State court says yes to RDA shutdown

Court also strikes bill that let agencies pay state to stay open

Californians bid farewell not only to 2011 this week, but also to the state's redevelopment agencies (RDA). The California Supreme Court upheld a bill that shut down the nearly 400 RDAs scattered around the state in a ruling issued on Dec. 29.

Redevelopment agencies were formed to fight blight, but Gov. Jerry Brown pushed for their elimination, arguing that diverting $5 billion in property tax revenue to RDAs left the state short on money needed for schools. In Mountain View, the city's RDA is largely credited with revitalizing downtown.

According to the court, since the legislature had the authority to create redevelopment agencies, it also had the power to dissolve them.

"Today's ruling by the California Supreme Court validates a key component of the state budget and guarantees more than a billion dollars of ongoing funding for schools and public safety," Gov. Brown said in a statement released Thursday.

However, the court ruling wasn't a total victory for the governor. The agencies were eliminated by AB-26, but another bill, AB-27 – dubbed "extinction or extortion" by staff -- let agencies stay open by making hefty annual payments to the state. The League of California Cities and the California Redevelopment Association filed a lawsuit challenging the constitutionality of both bills.

The California Supreme Court ruling declared AB-27 unconstitutional based on the passage of Proposition 22 in November 2010, which made it illegal for the state to take money from local funds such as redevelopment revenue.

Losing its downtown RDA will cost Mountain View about $5 million in redevelopment funds, according to city officials. Paying what city officials dubbed a "ransom" to keep the agency open would have been expensive -- estimated at $2 million.

The downtown revitalization district was created in 1969 to help revitalize what was then a nearly vacant downtown. One of the oldest such districts in the state, it had been set to expire in April 2011, but City Council members approved a two-year extension in January in order to spend the authority's $5.5 million balance and "wind down in an orderly fashion," said then-City Manager Kevin Duggan.

Daniel DeBolt contributed to this story

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3 people like this
Posted by gcoladon
a resident of North Whisman
on Dec 30, 2011 at 3:17 pm

gcoladon is a registered user.

I wonder what this ruling augurs for the future of the MV Shoreline Regional Parks Community. Anyone have a guess?

3 people like this
Posted by Know-It-All
a resident of Old Mountain View
on Dec 30, 2011 at 9:05 pm

The administrative procedures and aspects of local government need to be evaluated prior to the issuance of bonds, because basically the court said that redevelopment agencies can’t issue bonds.

3 people like this
Posted by Garrett
a resident of another community
on Dec 31, 2011 at 6:23 pm

It you walk down Castro Street most of these was done with RDA money which i am sure if you own a Mall or a large shopping center you can can investors or capital. If it comes to property tax just think how much the single family home and other property outside the RDA zone has increased. There shoulb be oversight and rules to stop misuse of money, Castro St doesn't look like a misuse of funds.

3 people like this
Posted by gcoladon
a resident of North Whisman
on Jan 4, 2012 at 2:22 pm

gcoladon is a registered user.


I totally agree with you, I think Castro St (built with RDA capital) is awesome. I also think the Shoreline area is a vast improvement over what was there before, and it was also built with RDA-like money.

Now that both Castro St and Shoreline are built, though, it is worth asking if it's time to wind those projects down. For every thing there is a season.

3 people like this
Posted by Steven Nelson
a resident of Cuesta Park
on Jan 4, 2012 at 10:10 pm

Castro Street district (Revitalization) was formed over 40 years ago. The City would not let go of diverted property tax funds. In the current tax year the County Tax Rate table H-3 shows $1,757,268 was diverted from public education (elementary, high school, community college, co. board).
RDA capital = school and county tax diversions.
The County of Santa Clara was one of the contenders in the court battle, over $90 million is lost to the county every year from RDAs.
Shoreline RDA = North Bayshore diverts 99% of education property taxes (about 1/3 is being temporarily restored)
None of this in MV was a misuse of funds - but to continue is IMO a "mis-priority of taxes".

