Plan by Gov. Brown may prevent developments
James Rufus Koren, Staff Writer
Posted: 01/23/2011 09:18:23 PM PST

RIALTO – A state plan to take local tax dollars could cancel an expansion of Pepper Avenue and alter a plan to bring an In-N-Out Burger to the city.

Last week, city officials said Gov. Jerry Brown’s plan to shut down local redevelopment agencies likely would not hurt a redevelopment project that would help build an In-N-Out on Riverside Avenue just south of the 210 freeway.

But now officials say Brown’s plan might mean the city itself might have to front some of the money for the In-N-Out project and that other projects could be in jeopardy.

A briefing Thursday by the California Redevelopment Association “made me a lot more nervous than I was a week or two ago,” said Robb Steel, Rialto’s economic development director.

On Jan. 10, Brown proposed shutting down redevelopment agencies, which are funded with a portion of local property taxes, and using their funds to pay for other programs.

But it’s not clear how or when that shutdown – if it happens – will happen.

Redevelopment agencies pay for projects by taking out loans, which are then paid off over the years with the agencies’ share of property taxes.

Rialto has already sold bonds – essentially taken out loans – to pay for the In-N-Out project, the Pepper Avenue extension and other projects, but Steel said he isn’t sure the projects will continue unless the Redevelopment Agency actually spends the money before the possible state shutdown.

“On Pepper Avenue, we haven’t awarded the big kahuna construction contract,” Steel said. “We’ve issued bonds and raised money and allocated all this money to projects…but the state might argue that unobligated bond proceeds might be an asset.”

The worry is this:

Brown’s plan, which was part of his January budget proposal and doesn’t include many specifics, says it would not harm “existing obligations.” But it’s not yet clear what would count as existing obligations.

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