On hold: Court’s redevelopment decision interrupts local projects [The Bakersfield Californian]

Jan. 09--A gas station and market in Arvin. Industrial jobs in Shafter. The need to keep companies in Tehachapi.

All these, and more, are part of the goals of redevelopment projects in the small communities around Bakersfield.

And suddenly, all are on hold.

A Californian survey of projects in the county shows many endeavors halted in their tracks following a court ruling that upheld the state's shutdown of redevelopment agencies.

In Arvin, for instance, three plots of land were slated for redevelopment projects. Now negotiations to sell those properties to developers are at a standstill.

For one parcel, an ampm gas station was planned. Although just one business, it would have been significant for a city Arvin's size, said Finance Director David Powell.

"All of that is in limbo because we don't own the property now," Powell said.

On Dec. 29 the state Supreme Court upheld legislative action that effectively shutters redevelopment agencies in California. The court ruled that the legislature had a right to eliminate redevelopment agencies because it had allowed them in the first place.

The state's action had been part of desperate attempts by the Assembly, Senate and governor to fund schools and other agencies amid unprecedented budget cuts. Gov. Jerry Brown and others had argued any tax increases generated by redevelopment projects would be better spent on local services like schools and police.

Cities challenged the change but the court upheld it.

As a result, the state's 399 active redevelopment agencies will be dissolved by Feb. 1.

"We're sort of scratching our heads," about how to proceed, Powell said.

Redevelopment agencies get their funding from tax increments. The city that created the agency defines which areas will qualify, such as blighted neighborhoods with a low tax base. As redevelopment takes place, these areas get new housing or commercial development and generate more property taxes than before. These increments are based on any increase in property value in those areas over a baseline year -- usually the year the agency was created.

Under previous redevelopment law, the new tax monies would be plowed back into redevelopment. Now they will be available to schools, police and other local services.

Here's a roundup on the impact:

Shafter

In Shafter, redevelopment projects have included new sewer systems and connections for 269 homes and apartments in a low-income area. For that project, the agency used $1 million in redevelopment funds.

But Shafter has focused its redevelopment on creating industrial jobs, said City Manager John Guinn. Infrastructure improvements enticed a food processor named Performance Food Group to build a facility there. The same happened with roofing shingles maker GAF Materials Corp. And redevelopment money was used to help fertilizer company Scotts Co. rehabilitate a facility.

Now a redevelopment area in east Shafter faces uncertainty. The city is building sewer and water systems in an industrial area and was planning on using the redevelopment designation to garner federal grants for the project, Guinn said. With the redevelopment agency dissolved, the city will have to work on other ways to fund the project.

"We've used it, hopefully, to the maximum extent that we could," Guinn said of the agency he helped set up in the 1980s. "It just isn't a tool we can use anymore."

Wasco

The city's redevelopment efforts have included Beckes Street Apartments, a 60-unit affordable apartment complex currently under construction for which $1 million in redevelopment funds was used.

But two other programs are on hold, said Community Development Director Rhonda Barnhard.

One is to clean up blighted properties and prepare them for development. Another helps business owners downtown make facade improvements such as repainting and repairs. That program had been gaining momentum, Barnhard said. Nine businesses had used the facade program before it was suspended.

"A program that could've been very successful obviously we had to stop operations on," Barnhard said.

Tehachapi

Tehachapi has spent about $8.5 million in redevelopment funds to remake its downtown with improvements such as new curbs and gutters, trees, streetlights, restoration of historic buildings and the historic Tehachapi train depot, rebuilding the historic Beekay Theater and building Centennial Plaza. Other projects have included infrastructure improvements using $3.1 million in redevelopment funds for things like adding sewer service and water lines to "critical parcels" in the Tucker Corridor, a commercial area, thereby allowing shopping centers to be built. And about $950,000 in redevelopment funds was spent on project planning and miscellaneous blight elimination, such as public parks in low-income areas.

