Future of Santa Monica Projects Uncertain in Wake of Supreme Court Decision

By Jason Islas
Lookout Staff

January 4, 2012 -- Santa Monica will have to reevaluate many of its capital projects after California's Supreme Court upheld Governor Jerry Brown's move to ax redevelopment agencies throughout the state.

Under the December 29 ruling, 400 redevelopment agencies (RDAs) will close by February 1 and their municipalities will lose those funds, which in Santa Monica could jeopardize as much as $300 million worth of capital projects.

“We're looking at [the effects] very carefully and taking it project by project,” said Kate Vernez, the City's Deputy Director of Special Projects, adding that City officials did not yet know the exact impact of losing the funds.

Santa Monica relies heavily on redevelopment funds for affordable housing projects, Vernez said.

“Eighty per cent of Santa Monica affordable housing” is funded with redevelopment money, she said.

It is unclear how the City plans to handle the sudden loss of funds after State lawmakers approved the governor's plan to use to money to bridge its $1.7 billion budget shortfall.

In a statement issued after the the December 29th decision, City Manager Rod Gould said, “It’s regrettable that the Legislature and Supreme Court have stripped cities and counties of the one tool to produce affordable housing, generate jobs and refurbish critical infrastructure.”

He emphasized that redevelopment agencies were especially important in these lean times.

Though RDA money that has already been committed by contract to projects will remain unaffected by the decision, according to Gould, there is almost $300 million that could be jeopardized.

At its last meeting of 2011, the City Council transferred $267,667,608 of RDA funds to the City's general fund to be later distributed to a wide range of projects throughout the city, including $111 million that was slated to go to several low-to-moderate income housing projects throughout Santa Monica.

Other major projects that would've received RDA money were the Palisades Garden Walk and Town Square projects. Together, they would have received $48 million. Approximately $47 million has been earmarked for Civic Center improvements.

Governor Brown has said that the money the State would recover from canceling the RDAs would ensure funding for schools and public safety.

City officials say some of the funds are currently being used for those purposes.

“For years the City has been working to implement its Redevelopment Plan through a number of public works projects that will enhance community safety and welfare,” said Gould.

Now, the City will have to look elsewhere to fund those improvements unless the State Legislature makes a move to recreate the RDAs, something advocates of the agencies are expected to lobby for, according to news reports.

Santa Monica has been reaping about $60 million a year since the City Council rushed to declare two-thirds of the city an earthquake recovery district after the 1994 Northridge earthquake.

Since then, the City has collected property taxes normally earmarked for social services and used the cash for a bevy of projects, including the purchase of the RAND property for $53 million, affordable housing and new parks.