Just a few years ago, 1181 West Main Street was a decrepit building. Today, it is a Volkswagen dealership — a white palace with rows upon rows of gleaming cars in its display rooms and parking lots. The transformation was made possible with $1.3 million in Alhambra redevelopment dollars.
Richard Wilson, owner of Volkswagen Alhambra and Pasadena, said the Alhambra Redevelopment Agency helped make the move possible: “We were able to get people in there to completely redo the building, which had holes in the roof.”
Businesses can no longer undergo such dramatic makeovers with local redevelopment agency funds since Governor Jerry Brown dissolved the tax-increment funded agencies in February 2012. He argued that at a time of fiscal deficits the agencies were investing money needlessly on private ventures that strayed from the initial intentions of the agency to fight blight, and the funds should instead be invested in schools and infrastructure.
In Alhambra — like in many cities throughout the state — dire results were predicted following the downfall of the redevelopment agency. But the outcome, so far, has been mixed.
Tara Schultz, Alhambra’s interim development services manager, said the improving economy appears to be helping businesses on Main Street, citing the recently opened Salad Farm restaurant as one example. Two businesses in redevelopment zones — 38 Degrees Ale House and Grill on Main Street and L.A. Fitness on Fremont Avenue — also told a reporter they had seen a recent increase in clientele and revenue.
Despite the uptick, Owen Guenthard, director of the Alhambra Chamber of Commerce, said problems could be looming. Alhambra has depended on redevelopment to attract new businesses, he said, because it is an older city that cannot expand much more.
Without redevelopment agencies, future business growth will be difficult, agreed Vanessa Reynoso, Alhambra’s deputy director of redevelopment services. “We kept building on successes that we had,” Reynoso said. “I think it is unfortunate not to have that tool anymore. You can drive down Main Street and see all the projects that have come alive — whether it’s a mom-and-pop store, a corporate location, or auto row. We have built a foundation for a lot of these businesses.”
The California State Legislature first authorized the creation of redevelopment agencies for fighting urban blight in 1945, and the Alhambra Redevelopment Agency was founded more than a decade later in the 1960s.
The agency cleaned up building sites and gathered sales tax increases to pay off debt and to fund more projects along Main Street and Fremont Avenue. Housing projects, shopping centers, restaurants, and retail businesses received assistance from the Alhambra Redevelopment Agency — for example, the Alhambra Regency Plaza received $100,000 in property tax rebates; 38 Degrees received $425,000; and Kohl’s Department Store received $1 million.
Backers maintain these businesses would never have considered Alhambra without the help of the redevelopment agency.
"Redevelopment has created value where there was no value before that. You look at our Toys R Us. There was no value attached to that property. You look at the two parking structures we built," Councilwoman Barbara Messina said at a City Council meeting in early 2012 when the agency was facing closure. "We created value for our city."
Critics of how Alhambra used redevelopment, such as former Ventura City Manager Richard Cole, maintain agencies could have benefited the city much more if they had funded infrastructure and small businesses. “Investing in corporate, generic retailers does not make your town richer, but like every other town,” Cole said. “You go to a city because it is special and has unique small businesses.”
In addition, Cole said, money invested in small businesses is more likely to stay in the city. “If the owner of Joe’s Hardware spends a dollar, it is more likely to circulate again.” Cole said. “If the owner of Costco spends, that dollar will likely leave.”
Alhambra, like other cities throughout the state, is now faced with assessing and putting together a management plan for the 12 properties it owns. These include the Fremont Plaza, parking lots, and a vacant lot on Chapel Avenue. If the city decides it wants to keep the property, it must make a compelling argument to the state for why the city should maintain ownership of the property.
Even after the wind down of redevelopment is complete, Schultz maintains Alhambra will continue to search for creative means to fund development. "Creating jobs creates income for people who live here, and they spend money in their communities. It’s a cycle," she said. "Even though the state has taken [redevelopment agencies] away so they can use the funds for other purposes, it is still really important that cities build their communities. Part of that is building the economy — and we won’t stop doing that just because redevelopment went away."