3 people like this
Posted by Seer Clearly
a resident of Blossom Valley
on Jan 4, 2012 at 10:34 pm

Castro Street is not done. There are still too many junky mini-malls and shuttered businesses (like "Food Street") that blight the street. There is also the opportunity to completely remove cars from Castro Street which would make Mountain View one of the first cities in the bay area to really emphasize community and personal connections

3 people like this
Posted by Hardin
a resident of Cuesta Park
on Jan 5, 2012 at 8:51 am

I agree with Garrett on this. In fact, if we have a system that has been proven to be both responsible and effective in utilizing funds to improve areas like the Castro Street district and the Shoreline area, we should continue to support this model. After all, how often is it that we have effective governmental operations?

Seeing the vast improvements made to the Castro Street district and Shoreline areas, a case should be made to now concentrate on other areas of the City, by redirecting some of those funds.

Note, I advocate only diverting some of the funds, as both the Castro street district and Shoreline area should continue to receive focused support to maintain and improve their areas. They play an enormous role in the economic and quality of life in Mountain View, but developing other strategic areas will provide opportunities for these special districts to work synergistically in making Mountain View prosperous and a desirable place to live and work.

3 people like this
Posted by Garrett
a resident of another community
on Jan 5, 2012 at 9:22 am

I remember that plan to close Castro Street to cars, this plan was not well liked, the idea to increase the size of the sidewalk won out. The only parts that made sense to close was the 200 and 300 blocks, this would have set traffic onto the side streets which wasn't well liked either. The street was wide so lots of room to play which is why we got the present plan.

As for strip mall, mini malls some of this was built in another time, Castro Street at one time was the main center of Mtn View, offices and sevices needed the space.

Hope we can the RDA's back, just like everything that is built is needs to be maintained just like mall owners, the need for upgrapes and ongoing improvements. If they do came back how about a rule that after so many years money has to be set aside for schools.

3 people like this
Posted by Garrett
a resident of another community
on Jan 5, 2012 at 9:28 am

Also a side note, due to that fact that the downtown area was greatly improved, and looks alot better. Just think of the the homes that were fixed up, the new buildings that were built outside the RDA, downtown was a big selling point. How much of the property tax, sales tax and business fees were collected over the years, how mnay new people and businesses opened their wallets to the schools

3 people like this
Posted by RDA is good, BUT very wastefull
a resident of Monta Loma
on Jan 5, 2012 at 6:49 pm

Like most government projects, there is no accountability to where all the money goes. Waste waste and more waste. Here are some arguments why it's a failure. And by the way, compared with 1980's, Castro looks like it just has a fresh new coat of paint. Reminds me of The Emperor's New Clothes. All the money was stolen from our schools. If we are going to waste money, might as well waste it on the schools.

“For a government activity which consumes more than $5.5 billion of public resources annually, we should be troubled that there are no objective performance measures demonstrating that taxpayer’s are receiving optimal return for each invested dollar,” said Chiang in a statement. “Locally-controlled economic development is vital to California’s long-term prosperity. However, the existing approach – born in the 1940’s – is not how anyone concerned with performance, efficiency, and accountability would draw it up today.”

“The lack of accountability and transparency is a breeding ground for waste, abuse, and impropriety,” said Chiang in a statement. “In whatever form local redevelopment takes in the future, the level of oversight and openness must be consistent with the amount of public dollars entrusted to their care.”

3 people like this
Posted by Hardin
a resident of Cuesta Park
on Jan 6, 2012 at 11:05 pm

"And by the way, compared with 1980's, Castro looks like it just has a fresh new coat of paint. "


You're kidding right?

And quoting a politician like Chiang, who is responsible for a state budget that is arguably one of the worst in the nation doesn't really help his credibility, or yours.

Chiang should take some of his own advice and medicine when he speaks about using metrics to control costs and provide accountability. I see none of this happening at the State level, which is in much worse shape than Mountain View by far.

Sorry, but further commenting on this topic has been closed.

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