The city has accomplished most of the redevelopment projects it had set out to do when it formed the agency in 2000, which is good news, said Community Development Director David James.

But Tehachapi also had used redevelopment funds to attract businesses to relocate to the city, through marketing and incentives.

"I'm not sure how we'll fill that gap," James said.

The city is trying to make sure aircraft maker Icon Aircraft keeps its operations in Tehachapi, he said. "At some point they'll need to expand, and it's quite possible they would expand somewhere else. Redevelopment money would give us a tool to retain them here."

Delano

Like many other city officials, Delano City Manager Maribel Reyna said redevelopment is one of the few tools cities have to attract business.

Delano's redevelopment spending has gone for things like infrastructure improvements downtown and for low-income housing. About $100,000 in redevelopment funds was used for sewer and water system and road improvements in Delano'sMadison Square. Another $146,000 in redevelopment funds was used for road improvements that enticed shipping company Railex to build a facility in Delano, Reyna said. Also, the city uses redevelopment funds as low-income housing assistance for about 10 to 15 homes a year to help new homebuyers and for upgrades for older homes.

But one project is on hold -- a 12-acre property the city bought and cleared for future development.

The downtown plot was a "classic slum/blight" area, Reyna said, a spot for prostitution and other illegal activities.

"Now it's vacant and it will continue to sit vacant because the project is at a standstill," she said. "So we've lost out on that."

Arvin

The city's redevelopment projects have included an apartment complex for low- to moderate-income residents for which $1.5 million in redevelopment funds was used. The first phase of 49 units, is set to be finished in two weeks. Powell said the city hopes the developer will be able to build a second phase of 50 units without further assistance from Arvin.

A new parking lot with about 50 spaces on Arvin Avenue used $400,000 in redevelopment funds for property, landscaping and lights. The city also used $3 million in redevelopment funds to buy vacant, blighted land to resell that land to developers. Arvin also has helped finance facade improvements such as one of the post office which used $50,000 in redevelopment funds, and others at a Chevron gas station and State Farm Insurance office.

Taft

Taft used a $4.6 million bond for redevelopment funds to build a new police station. It also spent $160,000 in redevelopment funds for a 61-unit affordable housing apartment complex for senior citizens.

But the city's biggest planned project was due to start this year, said City Manager Bob Gorson.

Gorson said the mixed-use project will be "the new destination for Taft." Plans for the first phase of the project call for a 70-room hotel, three restaurants, a Dollar General store, 20,000 square feet of space for commercial and/or residential use and possibly office space and a 60-unit condominium complex, Gorson said. The project would cover 47 acres in the heart of downtown Taft on the site of an old Union Pacific railroad station, property the city bought from the railroad. The total estimated value of the project is $127 million, Gorson said.

"We're just going to continue to proceed because this has been in the planning phase for quite some time," he said. "We're just getting started."

Gorson said the city is counting on immediate legislation that will at least postpone the demise of redevelopment agencies.

What's next

State Sen. Alex Padilla (D-Pacoima) will soon introduce a bill that would postpone the dissolution of the agencies until April 15, said Jim Kennedy, interim executive director of the California Redevelopment Association. If passed, the bill would give agencies "breathing space" to revive redevelopment according to a different model, Kennedy said.

So far, CRA is "cautiously optimistic" that the bill can get the two-thirds majority it would need and pass before Feb. 1, Kennedy said.

Bakersfield went through a round of layoffs related to redevelopment last fall, said Economic Development Director Donna Kunz. Six people were let go and two more left, Kunz said. More layoffs as a result of the court decision aren't likely, she said.

No layoffs in city staff are planned in Shafter, Tehachapi or Wasco as a result of the court decision. In Taft, there could be one layoff by the end of the year, Gorson said. Arvin let go of one person whose position had been dedicated to redevelopment.

In Delano, two redevelopment employees were laid off last summer in anticipation of the court's decision, and another two positions were moved, Reyna said. Oildale's special case

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