Funds for schools or jobs downtown?

Governor's budget cuts threaten city's plan for new grocery store

This corrects an earlier version of the story: The City Council will discuss, but not vote on, the downtown RDA issue at its Tuesday, Jan. 18, meeting.

Some City Council members would like to subsidize a grocery store downtown, but Gov. Jerry Brown's budget, announced Monday, might pose a problem for that.

Brown's proposal to tackle the state's $25 billion shortfall with budget cuts and tax increases includes the elimination of redevelopment agencies across the state. Brown wants to permanently shift the taxes that flow to the city's redevelopment funds to schools and other local services, but Mountain View City Council members may object to that in their meeting next week.

The council happens to be discussing on Tuesday whether to extend the downtown redevelopment agency (RDA), which is one of the oldest in the state -- it's set to expire after 40 years this June. Last year the council discussed extending the downtown RDA for two years to subsidize a long-desired grocery store on a city-owned lot at California and Bryant streets.

Mayor Jac Siegel said that extending the downtown RDA would help create jobs downtown through its funding of future projects, including the "neighborhood serving" grocery store downtown.

But with funding for basic state and city services scant these days, Brown proposes to get rid of redevelopment agencies altogether. The agencies, for the purposes of economic development, have shifted property taxes away from school, city and county services for decades.

If Brown's proposal is approved by the legislature Mountain View would lose the downtown RDA, its only redevelopment agency and one that has funded improvements since 1969. By concentrating property taxes on parking, sidewalks and lights, it helped increase downtown property from a total assessed value of $22 million in 1969 to $418 million last year.

Had the downtown RDA gone away entirely last year, there would have been another $700,000 in property tax revenue for core city services such as police and the library, while the city's elementary and middle schools would have received another $832,000 in property tax revenue.

Siegel said the council needs to consider whether extending the RDAs life makes sense for the community. "What else do we need to do or what should we do before this is totally gone," he said.

The downtown wouldn't be left completely high and dry by Brown, however. He proposes an amendment to the state constitution that would allow the city to continue funding economic redevelopment and infrastructure projects through more easily attainable voter-approved bonds. Those bonds would only require a 55-percent approval from voters instead of the two-thirds vote now required.

City officials say that would mean a time consuming extra step in economic redevelopment projects when it's often the case that "time is of the essence," said economic development director Ellis Berns. But it could also mean a new funding source for projects in other areas of the city.

Brown's plan would eliminate RDAs in June, but cities would continue to receive funds to pay off RDA debts. If all of the RDA money went to paying off the downtown's debts if would take about eight years to clear, city officials say.

City officials remind everyone that the improvements made possible by the downtown district has raised the entire city's property values, and hence, property tax revenue for schools.

But in his budget proposal, Brown told cities that "RDAs were not intended to become a permanent source of business subsidies" and that their original intent was to "relieve blight" in a "limited amount of time."

If the council decides not to extend the downtown RDA, the city's core services, schools and the county could begin receiving additional property taxes in 2019, when bond payments finish, city officials said last year.

But that may be delayed under Brown's proposal. Brown proposes to use the funds "freed up" from RDAs in 2011-12 to fund the state's general fund services, including schools and MediCal.

Since last year the council has been considering an extension of the downtown RDA for up to two years. That extension is currently allowed by the state because it borrowed nearly $2 million from the downtown RDA this year and last year, said finance director Patty Kong.

Other than the impact on the downtown RDA, city officials said their preliminary analysis of the governor's proposals has yet to find any other significant impacts on the city. While there has been lots of talk about shifting funds and responsibilities to local governments, that appears to mostly have to do health and human services, which the county would take on, Kong said.

While the downtown RDA would go away under Brown's proposal, it is unclear whether it would end another special tax district, a much more lucrative one of the city.

Shoreline tax district untouched?

"The governor has a tough nut to crack," said Vice Mayor Mike Kasperzak. "Everybody is going to have a sacred cow."

If Mountain View has a sacred cow it's the Shoreline Community Fund, which functions like an RDA to pay for Shoreline Park maintenance and improvements to the surrounding area, now home to Google. It was created by special state legislation with no sunset clause, meaning it could exist forever. Whether Brown would do away with the Shoreline Community is uncertain, but so far city officials are pointing out that his budget proposal specifically mentions RDAs, which would exclude the Shoreline Community.

However, last year the state took $1.7 million from the Shoreline Community, along with raiding the state's RDAs, to help meet its obligation to schools. Finance director Patty Kong said the Shoreline District was addressed by the state as a unique authority, not an RDA.

