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Calif. redevelopment funding coming to an end

January 31, 2012 12:00:00 AM PST
Hundreds of economic development projects statewide will stop in their tracks when 400 redevelopment agencies shut down Feb. 1.

Local governments are upset a tool that's brought revitalization and jobs to California's blighted areas is vanishing.

"The needs for in-fill and transit-oriented development, affordable housing, infrastructure, jobs is as acute today as it has ever been," said Jim Kennedy of the California Redevelopment Association.

The shutdown of redevelopment agencies is part of Gov. Jerry Brown's plan to save the state money.

Critics say redevelopment has become a subsidy for developers at taxpayers' expense. Building malls, sports stadiums and arenas, instead of funding for schools, roads and other vital needs.

"The $6 billion a year which they were siphoning away, especially from the school districts, is no longer sustainable," said Assemblyman Chris Norby (R-Fullerton). "The state's broke and we can no longer afford this kind of expensive corporate welfare that redevelopment has become."

For public schools, the move means they'll receive $1 billion more a year.

The Brown administration says cities and counties can still count on more than $500 million that can make up for a portion of lost redevelopment money.

"That's general purpose revenue above and beyond what they were already getting with no strings attached," said H.D. Palmer of the California Finance Deparment. "If they want to use some of that for economic development, they're free to do so."

When the doors to redevelopment close, thousands of government jobs will also disappear.

The Senate just approved a measure that would allow communities to spend about $1.5 billion they have left in affordable housing funds. It's unclear whether the assembly and governor will sign off on it.