Reeve Throws Punches at Redevelopment, Calls Mayor's Contentions 'Misleading'

, Derek Reeve is again distancing himself from the opinions held by a majority of the City Council.

While Laura Freese and Sam Allevato are to annihilate redevelopment agencies—with Freese, chair of the San Juan Capistrano Community Redevelopment Agency, going so far as to travel to Sacramento to share her opinions on it—Reeve is supporting it. At the crux of his argument is the substantial amount of debt the San Juan Capistrano Community Redevelopment Agency has created and the money spent on projects he sees as unfit for the intent of redevelopment agencies.

"Unfortunately, the only true achievement of our [Community Redevelopment Agency] has been its debt in [San Juan Capistrano], which has ballooned to nearly $50 million and is losing $6.2 million per year," Reeve wrote in a letter to the governor dated Feb. 28.

"While the goals of the CRA may have been well-intentioned, here in SJC the agency has morphed into little more than a vehicle to award politically connected cronies with “free” money at taxpayer expense. The result is the mountain of debt that our little town of 34,000-plus people now carries," the letter continues.

Reeve considers himself the only "true fiscal conservative" on the City Council, a title that is often evidenced by the 4-to-1 votes cast on decisions about issuing bonds, delaying debt payments and lending or loaning money to corporations and nonprofits. He is regularly the sole dissenting vote on such matters, although at the most recent , he was joined by Larry Kramer on a decision to not grant the Open Space Foundation $25,000 for infrastructure improvements on public land, and by Freese in a vote to not give money tofor its Every 15 Minutes program.

On Jan. 10, Brown unveiled his budget proposal and pitched his idea to get rid of the approximately 400 redevelopment agencies in California as a way to redirect $1.7 billion in tax revenues the agencies collectively generate annually to education and local services. Mayor Allevato has since compiled a list of about 40 projects funded with redevelopment agency money that he says have positively shaped the aesthetics of the town, improved infrastructure and created hundreds of jobs.

In his most recent message to the public, titled "Understanding the Importance of Redevelopment to Everyone," Allevato writes: "Redevelopment serves as a catalyst for private investment by providing the initial plan and seed money that ultimately breathes new life into many areas."

"Our San Juan Capistrano Community Redevelopment Agency has done just that time and again since it began nearly three decades ago ... [a recent example] includes the reopening of the downtown movie theater, which created 25 job, eliminated blight and has already made a hug difference to the downtown restaurants and businesses."

In his own letter, Reeve says this is "highly misleading," because Allevato's list includes projects that didn't cure blight. Reeve focuses on redevelopment agency's $9.6-million purchase of the 56-acre Kinoshita Farm. Portions of the farm were soon sold off to other public agencies, a transaction that Reeve contends benefited the Kinoshita family more so than taxpayers.

The farm "is not even within the CRA boundaries on the map," he wrote.

"An internal city memo reveals that the well-connected Kinoshita family said they would sell the property ONLY if they could avoid paying taxes on the transaction," Reeve explained. "So the city structured the deal such that the Kinoshita family has collected tax-free, interest-only payments averaging $650,000 a year for 20 years for a total of $13 million thus far,  while the taxpayers still owe nearly the entire principal amount."

Reeve, a political science professor, concludes his letter by writing that the Kinoshita Farm is "just one example" that shows how "ambitious" politicians can abuse redevelopment agencies.

Editor's Note: This article correctly identifies the amount of money the Open Space Foundation was seeking from the city for infrastructure improvements.