California State Supreme Court upholds abolishing state's notorious Redevelopment Agencies, implications for construction projects

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12/30/11, "California's RDA ruling could affect A's, 49ers, Chargers stadium plans," Neil deMause, Field of Schemes

"As if the umpteen stadium and arena battles ongoing in California needed more drama, the state's supreme court handed down this yesterday:

The court ruled unanimously in favor of a state law passed last summer that abolished redevelopment agencies and voted 6 to 1 to strike down a companion measure that would have allowed the agencies to continue if they shared their revenues.

More than 400 redevelopment agencies will cease to exist after Feb. 1. Authorized by law since 1945, the agencies have been responsible for such success stories as Old Pasadena and San Diego's Gaslamp Quarter but also plagued by projects that some argued had little public benefit.

First, some brief backstory: After Gov. Jerry Brown declared his intentions earlier this year to stop allowing city redevelopment agencies to siphon off property tax proceeds for local development projects, the state legislature offered a compromise of sorts: If RDAs would cut the state in on a share of the boodle, they'd be allowed to continue. Yesterday's court ruling struck down that deal, saying that while the state could shut down RDAs it couldn't attach strings to them; and so,

• as of a month and two days from now,
  

• all RDAs will cease to exist.
  

(Ironically, the court was ruling on a lawsuit filed by a bunch of cities and their RDAs, which were trying to knock down only the piece of legislation that would eliminate RDAs, not the one that would allow them to continue. Whoopsie.)

This is big news for the sports world because, as you might imagine, cities have been thrilled to hand out development dollars when it's not really their money they're spending. (While technically RDA spending is just a straight-up TIF — any new tax revenue gets diverted to pay for the project — in practice, at least according to Brown, the state has ended up filling the gaps in school spending and other local services that have resulted.) So pretty much every sports construction project now underway or in the planning stages in California has involved RDAs,

• which means many of them may now be in jeopardy....

Oakland's Victory Court plan for an A's stadium appears to now be out the window, since that relied on an RDA-based TIF. However, its second "Coliseum City" plan for the A's and Raiders could still move ahead, according to Newballpark.org, as Oakland's existing stadium site is "part of a separate joint-powers agreement which allows the Coliseum Authority to raise money for its own projects.""...

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