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Budget Vote Set for Wednesday; May Determine Redevelopment's Fate

The California Assembly and Senate are expected to vote on the budget proposed by Gov. Jerry Brown. The trailer bill concerning redevelopment, AB 101, emerged from committee today. If enacted, it would codify the dissolution of redevelopment agencies and the winding down of their activities under "successor agencies" and oversight boards. Agency activities would effectively end July 1.

The bill language includes the provision that agencies cannot "pledge or encumber, for any purpose, any...revenues or assets" and cannot "Amend or modify existing agreements, obligations, or commitments with any entity, for any purpose" as of Jan. 1, 2011. These provisions mean that much of the evasive action that agencies have been taking may be for naught if successor agencies attempt to undo deals that have been made in the past ten weeks. As well, the bill language retains the provision that successor agencies would "approved development projects, which were funded by tax increment revenues of the dissolved redevelopment agency." Cities that wish to retain properties and proceed with development may purchase the properties from successor agencies form their own coffers at "fair market value."  

Earlier today the California Redevelopment Association put forth its own plan that would salvage redevelopment agencies and encourage them to make voluntary transfer payments to help ease the state's budget crisis. The fate of that proposal is unclear as of yet. 

--Josh Stephens