Alert May 26, 2011

Brown Still Hunting Redevelopment Agencies

In his revised State budget released this month, Governor Jerry Brown renewed his call for the elimination of California redevelopment agencies (“RDAs”). The Governor continues to argue that the demise of RDAs will yield approximately $1.7 billion in fiscal year 2011-12 to pay for Medi-Cal and trial court services and, thereafter, the tax increment currently flowing to RDAs will be better utilized by cities, counties, special districts and K-14 schools.

Redevelopment proponents have countered the Governor’s proposal with Senate Bill 286, introduced by Senator Rod Wright (D-Los Angeles). If adopted, SB 286 would reform the current redevelopment law in California, while preserving the RDAs and their basic functions.  Among other things, SB 286 would:

  • Exempt schools from contributing to redevelopment for new and expanded redevelopment project areas adopted after January 1, 2012
  • Limit the total amount of land that can be included in a new or expanded redevelopment project area
  • Prohibit uses of property tax increment revenue for: (a) vacant land of 20 acres or more that has not previously been developed (with an exception for military base conversions); (b) a golf course, race track or racing venue; and (c) a stadium, coliseum, arena or other professional sports facility without voter approval
  • Expand redevelopment authority to include direct assistance for industrial and manufacturing uses and to increase energy efficiency, reduce greenhouse gas emissions and facilitate infill development
  • Heighten blight evidentiary requirements
  • Provide a mechanism for establishment of standard tax increment pass-through methodology
  • Cap interest rates on money borrowed from the local legislative body
  • Require performance audits of RDAs by the State Auditor and provide funds for those reviews
  • Require community input and additional information on implementation plans

SB 286 is still being considered by the Senate Governance and Finance Committee and no hearing is currently scheduled. Click here for a copy of SB 286 or information regarding the status of the bill.