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City of Santa Monica forced to make $21 million payment to cover state raid of local redevelopment funds

May 14, 2010
Contact: Andy Agle
Phone: 310-458-2251

Payment will impact proposed parks, housing, transportation improvements and community facilities

Santa Monica, CA – The City of Santa Monica Redevelopment Agency on Monday was forced to turn over $21 million to the Los Angeles County Auditor, a required payment resulting from the State’s decision to raid $2.05 billion in local redevelopment funds, as part of the 2009-10 State Budget. Instead of going to fund local parks, community improvements and affordable housing, the money has been siphoned off to help pay the State’s obligations.

The payment was made in accordance with a ruling by Sacramento Superior Court Judge Lloyd Connelly last week which instructed local redevelopment agencies to abide by the provisions of ABX4-26, passed last year as part of the state budget. The bill allows the state to take $2.05 billion in redevelopment funding to use for state obligations. The California Redevelopment Association (CRA) is appealing the Superior Court ruling to the Court of Appeal.

“Taking this funding comes at the worst possible time when other funding sources for parks, community facilities and infrastructure have dried up,” said Mayor Pro-Tem Pam O’Connor. “Moving forward on construction of these important projects would have provided a shot in the arm to the local, regional and state economy at a time when so many workers in construction and related industries are on the unemployment lines.”

“At a time when California is desperately in need of job creation and affordable, sustainable development, it is spectacularly short-sighted of Sacramento to reach into the pockets of local redevelopment agencies, the state’s primary engines for creating jobs, sustainable development and affordable housing,” continued Andy Agle, Director of Housing and Economic Development.

The projects that have been affected by the state raid, and may ultimately be cancelled if state raids continue, include:

• Palisades Garden Walk, a proposed 6-acre park on Ocean Avenue and across Main Street from Santa Monica City Hall.
• Seismic retrofitting and rehabilitation of the landmark Santa Monica Civic Auditorium.
• A new park and related cultural facilities adjacent to the Santa Monica Civic Auditorium.
• Shared parking facilities to serve the Santa Monica Civic Center area.
• An early childhood education center in partnership with Santa Monica College.
• Shared-use facilities at Santa Monica High School, including a bikeway and pedestrian promenade, tennis courts, football stadium and undergrounding of surface parking.
• Traffic signal synchronization on major street corridors.
• Station area improvements associated with the Exposition Light Rail line.
• Pathway and street improvements associated with the Exposition Light Rail terminus.
• A new branch library to serve the Pico Neighborhood.
• Investment in affordable housing, above and beyond what is required by state law, that could fund up to 200 additional affordable homes in Santa Monica.

Using the ARRA stimulus standards, new construction projects identified above are expected to create nearly 3,600 full-time-equivalent construction-related jobs. Identified rehabilitation projects are expected to create nearly 1,400 construction-related jobs. Using IMPLAN input-output economic modeling, with includes the multiplier effects of spending, the projects are expected to promote the creation of over 40,000 full-time equivalent jobs.

California Redevelopment Association Executive Director John Shirey vowed to fight the Superior Court ruling: “We strongly disagree with Judge Connelly’s ruling which effectively says the Legislature has unlimited discretion to redirect local redevelopment funds to any purpose it wishes. Under that logic any state program could be called redevelopment. The Legislature needs to deal with its budget problems by making hard decisions using its own limited resources -- not by taking away local government funds.

“Despite this ruling we continue to believe taking local redevelopment funds and using them to fund State obligations is unconstitutional. We have a strong case and feel confident the lower court ruling will be overturned by the Court of Appeal,” said Shirey.

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