Capitol Alert: Redevelopment decree will touch off political frenzy

Capitol Alert

The latest on California politics and government

January 3, 2012

Redevelopment decree will touch off political frenzy

The Supreme Court's decree that Gov. Jerry Brown and the Legislature legally abolished redevelopment will touch off a political feeding frenzy.

While city officials who control more than 400 local redevelopment agencies push Brown and the Legislature to keep them alive, a convoluted process for winding down the agencies will begin, as Bill Fulton, publisher of the California Planning and Development Report newsletter, lays out in a lengthy blog entry.

"The Supreme Court's redevelopment ruling...didn't just kill redevelopment agencies," Fulton, an expert on local development issues, writes. "By upholding...the kill-redevelopment bill...the court ruling also triggered an entire funeral procession that will shut the agencies down and transition their debt and their assets to other agencies.

"That process is sure to trigger more controversy - and probably lots more litigation - as cities try to protect assets they transferred away from RDAs last year and other agencies - the state, counties, and school districts - try to grab hold of them. It also puts each county's auditor-controller in the middle of this process. But AB 1x 26 essentially represents a state takeover of tax-increment funds that are not required to pay debt by giving enormous power in the process to the Department of Finance."

Fulton goes on to speculate how a newly created "oversight board" for each of the redevelopment agencies will be formed and operate, with the state controller and the state director of finance overseeing them.

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