Redevelopment Assets Tucked Away, Protected from State

The Watsonville City Council had a clear message for Gov. Jerry Brown on Tuesday night: You can't have our cash.

"I support the governor, but I'm not going to give him our money," Councilman Oscar Rios said.

The City Council made quick work of transferring the remaining $750,000 cash in the Redevelopment Agency fund to the Manabe-Ow business park project, approved a $2 million loan to back the rehabilitation of an aging low-income apartment complex and gave the city eight rather unimportant parcels of land, all so state leaders can't take control of the assets.

Brown has proposed eliminating redevelopment agencies statewide and redirecting the tax monies that support the programs back to the state general fund to pay for schools, prisons and other services. A vote on Brown's proposal could come as soon as the end of the week.

“If we don’t encumber these funds, they might very well be lost," Marty Ackerman, Watsonville's director of redevelopment and housing, told the council.

So the long-awaited Manabe-Ow business park, approved by the council last fall, will get $750,000 to plan and begin constructing the infrastructure needed to support the 95-acre development. The owner-participation agreement requires that the Manabe and Ow families also make investments in the project.

City leaders are optimistic that funding the design of the business park will spur interest from businesses and draw companies to the area.

“This is our biggest bang for the buck," Ackerman said. “We are trying to get this project jump-started for the community."

The development, just east of Highway 1 near Ohlone Drive, is supposed to create at least 2,000 jobs and, if businesses don't establish 50 jobs on the site in the next 20 years, they must pay back the city money, according to Ackerman.

“This is our best chance and why it’s our No. 1 priority," City Manager Carlos Palacios said, adding that the $750,000 dedicated to the project will wipe out the redevelopment funds.

The council approved the investing in Manabe-Ow with a 4-1 vote. Councilwoman Nancy Bilicich voted against the proposal, Councilman Edward Montesino recused himself because he owns property affected by the decision, and Councilman Emilio Martinez was absent.

Next, the council committed $2 million to rehabilitate the 200-unit low-income Sunny Mesa Apartments. The Ross Avenue complex, constructed in 1969 through a partnership of the NAACP and the Presbyterian and Methodist churches, could use a facelift. About a dozen residents and church members, many of them retirees, attend the meeting to show support for the proposal.

"We kept it up the best we could for the past 40 years ... but it does need some renovations," said church member Barbara Davis.

The community partnership sold the property to Mid-Peninsula Housing and South County Housing a couple years ago. Those agencies are seeking low-income housing tax credit to keep rents low for residents. The $2 million funding commitment should help them secure that tax credit, according to city staff.

The money for renovations amounts to about $17,556 per unit and will be dedicated to projects like carpeting, cabinets and heating.

"This is the good things that redevelopment can do," Palacios said.

The council also voted to take possession of eight redevelopment properties: four parking lots or pieces or parking lots, an alley, a parcel at Front and Union streets and two "fairly useless" slivers of land, Ackerman said.

Similar decisions to tie up redevelopment funds have been made by city councils and county boards of supervisors across the state. The Santa Cruz City Council, at its meeting Tuesday night, rubber-stamped a series of projects and transferred ownership of several redevelopment-run properties to the city.