A.J. WILSON
BY KIMBERLY PIERCEALL
STAFF WRITER
kpierceall@pe.com

Published: 08 June 2012 07:27 PM

The Inland Valley Development Agency can count on $22 million in tax revenue for road improvements near San Bernardino International Airport, but it is small consolation for the additional $410 million the state says it will withhold from the agency.

The money would have paid for airport construction and cash incentives to attract a commercial airline.

The state’s Department of Finance, which has been overseeing the dissolution of California’s redevelopment agencies, considers the IVDA to be such an agency. In May, the department initially denied the IVDA’s claim to $432 million because there were no existing contracts to use the money.

The state recently reconsidered, allowing IVDA to use the $22 million it wanted for road projects and improvements to San Bernardino’s Mountain View Avenue bridge, according to a letter dated May 25. The fixes will benefit the airport as well as other development on the former Norton Air Force Base property.

Before they were dissolved in February 2012, California’s redevelopment agencies used tax increment — a portion of property tax revenue generated by redevelopment — to pay for development or make debt payments for projects that were financed through bonds or borrowing. State lawmakers voted to cut the agencies and send the tax increment revenue to schools, cities, counties and special districts instead; the change will save the state an estimated $1 billion this fiscal year.

Redevelopment agencies have been allowed to keep tax increment revenue to pay off existing obligations, meaning contracts already are in place.

IVDA officials have maintained that their agency shouldn’t be lumped in with traditional redevelopment. It was created as a joint powers authority through specific state legislation to bring new industries to the closed Norton Air Force Base and replace lost jobs, and therefore shouldn’t be dissolved, officials contend. The agency filed a lawsuit in Sacramento Superior Court asking the court to decide.

The state has argued in a separate, but related, legal matter that the law dissolving redevelopment agencies clearly applies to the IVDA.

To read entire story, click here.