Redevelopment On The Line

The budget deficits at every level of government have created an atmosphere where everything is up for review. There are no longer any sacred cows when it comes to government spending. Taking a second look at the value of redevelopment agencies has become a current hot topic for discussion.

On Jan. 6, the Mercury News offered the front page headline, “Brown Could End Redevelopment Era.”  “In the past 50 years, California’s redevelopment law has helped cities build major cultural facilities, lure businesses and revitalize neighborhoods.”  That may be so, but to what extent, and at what price?  Redevelopment agencies and zones were initially created for the purpose of eliminating blight.  Over time, some argue, these agencies have moved away from their initial mandate, and essentially become their own franchises.

Doug McNea, President of the Silicon Valley Taxpayers’ Association writes, “The time has come to stop the diversion to the RDA of more than 90 percent of the property taxes from the biggest corporate taxpayers…tax revenue that would otherwise be going to education and county services, like children’s health…Education should always have priority over subsidies to team owners to build play grounds for multimillionaires.”

The Merc reports that school and county officials are welcoming Gov. Brown’s idea to reform redevelopment. “They argue that although redevelopment has its merits, local leaders have overused it to subsidize questionable private development at the expense of basic public services…redevelopment also has critics among neighborhood activists. Property taxes rerouted from other agencies come with a hitch: The money must be spent on projects that eliminate blight and can’t be used for operating expenses such as paying police officers, firefighters, and librarians.”

Fans of Redevelopment will point to the San Jose Arena, the Fairmont Hotel, the Convention Center, and the Adobe Towers as examples of how Redevelopment works.  Others would remind us of past efforts by the San Jose Redevelopment Agency to seize private property through the use of eminent domain, all in the name of the greater good.  Remember the fight over the Tropicana Shopping Center?

On Monday, Gov. Brown’s budget proposal outline called for phasing out redevelopment agencies and enterprise zones. The San Francisco Chronicle reported, “In his budget proposal, Brown argued that the mechanism has taken billions in revenue away from schools, public safety and other local programs by earmarking property tax revenues that otherwise would have flowed to state and local coffers. He also contended that the private development that has occurred in redevelopment areas would often have taken place even without the program.”

If we accept Brown’s argument that the private development “would often have taken place even without the program,” we’ve been sold a multi-billion dollar bill of goods (plus interest) for decades! 

34 Comments

  1. Redevelopment is a total failure and a waste of taxpayer money when it comes to downtown revitalization.  The job is still only half done, and to leave it this way kills any idea of a vibrant downtown.  Right now, and the final answer is a resounding NO!  Downtown SJ is basically dead and only a haven for thugs and drug pushers.  Santana Row stole the thunder from downtown and killed it, instantly.  From here on, the cries and blames toward the city will get louder and louder! Bottomline: you don’t revitalize downtown while you build a behomoth Santana Row and Plant 51. That’s counter-productive.  The bottom is falling, and the new market place at San Pedro Sq will not help because there are not enough housing, period.  The wealthy and middle class people hang out at Santana Row and Los Gatos.  This will not change.  The city has nothing but itself to blame downtown’s demise.  This a sad commentary and conclusion of the redevelopment agency as the new Governor Jerry Bown phase out the agencies statewide by July 1st.  He has every right to do so and transfer the money to pay off debt for schools and other services. We knew something like this was going to happen soon all alone, but the city was so ignorant about this predicament and went along as business as usual.  It bit the city in the rear.  A lesson learned.

  2. Poor Mayor Reed…..so much for the ballpark. What a very foolish idea in the current financial situation – especially since Major League Baseball has never given permission for the A’s to move to San Jose.

    • Steve,
      Since your obviously not in the know: Lew Wolff/A’s will privately finance the ballpark, so no city taxes or RDA monies were ever going to go directly towards its construction costs.  As for the remaining land acquisitions for said venue, they are being handled (payed for) by the sale of other city owned properties.  The city will then either do a land-lease or sell outright the ballpark property to Lew Wolff/A’s…a win, win for all parties involved.  “Very foolish idea” you say?  Far from it!

      • TD – Just because you keep repeating the same thing over and over doesn’t make it true.
        Talk to people who have dealt with Lew before. He does what is best for Lew and nobody else. So far, he stands to gain the most from a City so desperate they would pawn the crown jewels if they thought it would get them a baseball team.
        Keep believing that this scheme won’t cost us anything. I look forward to meeting with you soon so we can close a deal on the bridge I’ve got for sale.

      • Sorry Tony,

        Only good cool cities get baseball.  The new Govna is using his pull to sand bag the A’s to San Joser.  With no city money, they stay in Oakland.  Watch any day now the State will have some money for Oakland to build a stadium!

      • Tony D.
        You can call a tax whatever you would like – it is still a tax. And yes, it is a very foolish idea, especially in light of MLB never giving permission for a team to move to San Jose. However, as you correctly state, I am “not in the know”. I assume from your statement, that you are “in the know”. Please advise me if MLB has, behind closed doors, already decided to let the A’s relocate to SJ? Thanks so much for any inside info you can provide to us who are not in the inside circle and “not in the know”.

