What is the government agency that other government agencies love to hate?

Redevelopment.

For the most part, an obscure and misunderstood governmental process, redevelopment agencies enable local government to revitalize deteriorated and blighted areas within their set boundaries.

But the other side of the same coin paints redevelopment agencies as tax grabbing, ineffective abuses of government power that benefit mostly the developers for whom the process is used.

Now, the governor's proposed budget calls for doing away with redevelopment agencies completely in July, and redirecting the property tax flows to the state in an effort to find sources of money to fill California's gaping budget deficit.

Just by way of a brief history, redevelopment was created in 1952 when the California Legislature passed the California Community Redevelopment Law. It authorized the distribution of "tax increment" to agencies with the goal of relieving taxpayers of the costs of redevelopment by making projects self-supporting.

In 1976, the Legislature required that redevelopment agencies set aside 20 percent of their tax increment for affordable housing purposes, known as the "20 percent housing set-aside."

So, how does redevelopment work?

Redevelopment agencies use tax increment financing to accomplish their goals. When a redevelopment agency is formed, it covers a specific area within a city or other jurisdiction (except perhaps in Pittsburg, where it covers the entire city).


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The property tax payments are fixed upon creation of the agencies, and the future increases in property taxes, or the "increment," goes to the agency.

Bonds are typically sold pledging the property tax increment as a revenue stream with which to repay the bonds. The bond money is then used for capital improvements such as building and rehabilitating streets, parks, public buildings, purchase of real property parcels and creation of housing projects.

The agencies are self-sustaining because as they help to relieve blight and create economic development, the value of the properties within the redevelopment agency boundaries increases in value -- as do the property taxes, and the increment over the original tax amounts flows to the agencies.

The downside of this process is that those increments would have gone to schools, fire districts and to the county to fund services.

Currently, there are 397 active redevelopment agencies in California, most of which are city redevelopment agencies, but counties also have redevelopment agencies. Contra Costa County has a very active and successful redevelopment agency.

One only need look at the development around the Pleasant Hill BART station as an example of the county's redevelopment success. Pleasant Hill BART is in the unincorporated area and not within the city of Pleasant Hill.

The cities of Walnut Creek, Lafayette, Concord and Pleasant Hill all have active agencies which have been used to assemble parcels of land, create strategic plans for development and fund improvements which benefit everyone in those cities.

Martinez has toyed with the thought of creating an agency, but the issue has become a kind of electric third rail, pitting "old-time Martinez" against the newer Martinez south of Highway 4.

Walnut Creek can point to the development of its downtown, and Concord has used redevelopment to completely revitalize the area around Todos Santos Plaza and to assist in the creation of the Bank of America Technology Center.

Pleasant Hill used its redevelopment agency to actually create a downtown where none existed before, and to build a new city hall.

According to the Pleasant Hill website, "Redevelopment is the most successful public/private partnership program for economic development and community improvement in the history of California.

"It encourages private sector investment in areas that would otherwise be passed over due to high costs to assemble property, correct infrastructure deficiencies, and provide affordable housing."

Why then is Gov. Brown so down on redevelopment, especially considering that he currently lives in a loft in Sacramento that was funded in part by a redevelopment agency?

"I like redevelopment," Brown said, according to the L.A. Times. "I didn't quite understand it, seemed kind of magical. (While I was mayor of Oakland), I put a lot into the Fox Theater, got this beautiful theater. Tens of millions of dollars "... I'm sure glad I got it built before this damn budget came out."

He seems a bit disingenuous.

According to Brown, California can no longer afford the redevelopment process. But considering the economic development advantages that redevelopment brings to local government -- such as jobs, infrastructure improvements, affordable housing and increases in sales tax revenue which flow into local coffers to fund services -- how will cities improve and flourish in the future?

Ron Mullin is a Concord resident, and former mayor and member of the Concord City Council. Contact him at columns@bayareanewsgroup.com.