While it is definitely not the end of the world, 2012 will get off to a good start for the City of Santa Monica and about 400 other municipalities across the state, as the California Supreme Court issued a ruling on Dec. 29 upholding legislation that shut down hundreds of local Redevelopment Agencies (RDAs).
Interestingly enough, while justices ruled the elimination of RDAs through ABX126 was valid, the Court also decided the state’s demand that RDAs could remain in operation if a city made what local officials labeled as “ransom payments” was unconstitutional.
The ruling, which cannot be appealed to federal court, means City Hall must now find alternative sources of funding for its many “priority projects” planned between now and 2016.
City Manager Rod Gould said while the ruling was indeed a blow to Santa Monica’s grand redevelopment plans – which include projects such as affordable housing developments, Palisades Garden Walk, Town Square Park, the refurbishing of Santa Monica Civic Auditorium, and the rebuilding of Parking Structure 6 – City Hall would execute the alternative strategies it developed since the adverse legislation was signed by Gov. Jerry Brown.
“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,” Gould said. “This is especially true during this time of double-digit unemployment, crumbling infrastructure, and a paucity of affordable housing in our state.
“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. It’s our intent to move forward on existing projects where we have contracts which are unimpeded by the Court’s decision.”
Meanwhile, Brown, who pushed hard to cut RDAs in order to redirect nearly $5 billion of property tax revenue to schools, lauded the state Supreme Court ruling in a statement released to the press.
“Today’s ruling by the California Supreme Court validates a key component of the state budget and guarantees more than a billion dollars of ongoing funding for schools and public safety,” he said after the ruling.
On Nov. 10, the California Supreme Court heard oral arguments in a lawsuit filed against the State by the California RDA and several municipalities to prevent Sacramento from cutting off redevelopment money to the cities. The lawsuit sought to have both ABX126 and ABX127 declared unconstitutional.
Under ABX126, the state government suspended all activities of the Santa Monica RDA, except for enforceable obligations.
Though struck down, ABX127 required municipalities to agree “to pay the remittance amount determined due by the State Department of Finance to the County Auditor-Controller” if it sought to continue operating the RDA.