The Troll Under the Bridge

Do you remember the childhood story about a Troll under a bridge who threatens to block passage and eat the three Billy Goats Gruff? Well, this is similar to the county of Santa Clara and the city of San Jose.

The county government as a whole, was never a fan of the Redevelopment Agency, as RDA had the long-term potential of minimizing future property tax revenues to the county. The county was always unsure what it would have actually collected in property taxes had it not been for RDA. Without RDA, North San Jose would have been the mecca for mobile home parks and downtown San Jose would have remained a collection of surface parking lots. There was simply not much property tax to collect from undeveloped property in these RDA zones.

The county, like the troll, had an option of eating or stopping the Billy Goat/RDA by blocking the RDA from raising its debt limit. Instead, the county entered into an agreement to let the RDA borrow even more. In return, the county had the most generous payout by a RDA in the state of California.

The county, again like a troll on a bridge, has the ability to block passage. In the case of the county, it is the official body that collects property taxes and then divides and distributes revenue out to school districts, cities and special districts. The county would have nothing to lose by withholding property taxes, hoping that San Jose would capitulate and make a deal. A deal could put the Successor Agency to the Redevelopment Agency (SARA) at possible default of bond payments.

The nothing to lose posture of the county caused all RDA bonds to be downgraded in the state of California, because the rating agencies saw potential risk by trolls on other bridges in the state. This increased cost of financing, as a result of the downgrade, puts the County further behind in getting paid, as the county is last in line to get paid behind the bondholders and lines of credit.

State Controller John Chiang played mediator between the county and city, and he found that the county is wrong and should give San Jose the property tax money it is due.

The County has withheld some of the funds to pay for the PERS (Public Employee Retirement System) tax. As a result, the city of San Jose has filed a motion against the county in a Sacramento court. The letter from the state controller specifically called out the PERS levy, noting that the county was not eligible in retaining those funds. Again, the county has nothing to lose by posturing in this manner.

Going back to the Troll and Billy Goat story, the last of the three Billy Goats lowered his horns, galloped along the bridge and butted the Troll into the air.  After this, the troll no longer blocked passage on the bridge.

13 Comments

  1. You paint the SJ RDA as being the best thing since sliced bread.  What you overlook and what others fail to realize is that it was little more than a funnel to divert billions of tax dollars into the Downtown area at the expense of other services including public education.  The whore-pimp relationship between local developers and the City has finally ended and the SJ politicians are upset that the huge slush fund is no longer there for their exclusive use.

    • It was the best thing since sliced bread. San Jose – my town – got a higher percentage of the money it produced in taxes. The things it did with that money produced even more taxes.

  2. Seems the city is in constant battles with most everyone.  But this administration has one common theme. We are right and everyone else is wrong. In fact is not the city also battling the state on whether to have audit or not. Be bad if the city with the highest RDA debt was found to have abused and misused the RDA money.  Oh well more lawsuits with taxpayer money.

    • Battles are ok, as long as you’re looking out for the best interest of the city and it’s residents like Mayor Reed and the vast majority of the city councel are doing.

  3. Santa Clara county is an evil county.  It’s Darth Vader of counties.  I wish Santa Clara county would dissolve itself, and San Jose would take over the remains.  The county, which Portland, Ore is seated, is a very nice county that works with the whole city/community.  It’s the Jedi of counties.  Look, they’re building an office tower with a world class public market.  Dade county and San Diego as well as LA/ Cook(Chicago) work with the cities and cooperate with them to make them world class urban areas, and they get along with each other.  Santa Clara county is what destroyed San Jose or impede it.

  4. Without RDA, North San Jose would have been the mecca for mobile home parks and downtown San Jose would have remained a collection of surface parking lots. There was simply not much property tax to collect from undeveloped property in these RDA zones.

    Redevelopment districts have been misused for years.  Like you need to create a redevelopment district to develop farmland or vacant commercial property.

    It also seems to me that if you own anything over 50 years old in San Jose, the city will make it almost impossible for you to do anything with it.  So the city in effect creates blight by its onerous codes and regulations.  Then when monied interests want to develop, they have no problem with historical preservation and the other issues that affect regular citizens, because it’s blighted.

    That fiasco with the Tropacana Shopping Center will tell you everything you need to know about San Jose and redevelopment.  I’m glad they got rid of this scam.

  5. STILL lost in the discussion that RDA accounted for roughly 1/3 of the total SJ budget… The other funds being General and Special.  Reed and his “majority” (including P.O.) are quick to point out that pensions are 1/2 the payroll and that the General fund has been in an “emergency” for over 10 years.

    They will not disclose, however that while the 1/3 total budget General fund is what they *only* have talking points about.  The airport, golf courses, special projects and RDA suck up 66% MORE than the General fund and none of it is essential services nor Charter required.

    P.O., Liccardo, Reed and the rest of their majority are snake oil salesman and should be ashamed of how they treat heir employees, their political peers and of course- their constituents.

  6. Pierre , you are PATHETIC!  everytime someone writes in with something you dont agree with , it is NOT printed!! In that way you are just like this Joke of a Mayor! Only your opinion counts ……………nobody else needs to be heard

      • So Im confused , There was nothing sexist,racial,threatening, or slanderous . I am a San Jose resident who is fed up with all the Media misinformation. At one time I was proud to be from and work in this city. Those days are gone , we pay more in taxs than just about anyother city AND here we are falling apart at the seams. This Mayor has blamed the citys ills on its very workers . The reality is that incredibly poor decisions by this mayor and the previous has put San Jose in this hole. Our RDA debt is the biggest in the state. Everyone knows that you cant spend more than you make ………….so why arent they working on getting jobs here in san jose instead of building MORE low income housing? my guess is because of the Mayors developer buddies. what have I said that is not true. I used to be proud of this city where I was Born , raised, worked in. it is regrettably a shell of its former self

        • I’m born and raised in San Jose as well. San Jose is not falling apart at the seams. The mayor is working on getting more jobs here by doing things like airport expansion and so on. I’m a Democrat, if Barack Obama, Rahm Emanuel – Mayor of Chicago, or Anthony Villaraigosa – Mayor of Los Angeles, were to be mayor of San Jose they would do exactly what Mayor Reed has done. You know this man.

        • The airport “project was supposed to be self sufficient so why is almost $800 Million of General Fund money got to this Money pit?????

          And the Difference between Obama, Emanuel, A. Villaraigosa and this Joke of a Mayor that we Have , is every single one of them would have looked at ALL options available , not just his own pathetic view of how things should be done. All of Reeds efforts went into Keeping all other offers off the table, City workers proposal would have saved over $500 million in saving inside of 5 years , with an immediate impact! Instead we are locked in a gang of lawsuits that are sure to go on for years , be beaten down in court(By the City attorneys own admission) and more than like cost way into the millions.

          No new jobs are being added to San Jose, just lots of low income housing (rentals ) to benefit Reeds Developer Buddies. SJPD are abandoning ship for greener more appreciative pastures. SJFD soon to follow. It will take years to replace the invaluable experience that is leaving this city, only to be replaced not by the best and the brightest but by the “meets standard” crowd. Thik things are bad now …………..wait till the dust settles

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