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1972 – 50 years of service to the commercial industrial retail real estate industry – 2022.


January 14, 2011

Governor Brown’s budget also proposes to fundamentally change the role that state and local governments play in local development activities. State tax benefits for enterprise zones are eliminated and the current funding mechanism for redevelopment agencies (RDAs) is phased-out. Eliminating RDAs, to save $1.7 billion, is particularly troubling to local officials and developers alike.

Although the plan is anticipated by the Governor to return “billions in property tax revenues to schools, cities and counties and help pay for public safety, education and other services,” those familiar with RDAs believe this action may actually have an negative impact on local revenues by decreasing economic activity and eliminating jobs.

John Shirey, Executive Director for the California Redevelopment Association, reacted to the proposal with concern that the proposal was penny wise, but pound foolish. “The state and local governments have very few tools to stimulate the economy, but redevelopment is the exception,” stated Shirey in a press release. “Redevelopment is already a locally-governed service, which generated hundreds of thousands of jobs and puts people to work at a time when unemployment is soaring over 12 percent. Redevelopment contributes tens of billions of dollars to our economy and is responsible for more than $2 billion in state and local taxes each year.”

In addition to the fiscal impact of reduced economic activity, some are concerned that the elimination of RDAs will also make it more difficult for the State of California to reach goals set forth by the Global Warming Solutions Act (AB 32) and the nation’s first law linking greenhouse gas emissions to land use (SB 375), by making urban growth more difficult. Communities use redevelopment for cleaning-up brownfield sites, building infill projects, and producing affordable housing.

Although many Capitol Insiders do not think this proposal has a real chance of actually being included in the final budget, we are taking the proposal very seriously and working with a coalition of groups to make sure we educate the Governor’s office and Legislators about the absolute importance of Redevelopment.

The Governor’s proposal now goes to the Legislature where these issues will be “debated” at length. We will be educating lawmakers about the important role that RDAs play in revitalizing downtowns, creating jobs, and facilitating sustainable growth.

Click here to read the full press release from the California Redevelopment Association.

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