Redevelopment Is Dead. Long Live Redevelopment!

By Sarah Karlinsky, Deputy Director
July 17, 2011

San Francisco Transbay Terminal, part of the redevelopment plan for the Transbay area, which has been thrown into question by Governor Brown's abolishment of redevelopment agencies. Image courtesy Pelli Clarke Pelli Architects

This year has been a wild one for redevelopment agencies in in California. In November 2010, the voters of California passed Proposition 22, which effectively prevented the state from raiding redevelopment agency funds. Then, just a few months into his tenure, Governor Jerry Brown vowed to abolish redevelopment agencies and got fairly close to doing so, despite the extraordinary efforts of organizations like the Non-Profit Housing Association of Northern California (NPH), to save the parts of redevelopment that work best. SPUR also chimed in with an editorial by Gabriel Metcalf arguing that redevelopment should be retained and reformed to promote affordable housing and reinforce California’s smart-growth goals.

As part of the new state budget, redevelopment agencies have once again headed to the chopping block, only this time it’s for real. When he signed the budget in late June, the governor also passed two trailer bills regarding redevelopment, ABx1 26 and ABx1 27. The first one eliminates redevelopment agencies, and the second allows them to continue to exist if they pay certain “voluntary” contributions to schools and special districts. These contributions would require each redevelopment agency to pay its proportional share of $1.7 billion for fiscal year 2011-2012. For every year thereafter, agencies would need to pay their proportional share of $400 million, plus an additional amount tied to the issuance of new debt, in order to keep their doors open.

What is the impact to San Francisco? Fred Blackwell, the head of the San Francisco Redevelopment Agency, has explained that the SFRDA would continue to stay in business, but some of its projects would go forward on a slower timeline, and others may not happen at all. Mission Bay and the first phase of Hunter’s Shipyard will continue to move forward, but the timeline of other projects, such as Phase II of Hunter’s Shipyard and the Transbay Terminal, are more uncertain. Even more concerning is the potential hit to affordable housing funds for those areas.

Groups throughout the state are not taking the news sitting down. The California Redevelopment Association and the League of California Cities are taking a lawsuit directly to the California Supreme Court, asserting that the new laws are unconstitutional.

Until the lawsuit is resolved, the future of redevelopment in California remains uncertain.