Solana Beach steps up in response to state’s dissolution of redevelopment agencies


By Claire Harlin

The Solana Beach City Council voted on Jan. 11 to become the successor agency to the city’s Redevelopment Agency (RDA), which will dissolve on Feb. 1 following the California Supreme Court’s Dec. 29 ruling that the Alternative Redevelopment Program Act is unconstitutional.

Some 400 similar redevelopment agencies statewide, created in the 1940s, will disband under the decision, meant to supply about $1.7 billion collectively to the state’s $26 billion deficit.

“Revitalizing the Cedros Avenue train station in Solana Beach with a mixed-use shopping and residential center is most threatened by the state Supreme Court’s decision to eliminate redevelopment agencies,” said City Manager David Ott in a statement following the high court ruling. He estimated that the city would lose out on $3.7 million in redevelopment funds that would have helped pay for a $25 million transportation hub development, an effort that was previously on the table in 2008. The city and North County Transit District failed at that time to make the then-$72 million project happen, and have been working to propose a new development since.

As the RDA successor, the city will control all the assets of the former RDA and be required to make payments and perform “other obligations” of the former RDA, said city attorney Johanna Canlas. The city must also dispose of all former RDA assets and properties “expeditiously and in a manner maximizing value,” she said.

Under the Supreme Court decision, proceeds will be distributed similarly to normal property tax proceeds. Up to 5 percent for fiscal year 2011-12 and up to 3 percent thereafter of property taxes will be allocated to the successor agency (not less than $250,000).

“This is a very dynamic time,” said Canlas. “We’ve had two weeks to digest what it means. Different general councils of RDAs and city attorneys along with city managers and other staff are trying to figure out the best way to protect the city and how to implement this. As you can tell, the legislation is pretty much sausage making, so it’s very difficult to marry all the different components, but we will keep you up to date and it would not be surprising to you to find that another item is going to be before you in the future.”

The agency will have a seven-member board consisting of the mayor, county superintendent of education, chancellor of California community colleges, the largest special district, a former RDA employee, a county Board of Supervisors representative and a Supervisor-appointed community member. The director of the department of finance will oversee the agency.

The Supreme Court outlined that the agency “must be sensitive to the long-term development needs of the city” and “must protect and ensure the city’s reputation in the financial markets.”

In response to concerns by councilmember Thomas Campbell, Canlas assured the council that there will be no obligation against the general fund to make payments, because there will be an ongoing source of funding from the previously defined “tax increment” — increased property taxes resulting from redevelopment activity.

“This is really important,” Campbell said. “It’s a big financial obligation. What if one day they decide not to give us the money.”

Canlas said now is the only time to opt in to being the successor agency, but there is always the option to opt out. At that point, Ott said, responsibility would fall into the hands of San Diego County.

Solana Beach has used redevelopment funds to pay for local projects such as the refurbishing of the Fletcher Cove Community Center; the rebuilding of Fletcher Cove Park; and the construction of the pedestrian bridges connecting Highway 101 to Cedros Avenue.

The affordable housing complex proposed for South Sierra Avenue would not be affected by the Supreme Court’s decision because funding is already secured from a 1993 legal settlement, Ott said in a statement. He said supplying many of the state-required 151 affordable housing units by 2020, however, would become more challenging.

Neighboring cities Del Mar and Encinitas do not have redevelopment agencies.

In an act of what Canlas described as “civil disobedience,” Los Angeles opted not to become the successor RDA. Ott said they are so big that they have more leverage to do so, and the city’s decision was more of a “statement to cause confusion at the state level.”