See Concord City Manager Dan Keen’s defense of the political slush fund known as the Concord Redevelopment Agency, in response to California Governor Jerry Brown’s sensible proposal to shutter 400+ redevelopment agencies statewide. Keen’s current mission, according to one top city source, is to flat-out tell the elected City Council—that is not only clueless but shorthanded—what to do next with upcoming budgeting and spending decisions. Keen crows that Concord would be a wasteland without past (and future) redevelopment projects, which of course is nonsense. But this is the guy running Concord for the next two years—so much for elections.
Career city planners and bureaucrats like Keen, and even Concord’s Mayor Laura Hoffmeister—who has her own sordid history of secretly pushing legislation protecting redevelopment eminent domain abuse without public input—never bring up the fact that lost (past and future) tax revenue shunted to these slush funds for developers, favorite builders, lawyers, unions, and consultants have cost the county fire district, schools, and other city and county services tens of millions of dollars. Nor can they justify that the projects they crow about actually were the best outcomes vis a vis what market forces might have accomplished.
In Contra Costa County, sixteen of nineteen cities have redevelopment agencies. Once an RDA is established, nearly the entire increase in property tax revenues goes directly to the RDA and not to the usual service agencies, such as schools, community colleges, libraries, fire departments, water and flood control districts, parks, etc. One of the special districts directly affected by redevelopment is the Contra Costa County Fire Protection District, which, according to Grand Jury Report #0403 lost over $10 Million or 17.6 percent of its revenue in fiscal yr 2003-2004, alone!
RDAs also like to be crafty and secretive and carry lots of debt. Recall the $25 million that the County RDA spent to build parking at the Pleasant Hill BART station on behalf of developers, instead of building low and moderate income housing.
Redevelopment is one of those concepts that sound so good on paper. The financial catch though is schools and other local agencies have their share of taxes limited for decades. Each year in California: More than $3.1 billion in tax revenue goes to RDAs; Over 10% of all property taxes diverted from public services. More than a million acres are tied up in tax revenue diversion. In Contra Costa, 25% of developed land is in some redevelopment area. Much of Pittsburg is an RDA. Its RDA’s long-term debt exceeds $230 million and counting. San Jose has been the poster child for redevelopment with long-term debt of more than $2 billion.
Recognizing the strain that redevelopment financing was causing local jurisdictions, central planning has a way of doing this, the State of California tried to throw indebted agencies a rope to regain some of the tax increment through payments called pass-through. Even so, The Sacramento Bee estimates the state pays $1.5 billion to schools each year just to make up for the money diverted to RDAs
RDAs in California have indebtedness of over $56 billion. These bonds are issued by RDAs (Concord City Council acting as RDA board) that do not require voter approval let alone a 55% majority. RDAs are required by law to set aside 20% of their revenue for low- and medium-income housing, but the State Controller recently reported that only 3% was actually being spent for that purpose. So instead of undocumented fluff, perhaps the City Manager could produce a report concerning Concord RDA compliance with state laws and a P&L that includes total funds diverted for all of those wonderful projects the City claims Concord can’t live without.
Memo to Council: save Concord some money and cancel the City’s membership in the League of California Cities. We simply can’t afford the travel to all of their soirees so you can be inculcated in the best practices of eminent domain abuse and central planning techniques. Plus…plus…you’ll end up saving us billions.