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Cities Discover Relative Merits of Staying Out of RDA Game

While most of California's cities undergo the arduous wind-down of their redevelopment agencies, a handful of cities have been going about business as usual. For most of the cities that never had redevelopment agencies, business has been, and probably will continue to be, good. Redevelopment took root in economically disadvantaged places, so the likes of Beverly Hills, Rolling Hills Estates, and Sausalito are carrying on contentedly.

Add to that rarified group the East Bay of Benicia and the south Los Angeles County city of Gardena. They are among the few cities in California that, by most accounts, should have had redevelopment agencies and yet did not. Though the demise of redevelopment has not necessarily been a blessing in disguise, those cities have nonetheless escaped the trauma that their peers are suffering. 

"All the other cities in Solano County have redevelopment agencies, and it's extremely difficult dealing with it," said Benicia City Manager Brad Kilger, a former redevelopment manager who also serves on a League of California Cities post-redevelopment task force. "There are dozens and dozens of issues that need to be worked out on how you unwind these things."

Though both Gardena and Benicia face economic challenges – Benicia has an outdated industrial park and Gardena's median annual household income of $45,599 is well less than that of the state as a whole – Kilger said that the benefits of his city's current situation are twofold. The city does not have to contend with what Kilger described as the administrative and logistical "debacle" that is the dissolution process. Moreover, the city will not have to part with full-time staff members whose salaries may have been funded by redevelopment, as they were in many other cities. 

"Since we didn't have an RDA….our city wasn't heavily invested in personnel or other costs…..associated with RDAs, so we weren't really impacted by the changes recently," said Ward Madrono, Gardena's police chief and assistant community development director. "We are thankful that we have no liability because of the recent decisions."

In that respect, the loss of redevelopment is yet another blow that has followed years' worth of fiscal constraints brought on by the recession. 

"Given the turmoil that's created inside organizations who have been over the last 3-4 years dealing with downsizing…(dissolution) is like the last straw," said Kilger. "From that standpoint we do not have to contend with that and I see that as a major plus for us."

Cities that have lost their redevelopment agencies are currently caught in a maelstrom of uncertainty as the Department of Finance deliberates on the validity of their Recognized Obligation Payment Schedules. 

"We are thankful that we have no liability because of the recent decisions," said Madrono.

Cities without redevelopment agencies might not be in strong shape, but their fate may be more predictable.  

"We feel that we've probably hit bottom and, barring another major turnaround recession, that we'll be able to continue to deal with the need for cost reactions and such," said Kilger. "The cities with (former) redevelopment agencies…they don't know where the bottom is."

The two cities missed out on the redevelopment trend -- which gained momentum in California following the 1978 passage of Proposition 13 -- for different reasons. 

For decades, Benicia had funded development activities from its general fund surplus, created in part by the success of a mid-20th century era Benicia Industrial Park. But, with the industrial park in decline, Kilger said that, upon arrival in Benicia, he felt the city was ready to explore other options. 

"When I came on board about a year ago, the infrastructure in the industrial park had deteriorated over the last 30-some years," said Kilger. "Before redevelopment had met its demise, I was thinking this is a prime community for redevelopment!"

Madrono said that the city had not necessarily suffered for lack of redevelopment, except for having trouble assembling parcels. 

"We're a built-out city for the most part," said Madrono. "Without having the funding of an RDA to do that ourselves we've been limited in our ability to do large-scale developments." 

Gardena's failure to form a redevelopment agency was not for lack of trying. Rather, Gardena residents raised the common--if not necessarily substantiated--complaint that redevelopment would lead to rampant use of eminent domain. Redevelopment foes called for a voter referendum on redevelopment and won. 

Madrono said that, had the issue come up again more recently, the vote might have yielded a different result. 

"There was a lot of misinformation about it and maybe some lack of trust at the time," said Madrono. "If it was on the ballot now, there might be more trust in government…to move that forward." 

As cities are now trying to devise their own home-grown economic development initiatives, Benicia and Gardena do not necessarily offer much by way of models. Benicia, with fewer than 30,000 people, thrived in large part because of the industrial park. Meanwhile, Gardena employed a range of administrative reforms in order to facilitate the development process. 

"We've tried to develop a one-stop approach to economic development….identifying potential businesses that want to come here, through our hand-holding and pre-meetings," said Madrono. He added that the city has also tried to streamline the code-enforcement process. 

Those practices, said Madrono, helped make Gardena a finalist for the honor of "Most Business-Friendly City" by the Los Angeles Economic Development Corp. last year.