      • I guess Tony D. believes in the Bush doctrine of propaganda. Say it enough times, and people will believe it, no matter how untrue it is. Millions of RDA money have already gone into land acquisition. A recent issue of New American City catalogs all the hidden public costs of stadiums, even those supposely privately-financed. Maybe Tony is on Lew’s payroll? What other explanation for this continual stream of untruths?

        • As some of the teenagers I work with would say, “Whatever!”  The only appropriate response left for the continued blather from the anti-ballpark crowd.

        • Tony D.
          “anti-ballpark crowd.”??? I am a die hard baseball fan and have been a Giants and A’s fan for over 50 years. I played and coached baseball. I am definitely not “anti-ballpark”. As previously stated, I am totally against the way this is proposed to be financed, especially in light of the economic problems facing taxpayers, and that Mayor Reed would layoff police officers in order to shove a baseball stadium down our throats, with no guarantee baseball will even come here. Tax dollars are tax dollars are tax dollars.

  3. RDA is little more than a “Now we have the money/Now we don’t” political slushfund.

    If the rank and file is getting the squeeze, then the city must also walk the talk and stop spending taxpayer millions on bright shiny objects. 

    You’re either serious about fiscally austerity or you’re not.

    Nuke RDA.

  4. The San Jose Redevelopment Agency was the largest in the State until about 3 years ago when it was passed by Los Angeles. After spending $3 billion, mostly in the downtown, the RDA doesn’t have many friends even in the downtown. I cannot find many people except politicians and Agency employees who like the Agency.

    If the RDA had to get a public vote like all other government entities before it could sell bonds, the Redevelopment Agency would be out of business very quickly. If the voters had to chose between funds for redevelopment programs or our schools, guess which would win.

    The Agency likes to tout all of the wonderful things that it has accomplished. I agree that the Arena, Children’s Discovery Museum, the Tech Museum, the Repertory Theater and the Center for Performing Arts
    were worthwhile public endeavors.

    If the public was aware of the hundreds of millions of dollars of grants that were funneled into private developments like the Fairmont Hotel, the Central Place Project, Adobe Towers and many others, would we
    be cheering for the Agency? For example, do you think that the voting public would have supported a $25 Million grant to the Crown Prince of Saudi Arabia for the Fairmont Hotel? 

    An audit of the Agency’s largesse would be enlightening. No more bonds without votes!

    Where is “The bang for the buck”? 55 years of RDA is enough. Let’s redirect the money toward schools and healthcare for our children.

  5. City Hall is losing it “stash” fund? Great news! “Reed the Terrible” will soon no longer be able to spend from this fund while laying off ESSENTIAL employees such as firefighters and police (forthcoming). Well done Gov Brown, make it happen.

  6. Difficult to believe that very many folks will get riled up about this.  For decades, nearly every dime of tax increment money has been poured down the black hole known as Downtown SJ.  And examining our core City services, all of which are on life support, I’d sooner see a dollar come our way than $100 going to yet more Downtown projects.

  7. ” Brown argued that the mechanism has taken billions in revenue away from schools, public safety and other local programs ” ” He also contended that the private development that has occurred in redevelopment areas would often have taken place even without the program.”

    The difference redevelopment

    – made many political insiders = former Mayors, politicians, city managers, and planning directors; lobbyists, downtown property owners, multi-millionaire sport team and hotel owners,  –  very very rich

    – helped politicians who supported redevelopment get millions campaign contributions, get elected and give as political payback – commercial to residential rezonings, tax subsidies construction and low income housing contracts

    – paid for many public construction projects – City Hall, police / fire stations, community centers, museums, theaters etc that generated 10,000 + prevailing wage union construction jobs

    – was legal political payback / spoils system that funded Democratic government employee and public construction labor unions controlled elected politicians that controlled California Legislature for last 40 years

    Watch as Democratic Labor elected politicians,  construction trade unions, multimillion developers and sports team owners unite to fight Brown to not eliminated redevelopment political spoils, union jobs and make multi-millionaire’s richer system

  8. I am no fan of the RDA,  but to suggest that the tax revenue collected from the “tax increments” added to property owners tax bills on land that is situated inside clearly/legally defined “redevelopment Zones” would suddenly be availible to fund “education and county services such as children’s health” as McNea states is hogwash.

    If the RDA goes away then I imagine the tax increments that fund it would also go away thus lowering peoples property tax bills. At least the Tax bill of people owning land that is in the RDA zone.  I don’t live in a Redevelopment Zone so I don’t pay the increment – therefore it wont affect my bill nor anyone elses outside the zone.

