BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 93|
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THIRD READING
Bill No: SB 93
Author: Kehoe (D)
Amended: 5/18/09
Vote: 21
SENATE LOCAL GOVERNMENT COMMITTEE : 5-0, 3/4/09
AYES: Wiggins, Cox, Aanestad, Kehoe, Wolk
SUBJECT : Redevelopment: payment for land or buildings
SOURCE : Author
DIGEST : This bill distinguishes between the public works
projects that redevelopment agencies can finance inside and
contiguous to redevelopment project areas and the public
works projects that redevelopment agencies can finance
outside project areas.
Senate Floor Amendments of 5/18/09 restore the statutory
requirements for public works inside redevelopment project
areas, and change the requirements for public works outside
project areas.
Senate Floor Amendments of 4/28/09 distinguish between
public works projects inside redevelopment project areas
and public works projects outside project areas.
ANALYSIS : Current law requires a city council or county
board of supervisors to make three determinations before
its redevelopment agency can pay for public works either
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inside or outside of a redevelopment project area:
1. The public works benefit the project area or immediate
neighborhood.
2. No other reasonable means of financing are available.
3. Paying for the public works helps eliminate blight
inside the project area, and is consistent with the
agency's implementation plan.
This bill distinguishes between the public works projects
that redevelopment agencies can finance inside and
contiguous to redevelopment project areas and the public
works projects that redevelopment agencies can finance
outside project areas.
This bill allows local officials to pay for public works
projects outside redevelopment project areas if they find,
based on substantial evidence in the record:
1. Paying for the public works are of primary benefit to
the project area.
2. Paying for the public works either help to eliminate
blight inside the project area or directly assist in
providing affordable housing.
3. No other reasonable means of financing the public works
are available, including an illustrative list of
financing devices, but local officials can consider
legal, economic, and political factors.
4. Paying for the public works is consistent with the
redevelopment agency's implementation plan.
5. The redevelopment plan provides for the public works.
This bill sets a 60-day deadline for filing lawsuits to
challenge these findings. This bill prohibits local
officials from paying for the normal maintenance or
operation of these public works.
This bill prohibits local officials from settling lawsuits
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contesting the adoption or amendment of redevelopment plans
if the settlement requires spending funds outside of the
redevelopment project area unless the local officials hold
a noticed public hearing on the settlement. This bill
requires the public notice to be published, posted, and
mailed.
This bill creates a cross-reference to these new
requirements in the existing statute that requires local
officials to give public notice before committing funds to
public works projects.
Background
In May 2005, the San Diego City Council adopted a
redevelopment plan for the 990-acre Grantville
Redevelopment Project Area. In July 2005, San Diego County
sued, alleging that the area did not meet the statutory
tests for physical blight and economic blight, that the
area was not predominantly urbanized, and that officials
failed to show that redevelopment was essential to
eliminate any blight.
In June 2008, the County and City agreed to a settle the
lawsuit challenging the Grantville Project Area. The San
Diego Redevelopment Agency will pay nearly $31.4 million
from the Grantville Project Area to the City of San Diego
for downtown transit line improvements. The Centre City
Development Corporation (the quasi-government entity that
manages redevelopment in downtown San Diego) will pay the
County of San Diego nearly $31.4 million for the North
Embarcadero Project Improvements on County-owned property.
The Centre City Development Corporation reported that the
payments to the County will be 80 percent of the property
tax revenues that the County would have received from the
Grantville Project Area. The July 2008 formal settlement
agreement noted that state law allows redevelopment
officials to pay for public works outside the project area
if local officials make determinations.
At Senator Kehoe's request, the Attorney General reviewed
the settlement agreement and raised two issues. First, the
Attorney General questioned whether Grantville funds should
pay for the downtown trolley projects. Second, the
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Attorney General noted that the settlement agreement "might
also be construed as an effort to bypass legal restrictions
on the use of redevelopment funds to settle litigation."
In September 2008, a local citizens group sued the City
over the settlement agreement. The case is pending and
there is no trial date.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/20/09)
American Federation of State, County and Municipal
Employees, AFL-CIO
California Redevelopment Association
California Rural Legal Assistance Foundation
Grantville Action Group (San Diego)
League of California Cities
San Diego Councilmember Donna Frye
San Diego Councilmember Marti Emerald
San Diego Councilmember Sherri Lightner
Western Center on Law and Poverty
OPPOSITION : (Verified 5/20/09) (reflects prior version
of the bill)
California Association for Local Economic Development
Cities of Alhambra, Brea, Burbank, Cathedral City, Fountain
Valley, Fullerton, Glendale, La Quinta, Los Angeles, Palm
Desert, Salinas, San Jose, Seaside, West Hollywood,
Westminster, and Winters
Counties of Monterey and Santa Cruz
San Jose Redevelopment Agency
AGB:mw 5/21/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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