Although redevelopment agencies such as Hollister’s have vast
potential to generate economic growth, they also have fostered
spending on luxuries at a time when cities and the state can’t
afford them.
Although redevelopment agencies such as Hollister’s have vast potential to generate economic growth, they also have fostered spending on luxuries at a time when cities and the state can’t afford them.
Gov. Jerry Brown is on the right track in his proposal to eliminate 400 redevelopment agencies functioning in California. They allow jurisdictions to keep more property tax revenue local by committing to investing those dollars, through an RDA and within its redevelopment boundaries, toward economic development and affordable housing.
With the state facing a $25 billion deficit, and prospective savings of $1.7 billion in property tax revenue by cutting out RDAs, now is the right time to look at their value and other ways to offset their contribution toward generation of tax revenue. The reality is that RDAs – when taken full advantage of -inherently are tools for long-term investment. They do little in the short term. They act as luxuries, and responsible leaders put all luxuries on hold during such trying economic circumstances.
The necessary decision is to shelve the RDA program for a set number of years, perhaps five, and allow local and state leaders to re-examine its best and worst qualities for potentially re-tooling and re-launching it when the economy turns around.
Locally, it would have an impact and could possibly delay such projects as the renovation to the former Leatherback Industries site near downtown and development of the 400 block project as well.
There are, in fact, more pressing priorities such as putting more funding toward education, as Brown’s proposal suggests. And in tough times, families don’t cut out milk and bread in favor of big-screen TVs.
RDAs do, nonetheless, provide a tremendous value, when used appropriately. There are examples of successful uses by RDA programs throughout California – Morgan Hill has experienced a successful revitalization – to spur economies. But there are as many cases of abuse as well.
Hollister’s RDA crosses the full spectrum. The idea to refurbish the Leatherback property – for Gavilan College classrooms, the new YMCA and commercial units – stands to add jobs and generate much-needed foot traffic.
The $5 million project already under way to rebuild the downtown fire station – during a recession, mind you – will spur no economic gain. The city also in recent years has inappropriately diverted funds from the Hollister RDA toward the general fund – for instance, that $2 million transfer involving the courthouse property transaction – where it is discretionary.
Undoubtedly, the RDA program has potential to reap long-term benefits, to boost economies and add tax revenue to the state and local coffers. Now, however, is not a time to invest in a system with flaws, to take such broad discretion with a frightening and increasing scarcity of funding.
