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Cities Wonder What's Next After Supreme Court Dissolves Redevelopment Agencies

January 5, 2012

League Continues Efforts to Protect Membership's Interests, Seeks Legislative Fix

On Dec. 29, 2011 the California Supreme Court ruled on California Redevelopment Association (CRA) v. Ana Matosantos by upholding AB x1 26, the redevelopment elimination bill, and striking down AB x1 27, the bill which would have allowed redevelopment agencies to remain in operation as long as they made payments to the state. As it currently stands, redevelopment agencies will be dissolved on Feb. 1.

 

Proposition 22 and the Supreme Court Ruling

Proposition 22 ultimately, and as intended, protected redevelopment funds from the planned $1.7 billion state raid to patch the FY 2011-12 budget through AB x1 27. However, the court upheld AB x1 26 concluding that the state, having the power to create the agencies, could ultimately dissolve them altogether since Prop. 22 did not specifically preclude this option.

CRA, the League and other plaintiffs argued that because AB x1 26 and AB x1 27 were sold as a "two-bill package," legislators clearly did not intend their votes to dissolve redevelopment agencies but rather garner funds for the budget. However, the court disagreed and concluded that AB x1 26 could operate legally without connection to AB x 1 27. 

The League has compiled a summary timeline of milestones and deadlines under AB x1 26. Cities should consult with their city attorney or redevelopment agency counsel for more information on actions required to implement AB x1 26. 

League Working to Seek Legislative Response

Yesterday the League board met and authorized staff to work with legislators, the Governor, CRA and other stakeholders on a proposal to extend the Feb. 1 deadline for the elimination of agencies so all parties can work on legislation to address state and local goals for job creation, infrastructure development, affordable housing, brownfield remediation, blight removal, military base reuse, and many of the purposes of redevelopment agencies. 

Next Few Weeks Critical

While this is an extremely difficult loss, the League board acted unanimously to protect our members' interests and defended Prop. 22 when the Legislature failed to pass the proposed CRA alternative that was supported by the League.

The next few weeks present the League with another opportunity to create an alternative fix which could ultimately retain the best elements of redevelopment. Given indications from legislators that dissolution of redevelopment agencies was never intended, the League believes there is a basis for support of a legislative fix.



 
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