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California Redevelopment

December 29, 2011 by staff 

California RedevelopmentCalifornia Redevelopment, California does have the right to dissolve its redevelopment agencies, the California Supreme Court California Supreme Court. Sacramento sues Del Paso Heights project developer Follow this company ruled Thursday in San Francisco.

The lawsuit brought by California’s redevelopment agencies challenged the constitutionality of the state’s plan to eliminate redevelopment agencies. The court also ruled a against a law that would have allowed redevelopment to continue if the agencies handed the state $1.7 million this fiscal year and $400 million in each of subsequent years.

The battle for redevelopment money has gone on for several years as California has been struggling to close wide budget gaps.

The court said Thursday the state had the authority to create redevelopment agencies, and it therefore had the right to dissolve them.

Gov. Jerry Brown said in a statement that the ruling “validates a key component of the state budget and guarantees more than a billion dollars of ongoing funding for schools and public safety.”

Redevelopment agencies were first authorized in California law in 1945 and they have provided money for the redevelopment of blighted areas by creating a tax increment pass-through, which allows redevelopment agencies to capture increases in property value. Redevelopment has had many successes, including the Gaslap Quarter in San Diego, Eureka’s Old Town and many developments in downtown Sacramento, Vernon Street in Roseville and the historic districts in Folsom and Woodland.

But the agencies also have had detractors that argue that the agencies have taken a growing share of tax revenue and that some of the projects funded by redevelopment go to insider developers for questionable projects.

“Today’s ruling is a victory for California taxpayers and private property rights,” Marko Mlikotin, president of the California Alliance to Protect Private Property Rights, said in a statement. “For far too long, California taxpayers have financed obscure government agencies that use taxpayer dollars and their power of eminent domain to benefit politically connected developers. During these tough economic times, developers should not be on the public dole while police officers and teachers are getting pink slips.”

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