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Loss of redevelopment agencies could slow development, city fears

Submitted by on 1, January 19, 2011 – 12:02 am8 Comments

Gov. Jerry Brown’s proposal to dissolve California’s redevelopment agencies could stall efforts to redevelop Alameda Point and many other areas of Alameda, city officials fear.

“There will be an impact on Alameda,” said Deputy City Manager Jennifer Ott, who said the city is surveying its existing projects and waiting on more details from the state to determine how deep the impact could be.

Ott said the city is also trying to figure out how the proposal would impact the city’s ability to pay its existing redevelopment debt. She said the city’s redevelopment agencies could continue to pay off existing bonds for redevelopment projects. But whether they will be able to cover other obligations – like a court settlement with Boatworks developer Francis Collins that promises future tax revenues to help fund that development – is less clear.

“How debt gets defined is important,” Ott said.

Roughly a third of Alameda is in a designated redevelopment zone. Alameda Point, Park and Webster streets and the Northern waterfront are all considered redevelopment areas, and past redevelopment projects have included Marina Village, the Alameda Theatre & Cineplex restoration and parking garage and the Bayport housing project. The designation allows the city to use future property tax revenues to subsidize development projects in those areas.

Proponents say the funds help jump-start revenue-producing developments that might have never happened, while opponents say that redevelopment puts money in private developers’ pockets at the expense of police, schools and other local services.

“I agree with critics who say that if projects are financially sound, private investment will fund them, and they don’t require taxpayer subsidy,” said David Howard, a longtime, local critic of the financing scheme.

In his January 10 budget announcement, Brown said that while he thinks redevelopment “has done some important things,” it has also forced the state to backfill property taxes used to fund redevelopment efforts.

“What we’re doing here is spending money at the local level that the state doesn’t have. So we want to take that money and leave it at the local level for the purposes that it was historically intended,” Brown said.

Howard, who has also criticized what he believes is a lack of oversight of redevelopment agencies, argued that eliminating them would free up millions of dollars in taxes for the city and the school district.

“The point is that it would free up local property taxes to fund local schools, and require less money from the State of California, which increasingly doesn’t have it,” Howard said.

Alameda Unified’s chief business officer, Robert Shemwell, said Brown’s proposal could increase the district’s share of each property tax dollar from 37 cents to 42 cents. But he said it’s not yet clear if the state would reduce the amount of money it pays out for schools.

Shemwell said he also expects the proposal to be challenged. “This probably isn’t going to be enacted as quickly as what one would think or hope,” Shemwell said.

School board trustee Mike McMahon said he’s not optimistic that local schools will see more money from the proposal, and Ott said she’s also not sure cities will get more direct funding.

“The impact to school funding will non-existence unless they change something,” McMahon said. “Property tax and redevelopment monies for Alameda would still not cover the state’s obligation (to fund schools), so the bottom line for Alameda is, no additional funding dollars. All it would do is reduce the state portion that they pay for Alameda’s students.”

Ott said she thinks Alameda Point is the “poster child” for why redevelopment exists. The cost of rebuilding roads, sewers and other infrastructure there was last estimated at more than $650 million. A quarter of any housing that would be built there must be affordable to low-income residents, and 20 percent of the future tax revenues collected would be paid out to support that.

“Every pro forma we’ve ever had at Alameda Point has assumed a significant amount of public financing to make that project work. Without it, it will be a tougher nut to crack,” Ott said. SunCal’s plan for the Point, for instance, relied on $212 million in public financing.

She said the money has funded streetscape improvements in Alameda’s business districts and other fix-it projects.

Still, Ott said projects like Lawrence Berkeley National Laboratory’s proposed second site, which the lab is now soliciting potential locations for, could also help catalyze development at the Point, without relying on redevelopment funding.

“It makes getting them even more important to be able to jump start and create value at Alameda Point, and to create a market out there,” Ott said.


  • Richard Bangert says:

    “help catalyze development at the Point, without relying on redevelopment funding.” “It makes getting them even more important to be able to jump start and create value at Alameda Point, and to create a market out there,” Ott said.

