Officials Condemn Court's Redevelopment Decision

The California Supreme Court on Thursday upheld a law that will abolish , dealing a blow to officials throughout the San Diego region who tried to keep their city agencies open.

The state's high court struck down a companion statute that would have allowed local governments to keep the agencies alive by making payments to the state. 

Mayor Casey Tanaka said he was disappointed by the decision, but called the legislature “the real villain.”

“Their policy decision to extinguish over 400 redevelopment agencies across the State of California will have a noticeably negative impact on local economies and the larger state economy,” he wrote in an email. “Redevelopment has been a catalyst for vital local projects and has been able to address local needs in ways that the State has never been able or nimble enough to address.”

San Diego Mayor Jerry Sanders criticized Gov. Jerry Brown.

“This is a sad day for San Diego,” Sanders said. “Plain and simple, this money grab by the governor will have severe negative impacts on our neighborhoods and our economy for decades to come.”

Redevelopment proponents argued before the court that voter-passed Proposition 22, which bars the state from seizing local tax money, invalidated both laws. Redevelopment agencies are funded by the increase in tax revenue created by projects in their areas.

Supporters of the laws passed by the Legislature earlier this year, including Gov. Jerry Brown, say the money is better used to fund schools and other municipal functions during tight budgetary times.

They cited a state analyst's report that shows the cost of redevelopment growing without any tangible economic benefit to the state.

Brown said the decision will free up more than $1 billion in on-going funding for education and public safety.

Tanaka questioned the long-term benefits of the state's stance on redevelopment, writing in his email that “it will cost them more tax revenue in the long run in spite of the short term gains they expect to reap by taking back this redevelopment funding from local agencies.” 

La Mesa Mayor Art Madrid went further, saying California will become ”worse than a third-world country” as a result of the decision.

The justices determined that Proposition 22 did not address the Legislature's power to close redevelopment agencies, which were created after World War II.

Since the court ruling aborted the plan to allow local governments to buy back into redevelopment, the agencies will be phased out as their currently contracted projects are completed.

. The city of San Diego and many other local jurisdictions were planning to pay the state as well. San Diego was due to pay $70 million.

The agencies not only fund major building projects – for instance, Liberty Station and work on San Diego's waterfront, or a renovation at Sharp Coronado Hospital – but spend 20 percent of their income on affordable housing.

The ruling is not expected to curb financing plans for a new Chargers stadium, said Mark Fabiani, the team's point man on stadium issues. Plans for the stadium proceeded under the assumption that the agencies would be abolished, he said.

Sanders agreed, but added it will still make financing more difficult.

San Diego Housing Federation Executive Director Susan Tinsky called for a new affordable housing funding source.

“In the current economic environment, more people are doubling up, living on someone else's couch, or worse yet, sleeping in their cars or on the street each day,” Tinsky said. “We call on public officials and policymakers at all levels to join in developing and executing a plan to deal with the state's housing crisis now.”

– City News Service, with additional reporting from Patch editors Ken Stone and Jennifer Vigil.