Los Angeles’ redevelopment agency still alive after budget deal

A funny thing has happened to L.A.’s redevelopment agency in the wake of the state’s yearly budget meltdown.

After months of serving as the ripest of targets for budget-cutting state officials, the Community Redevelopment Agency turns out not to be so dead after all.

That news became official Wednesday, when the City Council voted 13 to 0 in favor of an urgency ordinance that keeps its redevelopment agency alive and intact — by moving roughly $97 million in redevelopment funds to Los Angeles County.

Had the CRA refused to send that sum, it would probably have been forced to go out of business, under the terms of a budget deal approved nearly two months ago between Gov. Jerry Brown and the Legislature. Brown had repeatedly called for the outright elimination of redevelopment agencies.

Under a compromise, redevelopment agencies across the state can stay put if they turn over $1.7 billion to other agencies this year and more money in future years. Even with those reductions, L.A.’s redevelopment agency will have $1 billion to spend between now and 2016 on a list of projects that was hurriedly compiled to keep the money out of state hands.

Backers of the agency applauded the move, saying redevelopment had made a positive mark on the city by attracting affordable housing and parkland to low-income neighborhoods. Critics have been less favorable, saying that development interests have used the agency as an ATM, getting money that would otherwise go to schools and counties.

Before approving the ordinance, council members railed at state officials for using the money to balance the budget. “I really resent it,” said Councilman Bill Rosendahl. “What this governor and what this president has to do is bite the bullet on more taxes.”

The first payment will arrive in January at the county, which will then distribute the money to school districts, fire districts and other local agencies. In future years, the agency will be required to send at least $25 million, city officials said.

Municipalities up and down the state are still hoping that the state Supreme Court will block implementation of those cuts and then take up a lawsuit filed by the California Redevelopment Assn., a group that represents nearly 400 agencies. That group contends that the redevelopment law violates Proposition 22, which sought to keep the state from raiding certain local governments.

“We are optimistic that we will prevail,” said John Shirey, the group’s executive director.

L.A. is not the only city seeking to preserve its redevelopment activities. In a survey commissioned by the California Redevelopment Assn. last month, the vast majority of agencies were determined to stick around, Shirey said.

“The indication was that 83% of the agencies were going to do anything and everything they could to try to come up with the money,” he said.

david.zahniser@latimes.com