Elementary school officials have been eyeing the Shoreline Community, which pulls in $5 million in taxes that would otherwise go to the city's local elementary and middle schools annually. City officials have defended the Shoreline Community however, saying that has created a neighborhood that is now the city's "economic engine." It has funded the Stevens Creek and Permanente Creek trails, the creation and maintenance of Shoreline Park and a new fire station on Shoreline Boulevard to be constructed this year, among other things.

But it appears that the new governor has a different view.

"The expansion of redevelopment agencies has gradually shifted property tax away from schools, counties, special districts, and city general purposes," Gov. Brown's budget proposal states, adding that "the state's investment in local economic development and redevelopment agencies is less critical than other activities."


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Posted by localmom
a resident of Cuesta Park
on Jan 12, 2011 at 10:00 pm

Wow I had no idea $5 million/year was diverted to the Shoreline "special tax district" from the schools! Get rid of that boondoggle ASAP! As if Google needs our kids' school lunch money! Outrageous.

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Posted by Ned
a resident of Old Mountain View
on Jan 13, 2011 at 7:10 am


Actually, it's the city that needs the money to pay for the generous retirement packages for those very same city administrators who help engineer it. Let's not blame Google for everything. That's the kind of distraction they're hoping for.

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Posted by localmom
a resident of Cuesta Park
on Jan 13, 2011 at 7:13 am

Good point Ned! I'm certainly not blaming Google for supping at the trough, it is the Council which fills the trough! I assume it's for kudos from the Big Corps who run the Valley, as little elementary school kids don't vote...

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Posted by Old Ben
a resident of Shoreline West
on Jan 13, 2011 at 9:08 am

Putting a grocery store downtown is one of the stupidest ideas I've ever heard. It's a surefire path to total gridlock.

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Posted by Mike Laursen
a resident of Monta Loma
on Jan 13, 2011 at 12:41 pm

There already IS a grocery store downtown. It's unfair to them to subsidize a competitor.

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Posted by Mike Laursen
a resident of Monta Loma
on Jan 13, 2011 at 12:44 pm

Please, let's get rid of all the redevelopment agencies. They have always done more harm than good.

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Posted by phm
a resident of The Crossings
on Jan 13, 2011 at 2:57 pm

MVV, thanks for this article that makes the issue of redevelopment agencies clearer. I think Jerry Brown learned from his years as Oakland mayor. As high-density housing is built near downtown, maybe a supermarket will be motivated to locate there without government subsidies.

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Posted by OMV resident
a resident of Old Mountain View
on Jan 13, 2011 at 2:59 pm

@Mike Laursen's comment that redevelopment agencies "have always done more harm than good" -- I suppose Mountain View's downtown RDA, which helped transform Castro Street from a dying strip to an attractive community asset, did more harm than good? And I suppose the increase in the assessed value of downtown property from $22 million in 1969 to $418 million last year should just be dismissed? Even though the tax revenue in the immediate downtown area has been kept in the RDA for use downtown, the transformation of Castro Street has certainly helped the property values of adjacent neighborhoods, which are not in the redevelopment district. That extra tax revenue helps our schools and city services.

@Old Ben - What evidence do you have that a new grocery store downtown would lead to "total gridlock"? This is the same kind of "the sky is falling" logic that people surely tossed around when the city decided to change Castro Street from 4 lanes to 2 lanes in the late 1980s... And look what we have now - a more attractive street that functions better for everyone, not just cars trying to zip through downtown as fast as possible.

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Posted by PaulC
a resident of Cuesta Park
on Jan 13, 2011 at 3:01 pm

Mike Laursen beat me to this comment. Mountain View downtown has had an Asian market for years. This isn't the first time I've heard the clearly false claim that there is "no" downtown grocery store, including a councilperson quoted in the Mountain View voice months back.

Opinions can differ on the merits of Mountain View Market. I don't think it's all that great, but it certainly serves the purpose of a grocery store. You could buy all your food there and maintain a healthy, balanced diet. You could do it without even eating primarily Asian cuisine. To carry on a discussion about a "grocery store" without at least explaining first why Mountain View Market doesn't count is almost inexplicable. Is it cultural bias? That's hard to believe given local demographics. Maybe some of our council members have never ventured down Castro street on foot? I almost find that explanation more likely.

FWIW, I have no disagreement in principle with redevelopment aimed at putting supermarkets in under-served neighborhoods, but I don't see any reason for it in downtown Mountain View, and there are definitely much higher priorities.

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Posted by PaulC
a resident of Cuesta Park
on Jan 13, 2011 at 3:36 pm

I think the gridlock prediction is unlikely because any store capable of causing gridlock would not need to be subsidized in the first place. Supermarkets can fail by the way. The Albertsons/Lucky in San Antonio shopping center was eventually closed, though it struck me as more modern and better stocked than the nearby Safeway.

