City to pay $1.3M to state to keep redevelopment agency

City to pay $1.3M to state to keep redevelopment agencyBody: DOWNEY - Looking to preserve its redevelopment power and keep valuable funding off the chopping block, the City Council opted into a special redevelopment program on Tuesday, which allows the city to retain control over local redevelopment projects despite Gov. Jerry Brown's recent state budget, which seeks to eliminate all such agencies. In a unanimous vote, the Council reluctantly approved an ordinance, affirming the city's participation in the program, which requires the city to pay nearly $1.3 million to continue its redevelopment agency. City officials, who use redevelopment funds to help spur local development and spruce up blighted areas, lambasted the payment, calling it an "illegal raid on city funds." "I have the perfect word for this," said Councilman Mario Guerra Tuesday night. "It's extortion. They're trying to balance the state budget with this." As part of his 2011-12 budget, Brown proposed eliminating redevelopment agencies effective Oct. 1 in order to redirect nearly $1.7 billion into state allocation funds. Brown's plan, however, allows municipalities to keep their redevelopment agencies if they opt "into an alternative voluntary redevelopment program that requires various payments in lieu of elimination," according to community development director Brian Saeki. "For all intents and purposes, this is a ransom payment by the state," said assistant city manager Gilbert Livas. A coalition of cities has sued to stop Brown, prompting the California Supreme Court to put a stay on parts of the new laws, but Downey and other local cities are joining the state program just in case the governor's budget is upheld in court. According to Saeki, Downey must pay the state more than $1.28 million, but will not make the payment until the court resolves the lawsuit. The amount will be paid with existing redevelopment money, so city services will not be impacted, officials said. Councilman Fernando Vasquez called the payment a "really unfortunate situation." "It leaves a bad taste in my mouth," Vasquez said. "We're moving money around...due to the nonsense up in Sacramento." "I think it sucks," added Councilman David Gafin bluntly. In the past, the city has utilized redevelopment money to help subsidize construction of Porto's Bakery, Bob's Big Boy and other local development projects. Currently, city officials are counting on the funds to help finance The View, the 50-unit, affordable housing complex, which will replace the old Verizon building on 2nd Street. The city normally collects around $5 million in taxpayer-funded redevelopment money each year. The lawsuit challenging Brown's authority to eliminate redevelopment funds is expected to be heard by the state Supreme Court in January.

********** Published: August 25, 2011 - Volume 10 - Issue 19