Editorial: Give locals tools for development

Published: Sunday, Sep. 16, 2012 - 12:00 am | Page 6E

Gov. Jerry Brown and lawmakers did California a major service in ending the 60-year-old redevelopment program as of Feb. 1.

It had run its course in attacking blight. It had major successes, and many abuses – such as subsidizing big-box chain retail, shopping malls and auto dealerships. Redevelopment agencies gobbled up too much of the state's property taxes – 12 percent each year. It was money that otherwise would have gone to schools and other public services. The state had to replace that money.

With state-assisted redevelopment now gone, the governor and lawmakers owe it to local government to give them tools to invest in economic development efforts that pass muster locally.

Lawmakers passed four options, which are on the governor's desk.

All of them would narrow redevelopment considerably from what it was before. The bills would ensure that redevelopment could not divert money from schools, which was the big state expense before – $2.5 billion to $2.7 billion a year. All have provisions that make it highly unlikely that local officials would squander funds to subsidize ill-considered developments.

Two, however, stand out that the governor should sign.

One is Senate Bill 1156 by Senate President Pro Tem Darrell Steinberg, D-Sacramento.

We have urged the governor and legislators to give local officials more flexibility to finance affordable housing, transit-oriented development and truly urban projects that have difficulty securing private funding.

Steinberg's bill would do all of that. It seeks to limit tax-increment funds to projects within defined "transit priority areas," "small walkable communities," and sites zoned for "clean energy manufacturing."

For example, projects within a transit priority area would have to be within a half-mile of a transit stop. This is an anti-sprawl measure.

It also would continue the old requirement to spend 20 percent of tax-increment funds for low- and moderate-income housing.

Further, where cities in the past could take tax increments from counties and special districts, cities now would need consent – avoiding the city vs. county fights under the old model.

For more traditional development, like the industrial port in West Sacramento, communities need other tools.

The governor also should sign Assembly Bill 2144 by Assembly Speaker John A. Pérez, D-Los Angeles. This bill would make it easier for communities to use existing infrastructure financing districts to finance public works – such as highways, transit, water systems, sewer projects, levees and flood control, child-care facilities, libraries, parks and solid waste facilities, habitat restoration and brown field restoration.

This bill would reduce voter- approval requirements for the formation of such districts and the issuance of bonds from two-thirds to 55 percent. Projects on publicly owned land or former military bases would not need voter approval.

This change would give voters a say in how local property taxes are used for economic development, a good thing. And it would be in keeping with what Brown has suggested – lowering the voter approval threshold from two-thirds to 55 percent for bonds used for economic development purposes.

SB 214 by Sen. Lois Wolk, D-Davis, and AB 2551 by Assemblyman Ben Hueso, D-San Diego, also would revise existing infrastructure financing sistricts, but they would remove voter approval altogether.

If Brown signs the measures, funds for local economic development would be less than before and would require much more cooperation between cities and counties.

The Sacramento region has successful projects, among them the Sutter Street revitalization in Folsom; the Pacific Plaza Apartments in Roseville; the mixed retail-housing Roe Building in Davis; the transit- oriented La Valentina and Mercy Housing in Sacramento. Local officials could use the powers authorized by the legislation to build on those successes.

The Legislature may need to provide more tools to local governments in the future. But SB1156 and AB2144 are a start, and the governor should sign them.

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