    The need to echo Jennifer Ott’s enthusiasm for getting the Lab (which is not going to close down and/or move to China) cannot be overstated. Experience at one the most successful base conversions, Devens, MA, offers lessons for here. Their massive Evergreen solar plant that opened two years ago with over $58 million in various subsidies has abruptly closed due to competition from China.

    Devens got up and ready to attract businesses with a $200 million infrastructure grant from the state in 1996. Since redevelopment funding here is going to remain in question for years, and California is not likely to give us infrastructure money, the logical place to look for infrastructure help is in Washington, DC. Along with getting Alameda Point for $1, federal help is the surest and least risky way forward. If we get the Lab AND the VA, that tells you right there that the federal government is buying into the future success of Alameda Point. We should build on that.

  • Dennis Green says:

    Alameda housing advocates are going to be luke warm in their support for a big lab and VA Center at the Point. That means the rest of us have to be all the more enthusiastic. The City should create a committee from Alameda’s scientific community to meet professionally with Lawrence Berkeley scientists to begin a dialogue about all the advantages of Alameda, including the ferry commute to SF and other destinations.

    We came very close to getting the UCSF second campus here in Harbor Bay that eventually went to Mission Bay, but with very little help from City leaders. Maybe the current CC will be more adept at recruiting important tenants to the Point.

  • Chuck says:

    Doesn’t Alameda Point suffer from the same problems as the Richmond Field Station, especially the one specifying that it “should be proximate to existing or planned restaurants and cafes which offer a range in price and food types, preferably within walking distance.” Didn’t Alameda reject a plan that “..[w]ould allow for sustainable land use and circulation patterns, maximizing density to reduce overall building footprints and conserve open space. The site should allow for the placement and massing of buildings to maximize shared views.” These are direct quotes from the LBNL request for proposal.

    Based on which is the ‘neediest’ community, I think the feds would help rejuvenate an area like Richmond before Alameda. After all, like Treasure Island, Alameda Point could be sold to a developer and help MAKE money for the feds, not cost them more money.


  • Jon Spangler says:

    Without significant financing – probably at least in part from redevelopment funds -we will never be able to build the new infrastructure that is required by Lawrence Berkeley labs (LBL) or any other serious tenants.

    What options are there other than a master developer with truly deep pockets for rebuilding and replacing the dying infrastructure at AP?

  • Adam Gillitt says:

    What options are there other than a master developer with truly deep pockets for rebuilding and replacing the dying infrastructure at AP?

    We tried a master developer already, and ended up with a $100 million dollar lawsuit from your associates at SunCal, Jon.

    We have lots of options, from the exciting new LBL proposal presented at Tuesday’s City Council meeting, to the VA Clinic and Columbarium, extending long term leases from successful businesses already at the Point, and the possibility of attracting new businesses there for America’s Cup and others. Giving away the farm to a malevolent enterprise akin to SunCal for vague promises of infrastructure and deep pockets that turn out to be bankrupt is not an option.

  • Scott says:

    Doing nothing s no longer an option

  • Lauren Do says:

    Jon: You’re right that without redevelopment funding, it definitely reduces the ability for the City to “go it alone” and fund the infrastructure needed and required for LBL. This is probably why the City is putting out a developer RFQ for early February in a parallel track with the LBL proposal in case Alameda is short listed.

    In addition to making Alameda Point attractive to LBL, Alameda is going to need to figure out a way to broker a deal that will be attractive for a developer to put up their private capital for improvements.

  • frank martin says:

    I feel that Brown has a long fight ahead in disolving Redevelopment Agencies in CA. Already many Cities including San Jose and LA are mobilizing.

    Then there is Prop 22 which was passed in 2010.


    The LWV were neutral on this Prop while the California Teachers Association was against it. Alameda (then) ICM came out for it.

    So the ‘bait’ that Brown is dangling’ is freeing up more money for schools. The question is will this really result in real $$$ or just a smokescreen.

    The BIG and still unanswered question is Healthcare and Pension Reform for State Employees. This he has so far avoided.

    This will be a long drawn out battle.

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