Eminent Domain Report

It has been rumored for some time that a two bill strategy to eliminate redevelopment has been in the works.  Bill #1 would eliminate redevelopment agencies as of a specific date and bill #2 would exempt any redevelopment agency from elimination if it makes specified payments for the state. 

The text of those bills has now been released.  As predicted, Bill #1 (SB 14x / AB 26x) would, immediately upon enactment, suspend most agency activities including the issuance of new bonds, entering into new contracts, acquiring or disposing of properties, or taking other actions beyond the servicing of existing contractual obligations.  Effective October 1, 2011, the bill would dissolve all redevelopment agencies and designate successor agencies.  County auditors would be required to conduct an audit of each former redevelopment agency by March 1, 2012.

Bill #2 (AB 27x / SB 14x) creates an alternative ongoing redevelopment program.  Redevelopment agencies would be authorized to continue to exist upon enactment of an ordinance to comply with this bill's provisions.  Among those provisions is a requirement that participating cities or counties make specific payments to a Special Districts Allocation Fund and a County Educational Revenue Augmentation Fund.  These monies would then be used to fund schools, fire districts, and transit districts.

One provision that has drawn the ire of many allows the Community Redevelopment Agency of Los Angeles to receive redevelopment revenues beyond a court-ordered cap that the city has already hit.  In view of the firestorm of controversy surrounding this provision, it may soon be struck from the bill.

As both supporters and opponents of redevelopment digest the text of these bills, there will no doubt be more in the way of controversy.