January 23rd, 2012, 9:20 pm
Posted by Teri Sforza, Register staff writer
As the lights are fading to black for California’s 425 redevelopment agencies, their successors will inherit $29.8 billion in unpaid long-term debt, according to the latest figures from the state controller’s office.
And that doesn’t include the wild-eyed issuance of at least $700 million in new debt last year, when the agencies had a hunch they’d soon be dismantled.
Orange County’s 25 redevelopment agencies — with 38 different project areas — had racked up $2.2 billion in outstanding debt by 2010.
The biggest bills in O.C. belonged to Santa Ana ($547 million), Anaheim ($220.9 million), Brea ($192.8 million) and Irvine ($181.6 million).
The details of how all that money will be repaid are being worked out in the sausage mills of Sacramento. (See the long-term debt of all 25 O.C. redevelopment agencies below, as well as summaries of what the local agencies accomplished in 2010.)
Redevelopment agencies were the Legislature’s brainchild more than 60 years ago. The idea was to help cities battle blight and urban decay: Once a specific area was declared a redevelopment zone, the city could keep a larger slice of the property tax pie, and plow that money back into sprucing the area up.
Critics, however, argued that cities misused the money for projects favoring developers, or failed to deliver, or horded millions in reserve accounts (or all of the above).
One of those critics was Gov. Jerry Brown. And so last year, the Legislature dissolved redevelopment agencies, in an effort to recoup $1.7 billion in property taxes for the ailing state budget.
Cities fought. And lost.
And so here we are, with 425 redevelopment agencies slated to disappear on Feb. 1 – nine days from now — but with projects worth billions of dollars in all phases of development up and down the state.
“Nearly every redevelopment agency has design contracts pending on redevelopment infrastructure projects, for which a construction contract has not yet been entered into,” says the California Redevelopment Association. “Under terms of (the dissolution) those projects are dead effective February 1, yet the agency is legally obligated to honor the design contract. This will result in the payment of public funds for design work on a project which will never be built.”
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