California Eminent Domain Report

Despite daily rumors to the contrary, neither chamber took up the issue of redevelopment last week.

Both the Senate and Assembly held brief floor sessions Friday morning without voting on either SB 77 or AB 101, the bills eliminating redevelopment. While both houses remained on-call over weekend and today, the next floor sessions are not scheduled until Tuesday, March 29.

Meanwhile, there have been intensive lobbying efforts in support of the CRA and League of California Cities Alternative solution. Essentially, they are proposing that redevelopment agencies voluntarily suspend their housing set-aside for 2011-2012 with an equivalent amount of funds being contributed to local school districts in redevelopment project areas. In exchange, the agency would be allowed to extend the life of its project area for two years. Alternatively, they could contribute up to 10% of their non-housing tax increment revenue stream each year to local school districts for 10 years, in exchange for which they could extend the life of their project areas for one year for each percentage of tax increment so contributed.

Under either scenario, money contributed to local schools by redevelopment agencies could be counted by the State as an offset against its Proposition 98 guarantees to the school district.

Because this would be a voluntary program, it would not violate Proposition 22, which prohibits the State from seizing redevelopment money. However, it is unclear whether this proposal is gaining any serious traction.

In view of this public silence, it may be tempting to think that the abolition of redevelopment could slip through the political cracks for this budget cycle. This would be a mistake.

Last Thursday, Ventura Mayor Bill Fulton, publisher of the land-use newsletter California Planning & Redevelopment Report was quoted as bluntly stating I do believe that probably redevelopment will not survive in anything close to its current form. Speaking at a redevelopment conference in Sacramento on Thursday, Fulton urged cities to look for alternatives to traditional redevelopment for financing urban revitalization.

Speaking at the same conference, Steve Shea, an aide to Senate President Pro-tem Darryl Steinberg, said that Brown’s proposal to end redevelopment will fall into place as the larger budget deal come together.

Thus, if the Governor is unable to place the tax extension on the June ballot and instead is forced to proceed with a ballot initiative in November, it is possible that the he may likewise take a new approach to his attack on redevelopment. Some alternative to AB 101 and SB 77 may be in the works. Whether these would be subsequent trailer bills introduce for a simple majority vote or some alternative approach remains unknown.

What is fairly certain is that this battle is far from over.