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Proposed law may bring back redevelopment

Posted: Friday, Jan 3rd, 2014

SACRAMENTO — Efforts to refurbish California’s blighted urban areas may soon get new life.

When the state’s more than 400 redevelopment agencies were disbanded in 2011 by Gov. Jerry Brown to shore up an ailing economy, it sent local governments scrambling to finish ongoing projects and squirreling away funds for future ones.

The elimination also sparked a flurry of activity by lawmakers to keep the agencies intact, all to no avail.

More recently, Senate Bill 1, which would reincarnate redevelopment agencies, died before making it to Brown’s desk, and Assembly Bill 1080, authored by Assemblyman Luis Alejo and co-sponsored by 12 other Assembly Democrats, is being retooled after it was suspended in August.

Now, Los Angeles-based attorney Philip Kohn has authored a proposed law that would essentially reinvigorate the agencies.

The California Jobs and Education Development Initiative Act — also known as the JEDI act — would pay for projects using a complex financial system known as tax increment funding, which uses property tax increases to pay for redevelopment projects.

Still in its infant form, it is currently being reviewed by state legal counsel and will begin circulating in February. If proponents are able to gather just over a half-million signatures, it will appear on the June 2014 ballot.

If voters pass the law, it would allow cities to replace redevelopment agencies with new Job and Education Development Initiative agencies, and give a 40-year extension on approved redevelopment projects.

It would also revise the definition of blight to include areas of high unemployment.

Proponents also say that the economic development would help fund public schools.

JEDI campaign spokesperson Stu Mollrich said the law would be a boon for California, which has an unemployment rate 20 percent above the national average, with more than 1.5 million Californians out of work.

“The dissolution of redevelopment has eliminated an estimated 300,000 good paying, predominantly union jobs throughout California,” Mollrich said.

In a prepared statement, Alejo said he supports efforts to give local governments opportunities to fund revitalization efforts, which he said increases employment.

“That’s why I have proposed an alternative to provide a viable option targeting the state’s disadvantaged poorer areas and neighborhoods,” he stated. “I look forward to studying this new initiative more closely.”

“Since the dissolution of redevelopment agencies, communities across California are seeking an economic development tool to use,” Alejo said. “Redevelopment was a multi-purpose tool that focused over $6 billion per year toward repairing and redeveloping urban cores, and building affordable housing, especially those areas most economically and physically disadvantaged.”

Designed to help communities by improving blighted areas, redevelopment programs were hailed by proponents as a way to breathe life into low-income communities. But critics alleged that some governments were using the money for areas already slated to be improved, and to build businesses such as shopping malls and thereby boost their own general funds.

At the same time, Watsonville city officials point out projects such as the Watsonville Civic Plaza and Library, which were built using redevelopment funds. They also say the funds helped business owners with façade improvement and provided a $300,000 loan to help Fox Racing Shox build up its business, among other things.

State officials, meanwhile, are still trying to force local governments to pay back funds they believe were improperly used for redevelopment projects after the agencies were disbanded.

Watsonville City Manager Carlos Palacios said communities like Watsonville, which is still digging its way out of the economic recession, and still suffers from high unemployment, stand to benefit from such a law.

He pointed to the ongoing Manabe-Ow Business Park and downtown revitalization efforts.

“There is a very big need for working class communities especially to have some kind of plan available to assist with their redevelopment efforts,” he said.

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