*Updated 8.25.11, originally published 8.18.2011
With the state scheduled to end all redevelopment agencies this October — which in Alhambra have been responsible for a large part of recent development — local leadership is preparing to commit $4.4 million to opt into a voluntary program.
"We are paying in to the program under protest," City Manager Julio Fuentes told the Pasadena Star-News. Fuentes and Alhambra City Council members maintain that the current development of the city would not be possible without the Alhambra Redevelopment Agency. "We've always been aggressive at developing and that's been a combination of the private sector and what we do here," Fuentes told the Star-News, pointing to projects such as the mixed-use space set to replace the old library on Main Street. "If (redevelopment) goes away we become a traditional city."
At the August 8th Alhambra City Council meeting, the council took the first steps to transform the Alhambra Redevelopment Agency and authorize the initial $4.4 million payment. In subsequent years, the city would have to pay a minimum of $1 million. The funds come from the Alhambra Redevelopment Agency and would go to the state to fund schools, public safety and transportation services.
Governor Brown eliminated the redevelopment agencies on the grounds that they are draining needed state social resources and instead often serving as private developers. Non-partisan groups have estimated that about $2 billion annually is diverted from K-14 schools alone. Overall, state redevelopment agencies receive in excess of $5 billion of tax revenue that could otherwise fund education, counties, local government and special districts.
But backers of redevelopment agencies argue that they spur development and increases overall revenue. A lawsuit has been filed by the California Redevelopment Association along with several cities to overturn the state’s decision. The state Supreme Court has agreed to hear the case with a final decision planned for January 2012. Until then, the bill will not go into effect. But there's no financial relief from this delay since the city's first payment was not due until then under the original plan.
The Alhambra leadership have been highly critical of the policy, often calling it "pay to play." "We are basically forced to do this by the State of California," Alhambra Councilman Gary Yamauchi said. "With the loss of the redevelopment agency they want us to pay a certain amount of money. Everyone calls it extortion and that's probably exactly what it is." Fuentes said at the June 15 ARA/City Council joint workshop that "voluntary means acting or done willfully and without constraint or expectation of reward. The bill violates the California constitution which prohibits the transfer of any of these funds to schools and transit districts, and prohibits the legislature from restricting the use of taxes imposed by local government for local purposes.”
But critics of Alhambra’s redevelopment agency vehicle argue that it has lost sight of its mission of curing blight and providing affordable housing and see it being used to largely subsidize retail development. Alhambra resident John Kraft spoke at the August 8th council meeting and said that “the days of using such funds to open future Dog Hauses are over” and that “$5 billion dollars was a lot of money when the state is in such bad financial shape.” (The reference to the Dog Haus was in response to Mr. Fuentes earlier statement that the city would like to continue to operate the ARA to help subsidize the opening of a new restaurant, the Dog Haus, which is to open in the old Baja Fresh location on Main St.)
Residents are not the only critics. Assemblyman Mike Eng, whose district includes Alhambra, voted to abolish the redevelopment agency.
The city is scheduled to take a vote on converting the ARA into the voluntary program at the next council meeting. Despite the remittances the city will have to make, the city council and manager said that they would prefer to continue with it because of the projects currently under development. These projects are focused along Main Street and the Shops at the Alhambra. If the ordinance passes, which it is expected to unanimously, it will commit $4.4 million dollars from the city budget for this year.