Eminent Domain Report

As we have previously reported (Fate of Redevelopment Remains in Limbo), the bills to eliminate redevelopment agencies have languished due to Republican opposition.  With so many redevelopment agencies scrambling to use or secure redevelopment funds in an effort to protect them from being taken by Sacramento and with shortfalls in property tax revenues due to declining property values, redevelopment agencies are no longer as tempting a target for bridging the State’s budgetary shortfall.  

While redevelopment agencies may survive this budget cycle, the fight over their abolition has subjected them to pointed criticism for various alleged abuses.  If redevelopment is to survive in the long run, some of those abuses, whether real or perceived, must be remedied.

A new bill, SB 286, introduced by Senator Rod Wright (D-Los Angeles), with the backing of the California Redevelopment Agency, is aimed at doing just that.  This bill takes aim at many of those hot button issues that have made redevelopment so controversial in California.

For example, Palm Desert’s use of redevelopment money to renovate greens and bunkers at a local golf resort created a major uproar.  SB 286 addresses this head-on by prohibiting the use of redevelopment money for golf courses.  To blunt criticism of the use of redevelopment funds for professional sports arenas, and perhaps to supplant AB 1234 (a blanket prohibition on use of redevelopment funds for stadiums), SB 286 would require local voter approval before tax increment funds could be spent on professional sports facilities. 

Criticism that redevelopment agencies are spending money on economic development that would otherwise be earmarked for education is partially addressed by excluding from tax increment revenues transferred to a redevelopment agency any funds considered educational entity property tax revenues.  The catch is that this would apply only to tax increment revenues generated from redevelopment projects established after January 1, 2012. 

The bill is scheduled to be heard in the Senate Governance and Finance Committee on Wednesday.  That hearing should give us some indication as to whether it will garner bipartisan support.  We will continue to track this bill and provide updates on a regular basis.