California cities race to shield funds from state

A revolt by city officials against Gov. Jerry Brown’s proposal to abolish municipal redevelopment agencies is rapidly spreading across the state.

Over the last several days, officials in Long Beach, Pasadena, Palm Springs and numerous other cities have hastily called special meetings to discuss transferring billions of dollars from their redevelopment agencies to city control to keep the money out of the state’s reach.

The move is an attempted end-run around Brown’s proposal to scrap redevelopment and allow school districts, counties and the state to take the billions in property tax dollars the agencies now collect to improve blighted areas. Brown predicted that the move would save the state $1.7 billion in the next fiscal year and send much more money back to school districts and counties in years to come. The redevelopment agencies take in about $5 billion each year.

To block the governor, some cities have launched a mad dash to lock up future revenue — in effect laying claim to the money Brown wants. They are quickly approving deals with their redevelopment agencies to move forward with a long list of projects, even those described in the vaguest of terms.

Los Angeles was one of the first to move. Its redevelopment commissioners voted Friday to hand control of nearly $1 billion, for more than 275 projects, to the city. The projects range from building affordable housing in rundown neighborhoods to putting $35 million toward the planned Eli Broad art museum downtown and contributing nearly half a million dollars to a bicycle facility.

The vote must still be approved by the City Council — and there were signs that Los Angeles officials might be pulling back from the brink, perhaps to seek a deal with the Legislature, which has not yet taken up Brown’s budget proposal. On Tuesday morning, the council abruptly postponed a vote on the matter.

Other cities pushed forward.

On Saturday, Culver City officials voted to transfer to the city about $300 million for a long list of projects. Citrus Heights, in the Sacramento area, and Santa Monica held special meetings to protect money for redevelopment projects Monday night — even though their City Halls were closed for Martin Luther King Day. Pasadena officials met at 7:30 a.m. Tuesday.

The governor’s office issued a disapproving statement, saying in part: “These scarce dollars, which could be used to protect police, firefighters and teachers, should not be banked away for special projects.”

Added Carroll Wills, a spokesman for the California Professional Firefighters: “We think it’s unconscionable.... We are seeing fire stations closing, police officers laid off, school class sizes going up, and essentially what these local governments are doing is saying we want to get ours now and we’ll leave the real fiscal problems to everyone else.”

But many city officials were unapologetic. They said that the governor was taking their scarce dollars and that redevelopment was a vital tool for creating jobs, promoting economic development and building housing and libraries.

Though little understood by the public, the state’s nearly 400 active redevelopment agencies are allowed to collect property taxes that would otherwise go to schools and counties. Often, the agencies partner on projects with private developers, providing subsidies or donating land. The agencies mostly are run by city council members, and thus are a considerable source of power for them.

Supporters praise redevelopment agencies for reviving downtrodden neighborhoods across the state, pointing to successful projects such as Old Pasadena, San Diego’s Gaslamp Quarter and downtown Oakland. But many agencies have been criticized for mismanagement, corruption and misplaced priorities.

As the state’s financial straits have worsened, redevelopment dollars have come to look increasingly attractive to California leaders. Former Gov. Arnold Schwarzenegger grabbed $2 billion over the last two years to balance budgets.

City officials thought they had put a stop to state raids of redevelopment agencies with the passage of Proposition 22 in November, which protected redevelopment funds, said Murray Kane, a lawyer who advises several cities that have taken action in the last few days.

No one, apparently, foresaw that Brown would propose killing them altogether.

“Proposition 22 said we can’t rob redevelopment agencies anymore, but now the state is saying it is OK to rob them if we kill them first,” Kane said. “They actually think murder is a loophole for larceny.”

Though Brown’s proposal would close the agencies, it would allow them to pay off their bond debts and honor existing agreements.

Cities in effect are taking him up on that — by solidifying agreements that tie up the money.

In some cities the projects were clearly defined and were even underway. The vote was just “getting all our ducks in order,” said Santa Monica Mayor Richard Bloom. The list that was approved included a library, a park and affordable housing.

Other cities were moving forward on plans that were far less concrete.

Some of Los Angeles’ projects were ill-defined or far off. Among them were a $5-million endeavor to “attract new retail to vacant space along Pacific Avenue” in San Pedro and a $20-million effort to turn the old Sears building in Boyle Heights into housing — something the city has been struggling to interest developers in for years.

In Long Beach, which was poised to take action Tuesday night, officials drafted an agreement including $1.2 billion in projects. More than $800 million was for “public improvements and neighborhood revitalization,” including what a city statement called “future potential projects.”

Long Beach officials issued a statement saying the move was necessary because its agency has “long-standing commitments to its community partners.”

“These commitments must be protected,” it said, “before the state takes these dollars for their own uses.”

State officials, grappling with a $25.4-billion deficit, remained dubious and questioned the priorities of city leaders.

“How do you justify maintaining a system that takes billions of dollars from schools, law enforcement and other vital services and uses that money to subsidize developers?” Tom Dresslar, a spokesman for state Treasurer Bill Lockyer, asked.

jessica.garrison@latimes.com

Times staff writer Kim Christensen contributed to this report.