Eminent Domain Report

When last we posted on the topic (see Days that Make Being an Eminent Domain Attorney Exciting: More Redevelopment Developments), the bills that would end redevelopment in California as we know it, AB 26x and AB 27x, had been passed by both the Assembly and Senate, but were left hanging when the Governor vetoed the main budget bills.  It was unclear what life, if any, these budget trailer bills had absent a budget.  The Legislature therefore simply held them without forwarding them to the Governor for his signature.  They have remained in a state of procedural and legal limbo for several weeks.  However, yesterday's announcement that the Governor and Democrat leaders had reached a budget deal changes everything.  With a budget deal in place, the Governor is now apparently ready to sign the redevelopment bills. 

Unlike the Governor's original proposal which would have simply killed off redevelopment in one fell swoop, there is now a two step process.  AB 26x would eliminate redevelopment agencies, while AB 27x allows for the reestablishment of redevelopment agencies if they commit to making payments to Special Districts Allocation Funds and a County Educational Revenue Augmentation Funds.  (See New Bills to Eliminate Redevelopment Agencies Unveiled.)  Agencies that lack the funds to make the payments would simply be gone forever.  The proponents of these bills claim that for this fiscal year, the State will receive $1.7 billion from redevelopment agencies. 

Supporters of redevelopment were quick to respond.  "Redevelopment Supporters Vow Lawsuit if Governor Signs 'Smoke and Mirrors' Budget that Includes Unconstitutional Redevelopment Elimination Bills (AB 1x 26/27)" read a press release issued by the Mend it Don't End It Coalition, a group supported by the California Redevelopment Association and the California League of Cities.  Chris McKenzie, executive director, League of California Cities said, AB 1x 26/27 violate the State constitution.  Voters just passed Proposition 22 overwhelmingly in November to prevent this type of State raid of local funds.  If the Governor signs this legislation, we will file litigation at the earliest opportunity to defend the constitution and the will of the voters. 

John Shirey, executive director, California Redevelopment Association, said, Make no mistake about it: AB 1x 26/27 would lead to the elimination of redevelopment agencies throughout California....We plan to file a lawsuit to prevent this legislation from going into effect."

Redevelopment has been teetering on the brink for several months now.  Each time that its fate seemed to be sealed, political bickering in Sacramento has been its salvation.  However, this feels different.  The Governor's office has announced a press conference at 3:00 to announce the budget deal.  We will keep you posted.