Redevelopment Battle Goes to Supreme Court

Alameda County's unincorporated areas hang in limbo as a months-long battle between redevelopment supporters and the state makes its way to the California Supreme Court this week.

On Thursday, the Supreme Court will hear arguments in — that claims state lawmakers violated the constitution when they passed two laws in June mandating that the state’s 398 redevelopment agencies .

Closing the agencies would turn over $1.7 billion to the state; the money would primarily be diverted to schools and special districts.

The lawsuit claims that the state’s action violates Prop. 22, a measure approved by voters last November to prevent the state from taking money from local government, including the tax increments generated by redevelopment agencies. Meanwhile, state lawmakers say that because they established the redevelopment agencies more than 60 years ago, they have the right to eliminate them.

Should the Supreme Court side with redevelopment, it would leave the state scrambling to find a way to close its budget gap. If the decision falls on the side of the state, some cities could lose a vital funding source for future development projects.

According to county redevelopment director Eileen Dalton, several local projects were made possible in San Lorenzo, Cherryland, Ashland and Castro Valley thanks to redevelopment.

Dissolving the local agency would greatly impact several projects in the works — a firehouse and a community center in Cherryland; a streetscaping project along East 14th Street in Ashland; the long planned development of the Bohannon properties in downtown San Lorenzo.

Thursday’s hearing will give an indication of which way the Supreme Court may be leaning. The court must make its decision by Jan. 15, 2012, when the agencies are expected to come up with half of the $1.7 billion for the 2011-12 budget. The agencies will have to pay the balance in $400 million annual installments.

According to the Mercury News, experts say the Supreme Court decision could go either way.

Loyola University law professor Jessica Levinson told the newspaper that while there are arguments for both sides, the Supreme Court will likely side with the state.

"The court probably has more distaste for getting involved with budget decisions by the governor and Legislature than it does for getting involved with decisions by citizens' initiatives," Levinson told the Mercury News.

However, redevelopment supporters believe the odds to be in their favor. Jim Kennedy, interim director of the California Redevelopment Association told the newspaper, “We think our chances are good.”

Oral arguments in the lawsuit will be heard on Thursday, Nov. 10 at 9 a.m. in the Supreme Court Courtroom in the Earl Warren Building in San Francisco. The City of Union City will also open the Council Chambers Thursday at 9 a.m. for those interested in watching a live broadcast. The proceeding will also air live on www.calchannel.com.