Local Governments Scramble To Create Successors To RDAs

A fortnight after the California Supreme Court ruled that the state of California has the authority to dissolve the redevelopment agencies maintained by counties and cities throughout the state, San Bernardino County and local municipalities have begun the process of designating themselves as the successors to their respective redevelopment agencies.
Redevelopment agencies are, or were, adjuncts to local government intended to eliminate blight by encouraging economic development. Redevelopment agencies were empowered to issue bonds and use the proceeds from the sale of those bonds to create infrastructure or undertake improvement projects within a designated redevelopment project area. That infrastructure was intended to spur development and eradicate blight, thereby increasing the value of the property in and around the project area. The increase in property tax realized as a consequence of the improvements would then theoretically be utilized to debt service the bonds, i.e., make annual payments over a period of time – usually 20 to 30 years – to the bondholders.
Last year, governor Jerry Brown induced the state legislature to pass a law that called for the elimination of redevelopment agencies and for money normally passed through to them by the state to be utilized for education and law enforcement funding.
On January 3, the Chino City Council adopted a resolution designating the city as the successor agency to the redevelopment agency.
That reorganization will have an impact on the city’s cultural arts center undertaking, which was to include a 350-seat theater. The council early last year earmarked $990,000 for a design contract that went to WLC Architects of Rancho Cucamonga. Those plans will now be abandoned or lie fallow until some alternate means of financing the project can be had. Also, plans for the completion of Ayala  Park have been put on hold.
The city was also using roughly $2 million a year to cover the salaries of municipal employees who were reported as performing work related to the redevelopment agency. It is unclear how the city will continue to cover the cost of their salaries and benefits. One option is for the city to lay off seven to 13 employees.
On January 9, the Yucaipa City Council, with councilwoman Denise Hoyt absent, voted 4-0 to dissolve the city’s redevelopment agency and have the city inherit the agency’s debts and assets.
Yucaipa city manager Ray Casey told the council that timely action on the council’s part to comply with the new law will allow the city to recover $250,000 in administrative costs related to the phasing out of redevelopment.
California’s cities have until today, January 13, to declare themselves as the successor agency to their redevelopment agency or allow another agency such as the county to oversee bond payments, administer programs begun before the redevelopment abolishment law went into effect and dispose of properties acquired by the agency.
In Yucaipa’s case, it has $5.8 million tied up in the Uptown Streetscape program to recontour a half-mile portion of Yucaipa Boulevard and make improvements designed to benefit businesses in the area.
On January 10, the San Bernardino County Board of Supervisors voted to have the county become the successor agency and the successor housing agency for the county redevelopment agency and become the successor agency and the successor housing agency for any redevelopment agency of any city or joint powers authority within the county that chooses not to elect to become the successor agency of its respective redevelopment agency.
According to Mary Jane Olhasso, the administrator of the county’s economic development agency, the county, like Yucaipa, stands to gain “at least $250,000 for the express purpose of administration of the successor agency” by taking the action it did. Olhasso said, “At a future board meeting, the board will consider establishing a new budget, transferring all resources the successor agency is allowed to retain, approve semi-annual obligations schedules, and direct staff to transfer all real estate assets to the new entity. The successor agency is authorized to continue to pay and meet the enforceable obligations of each former redevelopment agency. The successor agency may retain the housing assets and functions previously performed by the redevelopment agency.”
On the evening of January 10, the Loma Linda City Council adopted a resolution activating the Housing Authority of the City of Loma Linda and a second resolution to have the city of Loma Linda serve as the successor agency to the Loma Linda Redevelopment Agency. By that action, the housing authority will retain the housing assets and function previously performed by the redevelopment agency.
In a specially-called meeting held at the Ontario Convention Center on January 11, the Ontario City  Council pronounced itself as the successor agency to the Ontario Redevelopment Agency and transferred the agency’s housing assets and functions to the Ontario Housing Authority.
In a number of cities throughout the county, officials were rushing this week to meet the January 13 deadline. Upland city attorney Bill Curley, whose law firm Richards, Watson & Gershon represents more than two dozen municipalities in Southern California, was booked solid on Monday, Tuesday and Wednesday with meetings related to creating successor entities for redevelopment agencies.

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