  9. Jerry Brown, Spanks Reed, and his minions @ RDA. . You arragant bunch of B######s finally found your places.
      Pete. find the money trail. 3 billion in the down town? Should be a snap for a guy like you!
      Mr Moon Beam, Strikes OUT Mr. Sunshine I’m Loving this.
    Let’s see who “is” in Sunshine’s line up!
      Finally we see the Light By the Silvery Moon!

  10. “Redevelopment money” you misunderstand how tax increment works

    “If the RDA goes away then I imagine the tax increments that fund it would also go away thus lowering peoples property tax bills. At least the Tax bill of people owning land that is in the RDA zone. ” 

    If RDA is closed by Legislature and Brown the existing property taxes will remain the same for property owners.

    Slowly over 10-20 years incremental taxes will go to where they was diverted and only small amounts taxes will be available until redevelopment bonds, close down admin costs and complete legally committed projects are paifd off

    Reed has to make baseball land purchases and stadium deal by June to fulfill his political promises to Wolff  

    He will like other former San Jose Mayors, City Managers, Council and senior staff get rich lobbying Council members and staff for land use approvals and city contracts after he leaves office

    Redevelopment takes money from state, counties, special tax districts and colleges / universities but not K-12 schools since state general fund makes up taxes taken by redevelopment leaving less for public uses

  11. Tony D – you want A’s in San Jose so bad you are being fooled about A’s stadium deal

    San Jose city / rda government has a very very poor record of giving away millions to developers in taxes, credits, improvements, under-market land prices, lowering selling price after the deal was done, faked up economic benefit estimates, future tax subsidies to justify political sweetheart deals where city gets little or nothing in return unlike San Francisco Giants stadium deal which was privately financed and benefited SF taxpayers

    San Jose can not afford to give Wolff many more millions in taxes for baseball stadium by

    city / rda paying for improvements that other developers would normally pay for like sidewalks, streets, lights, utility relocation and park improvement

    city / rda buying up land and improving it then selling / leasing to Wolff for under-market price

    council rezoning land to give Wolff millions in additional profits

    city taxes paying for sports authority to promoting A’s baseball

    below market parking leases

    renegotiation Wolff’s previous deals to lower purchase price – Earthquakes deal etc or selling Wolff parking lots or city owned property below market price

    There are many way to subsidize sports stadiums that average person is unaware or believes lies that stadium is privately funded

    You can fool some of the people all the time like Tony D but you can’t fool most of the people with the same old funny tax subsidy redevelopment development deals and fake benefits most of the time anymore

    • “…city gets little or nothing in return unlike San Francisco Giants stadium deal which was privately financed and benefited SF taxpayers.”  WOW!!  Just WOW!!  It is now painfully apparent what I’m dealing with on this thread.  I rest my case.

      • Hey, TD—Read the entire statement in context. Don’t just cherry-pick a few words and pretend you have refuted the statement.
        If that’s the best you can do then it is obvious what the rest of us are dealing with on this thread.

  12. Baseball Stadium is NOT 100% privately funded as a few uninformed or financially naive people on SJI have frequently stated, or San Jose voters would not legally be required to vote to approve or disapprove city taxes spent on proposed A’s Stadium

    ” 3. Who is paying for the new ballpark ?  How much will the ballpark cost the public?

    The Major League Baseball team would be responsible for the cost of constructing and operating the ballpark facility. IT IS PREMATURE TO DEVELOP AN ESTIMATE OF THE COSTS TO THE REDEVELOPMENT AGENCY ASSOCIATED WITH THE POTENTIAL BALLPARK. ONCE THE TOTAL AGENCY INVESTMENT IS KNOWN, AN ADDITIONAL ECONOMIC ANALYSIS WILL BE CONDUCTED.

    Also, following the established Negotiating Principles, PRIOR TO ANY FINANCIAL OR LAND CONTRIBUTION FROM THE REDEVELOPMENT AGENCY, A VOTE BY THE CITIZENS OF SAN JOSE WILL BE REQUIRED. ”

    http://probaseballforsanjose.com/faq.html

  13. So much for the lie that the ballpark doesn’t drain public funds from essentials like schools, etc. How do these guys get away with it?

    • So let me get this straight: if I PRIVATELY FINANCE a pool in my own backyard, that would somehow drain public funds from essentials like schools, etc.?  Again, for the umpteenth time, look up the word “Privately” when it comes to the proposed ballpark financing.  By the way, I don’t see much people here (probably Giants fans) drawing parallels to AT&T Park in SF; you know, that PRIVATELY FINANCED Yard of the Big Giants.  Maybe because it’s proven to be a good thing for the City of SF…yah think!?

      • You can’t really be this naive, can you?
        It’s fine if you want a baseball park in San Jose more than anything else in the world, but please don’t patronize those of us who actually look at the facts.
        You can be a ballpark booster all you want but don’t expect the rest of us to believe your version of reality.
        Talk to people who have worked with Lew before. You will find your distorted picture of “privately financed” is very different from Lew’s past deals and what he is expecting from this deal.
        Perhaps you don’t mind seeing our City played for a patsy but I do.