throw down a black hole or brown-eye. uhhh you can quote me on that.

        If I were to quote you on that, people might accuse me of mixing metaphors.

        I believe it would be more accurate to say that regulatory czars “throw money down a black hole”, but “shove money up a brown-eye”.

  2. Gracias a Dios, Rendre grace a Dieu, Meno Male, Gott sei Dank! I did not vote for Jerry Brown but had I known of this plan, I would have. Prop 22 should not be a problem. If the Redevelopment Agency can no longer skim $285 million a year from the property tax roles, it will not have any money for the State to take. A simple repeal of the California Community Redevelopment Law would do the trick. After 55 years of failed Central Planning and $3 billion largely wasted, downtown San Jose will now have a chance to blossom.

  3. Sometimes it makes sense to scrap it all and start over.  I’m not talking about bulldozing a blighted section of town but rather a troubled section of state law that was created to address blight but has been used for wealth transfer using increment financing to borrow and spend billions and create new sporting venues, yuppie villages and other things that help enrich some while the community as a whole has to absorb the displaced poor and struggle with the scarcity of affordable housing creating by declaring all market rate affordable units “blighted.”  Social Justice was supposed to be about addressing the needs of the disadvantaged, and in that name Redevelopment was created and used for something else entirely.

    Maybe its time to sunset all the existing agencies and bond obligations and start fresh with a new mechanism that has some honesty about what its doing.

  4. While some may cheer the impending doom that faces the RDA, we really should take a good, hard look at where that money will now be redirected.

    In all likelihood, the money that goes into the RDA will be redirected into K-12 public education – IOW, into another bureaucratic black hole which has even less accountability to the local community than the RDA currently enjoys.

    I can practically hear DiSalvo’s mouth drooling at this prospect.

  5. Do the Governor dropped the bomb with a proposal to phase on Redevelopment July 1.  It’s not a done deal until the legislature acts, but odds favor it.

    This limits the ability of a special agency quasi-governmental agency to broker these huge deals and use tax increment financing for bond money.

    What about the existing portfolio of properties owned by some of these agencies?  These aren’t tied to the increment financing and actually represent a real and tangible investment that could yield quick or sustained returns.  Think Campbell and Pruneyard where the leased the land the the developer but kept ownership.

    The City of San Jose can still swing projects as a developer using its own land portfolio and funds, perhaps having to leverage a little more private dollars or even go to the polls for a parcel tax, but things are still possible.  It just has to really make sense and you have to sell it to a 55% majority of the electorate and not just a majority of the council members wearing their “redevelopment agency board member” hats.

    We’ll need more debate and community buy-in, but mega-projects are still possible post-Redevelopment.

  6. With obvious accomplishments such as the convention centers and arenas etc. in my mind RDA’s thirst for tax increment and the assumption that only Santana Row’s can get it, micromanaging efforts downtown are devoid of any economic or age diversity making it a bedroom for yuppies, and concentrating the slumming activities on weekends. Bore… Ing. Otherwise the place just feels hollow. I blame it on a total disregard for the class of people who are primarily pedestrian in nature. They are not the condo people. So pull the plug and get the money someplace with redeeming value. I’m with Jerry.

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