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redevelop.JPGHaving repealed the redevelopment authority of local governments two years ago, the state needs to implement an alternative method for improving communities and financing infrastructure and lower cost housing, the Urban Land Institute's California chapters say in a white paper.

And it can be done, the 22-page document says, without threatening the operational finances of local and state governments.

When Gov. Jerry Brown and the Legislature abolished the six-decade-old redevelopment program, under which local governments could put together projects and collect the incremental tax revenues from their construction, they cited its effects on the state treasury.

Local government redevelopment agencies were taking about $5 billion a year, roughly 10 percent, off the top of the statewide property tax pool and the state was being forced, under a ballot measure enacted in 1988, to make up about $2 billion a year of that diversion to local schools.

Since then, the local redevelopment agencies' finances have been unwound, although a number remain to be phased out, and uncommitted assets have been dispersed to other taxing agencies. However, there have been a number of lawsuits filed over how the shutdowns have occurred.

Meanwhile, several bills to create replacements for redevelopment have been introduced, but none has been enacted. Most would expand the authority of cities to create infrastructure financing districts and issue bonds, eliminating current requirements that such mechanisms receive voter approval.

"In light of the demise of redevelopment in California in 2012, we need leadership at all levels of government to put in place a more flexible set of tools, without creating a financial burden on the state or other taxing agencies." Elliot Stein, executive director of the Urban Land Institute's San Francisco District Council, said in a statement accompanying release of the report.

The ULI assembled a panel of government officials, urban planners and consultants to devise a replacement for redevelopment, and it came up with a series of recommendations, including:

-- Reestablish the right of local governments to assemble packages of land for housing and other projects;

-- Allow them to once again use tax-increment financing to service bonds and leverage private investment for projects, as long as the diverted taxes don't imperil state and local budgets;

-- Lower the vote requirement for local development bonds from two-thirds to 55 percent;

-- Streamline regulatory approvals for urban infill and transit-oriented projects; and

-- Require more transparency than the old redevelopment law.

PHOTO: Roof gables are set into place by a framer atop a 69-unit apartment complex under construction in Elk Grove on Jan. 31, 2012. The Sacramento Bee/Randy Pench



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