To add to my above comments, there is also a Safeway at Bailey Park shopping center, less than a mile away from Castro Street. Caltrain and Central Expressway make the walk more difficult, but this would not be a bad place for a pedestrian overpass (I'm not an urban planner so maybe I'm wrong). Any new downtown supermarket would most likely be taking customers from other stores. Maybe there is some particular store some councilperson wants. I doubt a Whole Foods or Trader Joe's would work out very well, since there are already some a short drive away.

The main thing is that Mountain View downtown is not under-served. I've lived in urban areas that really could use a grocery store or a cleaner, better one, but we're not talking about buying Cheetos and malt liquor at the corner bodega here. You could live in downtown Mountain View without a car and prepare a variety of healthy dinners on a daily basis. There are more exciting places to live but I honestly think it is already about as successful a downtown as one could reasonably hope given the size of the city.

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Posted by eric
a resident of another community
on Jan 13, 2011 at 4:08 pm

Every time the Special Tax District is discussed, the same misconception pops up. Google and other Shoreline businesses do NOT benefit. The real estate developers that own their buildings do NOT benefit. They pay the same property taxes that they would across the freeway. The tax district is a massive boondoggle that buys golf carts and makes sure that there is never a dead flower for 20 seconds on any median strip around Shoreline. Ever seen a pothole near the golf course?

The tax district has to go. Schools, not golf carts!

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Posted by eric
a resident of another community
on Jan 13, 2011 at 4:14 pm

On the subject of the grocery store- I assume that any council person who lives in downtown will recuse themselves, right?

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Posted by Voting for Schools
a resident of St. Francis Acres
on Jan 13, 2011 at 6:55 pm

@OMV resident "the transformation of Castro Street has certainly helped the property values of adjacent neighborhoods,"

Just compare property values in Mountain View between the LASD and the MVWD districts, better schools would likely do even more for these property values.

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Posted by Ned
a resident of Old Mountain View
on Jan 13, 2011 at 7:44 pm

Right on target. Better schools equal higher property values.

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Posted by vfree
a resident of Waverly Park
on Jan 14, 2011 at 2:39 pm

The last thing we need is more money for schools that can't teach kids anything. Public schools are nothing more than a retirement boondogle for the staff. Any additional funds for schools needs to be matched by reductions in pension plan benefits.

With respects to the grocery store downtown; if a store had any chance of turning a profit downtown, it would not need tax payers money to fund it.

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Posted by garrett
a resident of another community
on Jan 16, 2011 at 12:23 pm

I have been reading about doing away with the RDA's, why can't some of the money be set aside to the schools. It seems the issue is not the RDA's it is cut cut cut and no one wants taxes inreased, pensions can be reformed, but the problem schools, state, counties and cities are not like the private sector, they can't rasie prices or they can just lay off people and relocate overseas. One day maybe 911 dispatch will be in India, Fire and Police will be temp workers, merge Los Altos, Palo Alto, Mountain View and make one big city, no penions or no medical or plans. We are want our services but do we want to pay for them.

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Posted by MV
a resident of Shoreline West
on Jan 17, 2011 at 12:41 pm

Looks like the council is causing more harm than good to the city of mountain view. It wants to build 100s of apartments and stores. While closing the schools and not taking any action as they get worse every year.

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Posted by connie
a resident of Old Mountain View
on Jan 19, 2011 at 3:19 pm

Don't be fooled. Yes, the public sector is doing better than the private sector and that's totally backwards. But the answer is not to attack the public sector. They make peanuts compared to the billions that corporations are legally, but unfairly taking away from American citizens. They don't even pay their share of property taxes in California thanks to prop 13. We give corporations tax shelters and they use that support to create jobs in other countries. When our country was at its greatest, the richest Americans were taxed at 60-90% and that money went to public schools and infrastructure. It was understood that the Americans who benefited the most from American infrastructure should contribute back the most to the American people. What happened to that virtuous cycle? The irony is that the rest of the world watched us and learned how to invest in schools and infrastructure for their people. And then there's us. BTW, my daughter goes to our local public school where every kid in kindergarten is doing book reports. Simply amazing, so I still have hope.

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Posted by Mike Laursen
a resident of Monta Loma
on Jan 31, 2011 at 12:25 pm

OMV, you're assuming that none of the enrichment/gentrification of downtown could have happened without a redevelopment agency. Seems like a lot of it would have happened anyway, purely as a side effect of our city becoming a major center of high-tech.

Posted by Name hidden
a resident of Blossom Valley

on Sep 24, 2017 at 2:02 am

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