Alhambra’s main agent to lure new businesses to the city officially dissolved on Wednesday, but it doesn’t appear to be going away anytime soon.
The state shut down more than 400 redevelopment agencies, including Alhambra's, but city officials plan to preserve at least some of its functions, which are responsible for bringing in a long list of national retailers including Starbucks, LA Fitness, Toys R’ Us, Costco, Taco Bell, Kohl’s, Volkswagen. Support has ranged from $136,000 to Starbucks in the 1990s, to $1.2 million to create the Renaissance Plaza at Garfield and Main, to free rent to Subway in exchange for renovations. Smaller restaurants and bars such as Havana House or 38 Degrees were among the recipients, as was the Lizard Theater and housing developments.
Critics, among them Governor Brown, questioned why tax dollars should go to billion-dollar retailers instead of funding cash-strapped education and public service initiatives. This lead to the state decision to shut them down on February 1. But Alhambra's City Manager, Julio Fuentes, who is president of the California Redevelopment Association and a leading advocate for the role the agencies play in fueling private investment, said that the city will find other ways to continue its functions.
“Private sector is our lifeblood,” Fuentes said. “We are considering adopting an ordinance that would enable us to do economic development similar to what the agency did in its former life." Although he said there were challenges ahead, none of the agency staff will be laid off. Instead, they will now be paid through the city’s general fund.
If it plans to continue, the redevelopment agency will have to find new ways to support itself. Previously funds came primarily from tax increments on property taxes. Fuentes said it will be a challenge, but they should be able to find other sources. “We could use sales taxes, we could use property taxes from that individual project,” he said. “We could also probably use any type of grant money, in particular though HUD.” Other options include tapping into reserves, inter-agency loans, and creating special districts within downtown corridors. Because Alhambra is a charter city, and can make many of its own rules without approval of the state, Fuentes said he believes this should not be a problem.
But local state representatives, reflecting the decisions out of Sacramento, raised questions about the efficacy of redevelopment programs. “Redevelopment agencies definitely have a checkered past,” said Steve Veres, the district director for State Senator Kevin de Leon. As California starts making painful cuts to education and housing, he said, “It’s hard to defend redevelopment as it stands now.”
Veres cited projects in other cities where funds that were initially intended to alleviate urban blight instead went toward upscale development such as a luxury golf course upgrade in Palm Desert.
Assemblyman Mike Eng, whose office is in Alhambra, defended the redevelopment agencies, saying that they could be a powerful engine for affordable housing and economic development. "While I was and continue to be supportive of many of the Governor’s efforts to balance the state budget and eliminate our ongoing structural deficit, I did not support his proposal to completely eliminate our redevelopment agencies," he wrote in an e-mail. Instead, he supported legislation that would allow cities to voluntarily opt to remain in the program, which Alhambra had intended to do.
Without that option, Alhambra local officials maintain that the cuts will hurt the city, even if much of the agency operations go on. Fuentes said that he had just returned from speaking at the International Shopping Center’s Conference where a number of companies said they planned on bidding on the Alhambra Place mall. The former home to Mervyn’s it’s been vacant for a number of years. Fuentes maintains that redevelopment funds have gotten that space to a place where a major retailer could move in. “If that product doesn’t get developed,” Fuentes said, “it’s going to be if redevelopment is not there to fill the gap.”
*An original version of this story misrepresented Assemblyman Mike Eng's stance on redevelopment agencies. He supported a voluntary opt in program. The story has been corrected.