CA Supreme Court Nixes Redevelopment Agencies, Santee Projects Continue

The California Supreme Court made a ruling Thursday that upholds a new law that will , dealing a blow to Santee city officials who tried to keep their agency open.

The state's high court struck down a companion statute that would have allowed local governments to keep the agencies alive by making payments to the state.

"Plain and simple, this money grab by the governor will have severe negative impacts on our neighborhoods and our economy for decades to come," said San Diego Mayor Jerry Sanders, and Santee is one of those places.

Redevelopment proponents argued that voter-passed Proposition 22, which bars the state from seizing local tax money, invalidated both laws. Redevelopment agencies are funded by the increase in tax revenue created by projects in their areas.

Supporters of the laws passed by the Legislature earlier this year, including Gov. Jerry Brown, say the money is better used to fund schools and other municipal functions during tight budgetary times. They cite a state analyst's report that shows the cost of redevelopment growing without any tangible economic benefit to the state.

Brown said the decision will free up more than $1 billion in on-going funding for education and public safety.

The justices determined that Proposition 22 did not address the Legislature's power to close redevelopment agencies, which were created after World War II.

Since the court ruling aborted the plan to allow local governments to buy back into redevelopment, the agencies will be phased out as their currently contracted projects are completed.

approved in Santee just this spring, including , are contracted and will continue as planned, Deputy City Manager Pedro Orso-Delgado confirmed in a report by Sign On San Diego.

The city of Santee and many other local jurisdictions were planning to pay the state to keep their agencies open. Santee was due to pay $3.7 million.

Sign On San Diego also reports that $10 million in tax-increment funds will be lost to the city annually, likely impacting future projects such as Mast Park improvements that have been developed recently.

Santee officials have pointed to and local affordable housing projects as examples of the success of redevelopment.

-City News Service with additions by Steven Bartholow