Nixing Redevelopment Agencies Could 'Level Playing Field' for Diamond Bar

Diamond Bar officials said Gov. Brown's proposed elimination of redevelopment agencies in the state could mean a return to fair competition to bring business to the city.

While Gov. Brown's plan to eliminate local redevelopment agencies statewide fell one vote short of passing the Assembly on Wednesday night the Los Angeles Times reported that the proposal could be reconsidered as soon as Thursday.

The original proposal would have eliminated around 425 municipal redevelopment agencies in the state, which allow local governments to collect money from property taxes to improve blighted areas and spur economic growth.

In Diamond Bar, the city's redevelopment agency has been inactive since a court decision threw out its redevelopment plan in 2000, but the outcome in Sacramento could affect the city's position regionally.

City Manager Jim DeStefano said that cities with redevelopment money have since held some advantages over Diamond Bar in attracting businesses and economic development, but he said he is generally against eliminating the agencies throughout the state.

"It's hard to believe they would do away with [redevelopment agencies] because there is no economic plan in the state of California," DeStefano said. "And if the state eliminates that tool, then what tool is available to attract businesses and keep them here?"

DeStefano said that California would then be at "an enormous disadvantage" in competition with states nearby.

Locally, DeStefano said the elimination would give Diamond Bar and neighboring cities "the same exact tools" to attract and retain businesses.

Currently, Diamond Bar uses money from its general fund to pursue economic development projects or to provide incentives for businesses to come to town, Council Member Carol Herrera said.

"I still wouldn't be an advocate for cutting those redevelopment agency funds because so much good can be done for businesses with those funds," Herrera said. "You drive through cities and you see new businesses built and modernized and it looks inviting and clean and attractive."

Herrera pointed to the city's older shopping centers near Diamond Bar Boulevard and Golden Springs as areas that could benefit from redevelopment agency funds.

In the city of Walnut, redevelopment agency funds are currently being used to complete the and were also used in the construction of City Hall.

But when it comes to businesses, Herrera said, they may be looking for something redevelopment money can't provide — like the right location.

Herrera said that the city "stood on its head" to try and bring a Trader Joe's market to Diamond Bar, but the market ultimately decided to locate at the Shoppes in Chino Hills.

"So, even if we had a redevelopment agency or even if [other cities'] went away, [businesses] still make decisions where they are going to locate irrespective of the city's funds," Herrera said.

On the other hand, Mayor Steve Tye said that SIGMAnet — a computer consulting company — was lured away from Diamond Bar to the city of Ontario last year after Ontario was able to offer the business a better deal on a lease using redevelopment funds.

"When you compete against a community that has [a redevelopment agency], you are at a distinct disadvantage," Tye said.

A data project by the Los Angeles Times shows that the city of Ontario's redevelopment agency spent over $15 million on land acquisition and site preparation alone from 2001-2008.

In total, Ontario spent over $102 million in redevelopment agency dollars during that time period.

For the estimated $1.7 billion in spending statewide spending on redevelopment projects, the League of California Cities estimated that nearly 304,000 full and part-time private sector jobs are maintained, including 170,600 in construction.

The state's Legislative Analyst’s Office, however, which serves as a nonpartisan advisor to the Legislature and whose key role is to analyze the annual governor’s budget, has said that it feels the estimate of 304,000 jobs potentially lost is based on a flawed analysis.

In its analysis of Brown’s proposal, the LAO ultimately sided with the governor on eliminating the redevelopment agencies, and said that the League of California Cities "vastly overstates the economic effects of eliminating redevelopment and ignores the positive economic effects of shifting property taxes to schools and other local agencies."

The report said that the elimination of redevelopment agencies should be coupled with "offer[ing] local governments alternative tools to finance economic development."

Since Gov. Brown's announced plan to eliminate redevelopment agencies, many local governments around the state have made moves to commit redevelopment money to projects before the agencies' possible elimination.

Between Jan. 1 and March 6 of this year, according to a Los Angeles Times report, local governments have approved the issuance of nearly $700 million in bonds for redevelopment projects, which is already over half of the $1.2 billion in bonds approved for redevelopment projects during 2010.

Heidi Gallegos, executive director for the Regional Chamber of Commerce of San Gabriel Valley, said that the Chamber is currently considering the official language of its stance against the elimination of redevelopment and will vote soon to formalize an opposition to "any legislation that would eliminate or raid local redevelopment agencies."

The Sacramento Bee reported that Gov. Brown said he will "continue to work to advance the proposal."