Local Politicians Rally 'Round Redevelopment

More than a dozen East Bay politicians and affordable-housing advocates rallied in downtown Oakland on Wednesday to protest Gov. Jerry Brown's plan to shutter the state's redevelopment agencies. 

Protesters joined the pols in Henry J. Kaiser Memorial Park on 19th Street to condemn the governor's proposed cuts, saying the budget would put more than 300,000 jobs at risk and kill $40 billion in economic activity statewide. 

The proposal would be particularly devastating for unincorporated communities “because they don't have any other resources aside from the state," said Linda Mandolini, the executive director of Eden Housing. 

Eden Housing manages various affordable housing projects in San Leandro, including Estabrook Place, with 51 apartments for seniors.

“This proposal represents more of the same misguided and illegal state budget raids of local government funds that voters have repeatedly sought to end,” said Oakland Mayor Jean Quan. “It is penny-wise and pound-foolish to take away one of the state's most effective economic development tools.”

Quan gestured to the historic Fox Theater and the 1,000 affordable housing units surrounding the square. She said both were built thanks to $67 million in redevelopment funds invested in the area, which in turn spurred an additional $450 million in private investment.  

Union City Mayor Mark Green called Brown's budget “one of the worst proposals that has come out of Sacramento [in] 40 years.”

He listed his redevelopment agency's accomplishments, which included cleaning up a site contaminated with PCBs and replacing it with affordable housing.

Twenty percent of the property tax revenue used to fund redevelopment agencies is required by law to be spent on low-income housing.

“That's a lot of money lost for affordable housing,” Mandolini said. 

Bob Glover, executive director of the Building Industry Association of the Bay Area, a trade group, pointed out that aside from hurting an already ailing construction industry thirsty for jobs, cutting redevelopment funds would make it “virtually impossible” to meet the state's greenhouse gas initiatives with smart development.

But two public figures from Contra Costa County, who lingered at the back of the crowd, held a different view.

Contra Costa County District 1 Supervisor John Gioia, along with the president of the Deputy Sheriffs Association, Jim Bickert, came to the event to voice their support for Brown's proposal.

Redevelopment money is property tax that is diverted from other local agencies like schools, police departments and firehouses, they argued, echoing Brown's stance.

In light of the large deficit, they said, municipalities should reexamine their priorities and take care of core services first.

“Before we start building nicer buildings, we need to take care of some of government's core responsibilities,” Brickert said.    

That view is backed by the non-partisan Legislative Analyst's Office (LAO), which has concluded there's no evidence that redevelopment agencies spur overall regional or state economic development. The LAO issues an annual assessment of the governor’s budget proposal intended to inform lawmakers before their vote.

The LAO released a new report on Wednesday in advance of a Senate committee hearing on redevelopment that reiterates its position on the issue. The report also challenges local governments' claim that eliminating redevelopment would cause the loss of 304,000 jobs. 

This job loss number, cited by Quan at yesterday's rally, comes from a report by the California Redevelopment Association, which represents local redevelopment agencies. The LAO calls the methodology and conclusion of the report "seriously flawed."

"In our view, it vastly overstates the economic effects of eliminating redevelopment and ignores the positive economic effects of shifting property taxes to schools and other local agencies," the LAO report asserts. 

The LAO concludes that, after paying off existing debt obligations on redevelopment projects, an estimated $200 million would be distributed to local governments in 2011-12, in proportion to their shares of property tax. 

Redevelopment programs, the report found,  divert revenue from local governments and increase state education costs, the programs have limited transparency and accountability, and “no evidence” was found that redevelopment increases regional economic development.  

“Given the significant policy shortcomings of California’s redevelopment program, we agree with the Governor’s proposal to end it and to offer local governments alternative tools to finance economic development,” the report concluded.  

Though legislators have till the end of the spring to decide on the budget, Governor Brown is pushing for a decision by March. The Alameda County Board of Supervisors is expected to vote on a $280 million package of redevelopment projects on Feb. 22. 

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