A ruling Thursday by the California Supreme Court is more or less the nail in the coffin for the San Jose Redevelopment Agency. It’s also a critical victory for Gov. Jerry Brown, whose budget has been under scrutiny for major shortfalls compared to rosy projections regarding revenue.
The state’s high court decided $1.7 billion can be legally taken from RDAs across the state, and the ruling also denies agencies the ability to “pay to play” by giving money over to the state to remain in existence.
San Jose’s RDA prepared for this day by dramatically scaling back the agency earlier this year to just eight employees. Just a few years ago, the agency had more than 100 employees. In May, Harry Mavrogenes resigned as the agency’s executive director.
San Jose’s RDA is responsible for some of the city’s most notable structures, such as HP Pavilion and the Tech Museum, but it now functions as a quasi debt service agency, mainly managing financing and payments of previous projects.
However, there is still one project for the future that the RDA could claim as its own success. In March, the City Council moved parcels of land near HP Pavilion into a shell organization called the Diridon Development Authority in the hopes of saving the land for a ballpark. San Jose is still waiting to hear if the Oakland A’s will be allowed to relocate to San Jose. A tweet sent out by a CBS reporter increased speculation that the A’s will get the thumbs-up from MLB.
Mayor Chuck Reed released a statement Thursday denouncing the court’s decision, adding that it “will stall job creation efforts in San José at the worst possible time. Redevelopment funding provides critical tools to rebuild our economy, create jobs, and build affordable housing—exactly the kinds of investments we should be making in this recession. Instead, we’ve had to cancel and delay projects that would get our economy moving again and put people back to work.”