Thursday, December 29, 2011

High Court Delivers Huge Blow to Oakland and Other Cities

by Robert Gammon
Thu, Dec 29, 2011 at 11:01 AM

The California Supreme Court today delivered a devastating blow to Oakland and other cities that depend heavily on redevelopment dollars to revitalize downtrodden areas. The court upheld a plan hatched by Governor Jerry Brown and approved by the legislature that eliminated redevelopment agencies statewide. Cities had sued to kill that plan, but the high court rejected their arguments. The court's decision means that Oakland and cities throughout California will have to disband their redevelopment agencies completely, lay off tens of thousands of workers, and immediately transfer local property tax proceeds to the state.

The high court's decision also means that Oakland may have to eliminate a sizeable portion of its Community and Economic Development Agency, costing the city hundreds of jobs. In addition, the ruling represents a major hit to affordable housing efforts in Oakland — many of which depend on redevelopment dollars.

In an ironic twist, the high court also rejected a compromise bill that Brown and the legislature approved that would have allowed redevelopment agencies to continue — if they agreed to pay millions a year to the state for education. The court ruled that this law violated Prop 22, a voter-approved initiative that prohibits the state from raiding local government coffers. The court, however, said that the elimination of redevelopment agencies did not violate Prop 22 because the legislature created redevelopment agencies in the first place so it had the power to kill them.

The court's decision also could seriously impact Oakland's attempts to build a new ballpark for the A's and stop the team's planned move to San Jose. One of the proposed ballpark sites — Victory Court near the waterfront — requires redevelopment money to pencil out. However, the new Coliseum City plan unveiled by Mayor Jean Quan earlier this month may be able to be built without redevelopment money.

The ruling, however, is not all bad news. The elimination of redevelopment agencies means that the state will not have to slash $1.7 billion from its budget. However, the decision does not mean more money for schools right away, because the state was already counting on winning the Supreme Court case and had included the redevelopment money in this year's budget.

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