As Cities Pick Sides in Redevelopment Battle, Seal Beach Remains Undecided

Ceremoniously gathered at the heart of an urban core built on redevelopment funds, city leaders from across Southern California stood on the steps of the Long Beach police headquarters Thursday to oppose the state in its effort to divert tax revenue from city redevelopment programs.

Representatives from several cities, including Long Beach and Pasadena, which have hundreds of millions of dollars at stake, announced plans to support a lawsuit seeking to overturn two state laws that will dissolve city redevelopment agencies or require the agencies to pay a combined $1.7 billion to the state to continue operating. Calling the new laws, which were passed with the state budget, a “ransom,” the officials said the bills would hurt job creation and the local economy.
 
“This is an attempt to take our destiny out of our hands.  The bills are unconstitutional—it’s plain and simple,” said Long Beach Vice Mayor Suja Lowenthal. Passed as part of the state budget last month, the two laws would eliminate dozens of redevelopment agencies or require them to pay a combined fee of $1.7 billion the first year and $400 million each subsequent year.  

Designed to combat blight, redevelopment agencies designate swaths of the city as redevelopment areas, and any tax growth in those areas each year goes to the city’s redevelopment agency for local improvement projects instead of to the state. Opponents of redevelopment agencies, including Gov. Jerry Brown, say the agencies siphon property tax dollars away from schools and public safety.

In Seal Beach, the City Council acts as the Redevelopment Agency, and it has yet to decided whether to dissolve the agency or pay the state $945,564 to continue it this year and another $220,486 to continue it next year, said Mark Persico, the city’s director of Development Services.

Seal Beach’s redevelopment area is nearly 42 years old, and it extends from west of First Street to PCH and includes the Electric Avenue greenbelt and portions of Hellman Ranch. Last year, the city received more than $2.2 million for projects within the redevelopment area, Persico said. If the city decides to keep the Redevelopment Agency, projects such as the Marina Park expansion could be funded by a combination of redevelopment money and grants. The City Council/Redevelopment Agency is scheduled to vote on the matter in August.

Filed by the League of California Cities, the California Redevelopment Association and the cities of San Jose and Union City on Monday, the lawsuit charges that the legislation violates Proposition 22, the constitutional amendment that “prohibits the state from borrowing or taking funds used for ... redevelopment, or local government projects and services.”