The Redevelopment Fiasco

The dissolution of redevelopment agencies (RDAs) across the state -- finalized in a decision by the California Supreme Court in December of last year -- dealt a mighty blow to many cities as they attempt to unwind some fifty years of public policy. That dissolution was passed in the span of some two hours after Assembly Bills 26x (the "Dissolution Act") and 27x, both authored by San Fernando Assemblymember Bob Blumenfield, reached the floor in June of last year. For some, it was a necessity in helping alleviate California's budget woes, as expressed by Governor Jerry Brown who immediately signed the bills shortly after; for others, including our City, it was a devastating blow whose legality needed to be questioned.

26x was the bill that essentially eradicated RDAs throughout the state that would not follow 27x (below) and lined forth the process into which they would dissolute; this included the naming of successor agencies, paying their debts, and the transfering of housing obligations and duties.

27x was a compromise bill packaged with 26x, basically stating that any RDA could continue its work -- some of which many consider essential to a city's structural and social health, considering the agencies clean up streets, beautify sidewalks, modernize building facades, amongst other endeavors -- if they contributed some $1.7 billion back to local schools during the 2011-12 fiscal year. 

Things, as often goes in politics, didn't flow in the intended direction. Many RDAs questioned the legality of 26x in a lawsuit filed and led by the California Redevelopment Association and League of California Cities (California Redevelopment Association, et al. v. Matosantos, et al. (Case No. S194861)). On December 29, 2011, the Court dealt a blow to the fighting RDAs: 26x was constitutional but 27x -- the hanger bill that could have possibly saved some RDAs -- was not.

This decision effectively shuttered every RDA across the state without the possibility of surviving, including Long Beach's RDA on February 1 of this year. The City of Long Beach is one entity that questioned (and, in the words of Director of Government Affairs and Strategic Initiatives Tom Modica, "remains to be entirely against the legislation") not only the consitutionality of 26x, but its clarity as well. One of the largest questions that lingers in the bill's supposed legality is its lack of protection of taxpayer money. With regards to Long Beach, city taxpayers lent some $119 million to the agency in the assumption the agency will pay it back over the course of the next twenty years; however, the bill voids those repayments, leaving the hole in the pockets of our citizens and State to collect it.

The City Council then assumed the role as the successor agency persuant to 26x. In other words, the Council now acts the entity which winds down the leftover affairs of the agency, including what the RDA is required to pay back, otherwise known as the Enforcement Obligation Payment Schedule (EOPS).

To further complicate matters, a board which oversees how the handling of the agencies affairs will go forth is required -- none of whose seven members are appointed with public opinion due to the way the legislation was written, thereby giving the State full control over who appoints who to these important boards. The first appointer is the mayor, who has the power to appoint a member to represent (former) agency employees and the City; the County appoints a member, who additionally appoints a member to represent the public and a member to represent the largest special district in the redevelopment district (in this case being the Flood Control District); the County Superintendent of Schools appoints a member (in this case a Long Beach Unified School District representative); and the Long Beach Community College appoints a member (in this case, its president).

On May 7, the Oversight Board of the Successor Agency to the Redevelopment Agency of the City of Long Beach met formally for the first time and consisted officially of the following people:

  • Carol R. Meyer
  • Jane Netherton (Chair)
  • James Novak
  • Eloy Ortiz Oakley (Vice Chair)
  • Richard R. Powers
  • Teer L. Strickland
  • Ellie Tolentino

During that meeting, after asking considerable amounts of questions regarding why certain obligations were required to be obligatory, the Board approved its first Regonized Operation Payment Schedule (ROPS), in conjunction with the EOPS, that will allocate monthly payments of the RDA's obligations over the next six months of the fiscal year; this has now been sent to the State Department of Finance, who will either approve or disapprove of what are or aren't obligations. A ROPS will then be enacted every six months until the entirety of the EOPS is completely repaid.

When asked if any city was going to further pursue litigation, Modica informed the Long Beach Post that "it is being talked about. I think that is something every city is contemplating and while I can't go into any actual litigation strategy, I can say that it is something that has been deeply discussed." Until that litigation becomes more tangible, the City continues to work on "cleanup legislation" with the Speaker's office -- AB 1585, which has passed the Assembly and is now in the hands of the Senate, is an example of language formally introduced in an attempt to alter 26x -- to get further clarity to what mostly remains a murky bill.

The Oversight Board will continue to meet the first Monday of every month at 10:00am at the Council Chamber in City Hall, 100 W. Ocean Boulevard. The meetings are open to the public.

CORRECTION: The article originally stated that meetings are at 9:00am; the Oversight Board changed it to 10:00am. Also, 27x was packaged with 26x, not contingent on 26x's passing.

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