22 Aug 2014
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Big State Grab Could Slow Big Projects

A $50 million renovation of the Civic Auditorium might be realized at a slower pace as the city puzzles through how to recover from recent $12.7 million payment demanded by the state.

Big State Grab Could Slow Big Projects Big State Grab Could Slow Big Projects

Santa Monica will reevaluate in August its timelines for some major public construction projects after it was forced to relinquish $12.6 million in funds formerly dedicated to redevelopment.

On the state's order, the city turned over the money to the county auditor earlier this month, Elsa Trujillo, Senior Development Analyst, reported Monday in a memo to the City Council.

Trujillo said the payment was made "under protest" and with "complete reservation of all rights, including, without limitation, challenging the legality of the [state's] demand, its calculations and the mechanism for its enforcement."

It's the latest in an ongoing battle between cities and the state over control of public money that started when the state dissolved all redevelopment agencies, forcing cities to transfer millions of dollars in redevelopment money to school districts.

Cities across California fought state legislators in court, and the cities lost, requiring them to make the payments to other "taxing entities," which include school districts.

A state law adopted in late June required cities and other governments with redevelopment agencies to have their redevelopment money assessed by July 9. Though many had already made property tax payments, the state Department of Finance contends that very few, if any, correctly adjusted their amounts, due mainly to confusion over deadlines imposed by the Supreme Court. By July 12, cities were required by the law to make payments to other governments—including school districts—based on the new assessments.

Had it not made the payment, Santa Monica would have been subject to "severe civil penalties of 10 percent of the amount owed plus 1.5 percent of the amount owed for each month that payment is not made," Trujillo said.

Founded in 1957, the former Redevelopment Agency of the City of Santa Monica, was one of the oldest in the state. It revamped portions of downtown, including, more recently, several parking structures and . Major projects are still in the works: the , the and the , among others.

City Manager Rod Gould has said the city would move forward to build existing projects that were already under contract before the Supreme Court ruling.

In February, the city become the "successor agency" of the redevelopment agency, and elected to carrying out existing projects in various stages of development.

"$12.7 million is something that would make us pause on some projects, but really, it will make us look at doing them another way," said Deputy City Manager Kate Vernez.

Vernez said that means looking at other funding mechanisms, such as bonds or private-public partnerships. Though no projects are likely to be scrapped, she said they might be slowed down.


"We’re of course going to be proactive and look at all of the projects that might be impacted," she said. "The Civic is one that probably will be impacted."

At Pico Boulevard and Main Street, the historic Civic Auditorium is a local landmark and a popular venue for monthly shows and conventions. It is slated to undergo $50 million in renovations, mostly strucutral seismic upgrades. Construction was initially forecast to begin in spring 2013.


Vernez said city staffers will prepare a report for the City Council at its Aug. 14 meeting with an updated proposal on how to move forward with the former redevelopment projects.

— Patch editor Peter Schelden contributed to this report.

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