Capitol Alert

Sen. Elaine Alquist of Santa Clara is jumping into a fight between the 49ers football team and education leaders in her Bay Area community by writing a bill that would allocate $30 million in disputed redevelopment funds toward building a new NFL stadium.

The bill marks the third time in recent years that California lawmakers have written custom legislation at the end of session to advance football stadium projects. Last year, the Legislature approved a bill that provided a speedy environmental review process for a new stadium in Los Angeles. A 2009 bill protected a proposed stadium in the City of Industry from environmental lawsuits.

Alquist's bill is fallout from Gov. Jerry Brown's decision last year to dissolve redevelopment agencies. Santa Clara's redevelopment agency had planned to give $30 million toward the $1.2 billion effort to build a new stadium for the San Francisco 49ers. A county oversight committee created after the redevelopment agency folded decided last month not to use the money for the stadium and instead give it to schools.

The abrupt demise of local government redevelopment agencies due to legislative action and a state Supreme Court decision also means the end of the California Redevelopment Association.

The 33-year-old organization has been the Sacramento lobbying operation for the 400-plus local redevelopment agencies, fighting to keep the program alive in the face of political and media criticism.

"With the dissolution of local redevelopment agencies as of Feb. 1, it has become clear to the board and executive staff that the business plan for CRA is no longer sustainable," the organization's interim leadership said in a statement earlier this month.

About $1.4 billion in redevelopment funds for low- and moderate-income housing would continue to be spent for those purposes under legislation approved today by the Assembly.

Assembly Speaker John A. Pérez crafted the legislation, Assembly Bill 1585, to help ease the transition in the wake of last year's decision to dissolve local redevelopment agencies in capturing funding for state coffers.

AB 1585 was approved by the Assembly, 56-7, receiving two more votes than the supermajority required for passage as an urgency measure.

Five Republicans bucked their GOP colleagues to vote yes: Cameron Smyth of Santa Clarita, Nathan Fletcher of San Diego, Katcho Achadjian of San Luis Obispo, Jeff Miller of Corona, and Kevin Jeffries of Lake Elsinore.

Perez's bill would take effect immediately if passed by the Senate and signed by Gov. Jerry Brown.

A key element of AB 1585 would transfer balances in redevelopment low- and moderate-income housing funds to local housing agencies to be spent for affordable housing.

The bill provides an incentive for local government to allocate the housing funds relatively quickly: 80 percent of the money must be committed within two years and spent within four years.

Funds that remain uncommitted after four years must be transferred to the state Department of Housing and Community Development for use on low-income housing programs in the county from which they came.

Absent AB 1585 - or similar legislation -- the $1.4 billion would be spent on other local government services as redevelopment agencies dissolve, according to a legislative analysis of the bill.

Pérez's measure now goes to the Senate.

* Corrected at 5:10 p.m. to show that five Republicans voted yes, not four. The fifth was Kevin Jeffries of Lake Elsinore.

When more than 400 local redevelopment agencies in California went out of business this year, thanks to state legislation and a Supreme Court decision, it stranded as much as $2 billion in funds that had been set aside for low- and moderate-income housing.

The funds had been accumulated from a 20 percent set aside of property taxes that redevelopment agencies had collected in their project areas -- money that housing advocates often complained was being stockpiled rather than spent on housing projects.

What happens to that money -- whether it will spent on housing or join other redevelopment agency funds to be redistributed to schools and local governments -- is one of the issues left over from redevelopment's demise.

Housing advocates want the money retained for their projects, but it's uncertain whether they will prevail.

As Gov. Jerry Brown sought to phase out redevelopment, he originally proposed that the housing money should be kept intact for that purpose. But when the Legislature passed a bill to that effect, Brown vetoed it, saying it was premature because the entire issue was then before the state Supreme Court.

This year, after the Supreme Court ruled that redevelopment agencies could be abolished, the state Senate passed Senate Bill 654, which would keep the housing money intact. The bill, carried by Senate President Pro Tem Darrell Steinberg, is now pending in the Assembly.

The question arose again Wednesday when two Assembly committees staged a lengthy hearing on what, if anything, will be done to replace redevelopment as a local government tool.

Pedro Reyes, the chief deputy director of Brown's Department of Finance, was asked pointedly about the fate of the housing money and he replied, cryptically, "Unencumbered money is supposed to be swept (distributed to other governments)."

That left legislators and housing advocates wondering whether Brown would sign or veto SB 654 if and when it reaches his desk.

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.