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Supreme Court Kills Redevelopment Agencies

A recent state Supreme Court decision will require local business-boosting agencies to shut down.

It's curtains for redevelopment funds in Lake Elsinore and Wildomar.

A recent state Supreme Court decision will likely force the cities to close their redevelopment agencies, which dole out money for projects designed to bring new business into town.

California justices decided Thursday morning the state has a right to seize more than $1 billion in redevelopment agency funds, putting about 400 agencies in jeopardy.

The decision comes months after state legislators approved a plan to force agencies to turn over huge sums of money or face closure. Seizing the redevelopment funds was just one piece in a larger plan by the legislature to recall money from local governments and use it to fill the state's yawning deficit.

In the case CRA v. Matosantos, the Court also struck down the separate law that would have allowed redevelopment agencies to fund local projects if they paid into state coffers.

A Blow To Local Development

Local leaders said the decision was a blow to business development, but affirmed their commitment to find new ways to excite investment.

City council members in Lake Elsinore and Wildomar to recall redevelopment funds, by officials.

Lake Elsinore Councilwoman Melissa Melendez said the legislature's decision to seize funds was a sign of the deep malaise overcoming Sacramento.

"What it says is they're incapable of balancing the budget within normal means, and now they're turning and taking it off the backs of their cities," Melendez said.

Lake Elsinore redevelopment funds were slated for use in building Pottery Court, . Money from the fund was also used to .

Justin Carlson, city manager for redevelopment in Lake Elsinore, said city staff was reviewing the court decision and would have to comply with whatever the state demanded.

"We're going to have to follow what the law says," Carlson said.

The agency has stopped preparing new projects, Carlson said. Projects already under construction would still receive funding, he said.

Melendez said council members would find another way to bring in business.

"Really, what we need to do is just start engaging the development community and the private investors more and give them any incentive we can," she said.

Moving Forward

In a written statement, the CRA and League of California Cities vowed to continue the fight to save redevelopment and called for their own special legislation that would re-establish redevelopment in California.

"Without immediate legislative action to fix this adverse decision, this ruling is a tremendous blow to local job creation and economic advancement," wrote CRA Board President Julio Fuentes in the statement.

"The legislative record is abundantly clear that legislators did not intend to abolish redevelopment. We hope to work with state lawmakers to come up with a way to restore redevelopment."

Hazel Lodevico-To'o contributed to this report.

Connie December 31, 2011 at 01:03 AM
Redevelopment should be abolished!...I am glad it turned out this way!
Ken Mayes December 31, 2011 at 01:16 AM
So glad to see these pocket liner's go away although not happy that the state is stealing any money's left over so they can control who's pockets get lined.
Tonto December 31, 2011 at 01:44 AM
The State should refund the 1 billion $ to the taxpayers now!
Connie December 31, 2011 at 01:55 AM
Perhaps this decision will also have an impact on the Agenda 21 scam!...This will definitely stop the corruption between, city managers, city attorneys, councilmembers, and developers and realtors they have aligned with in the past!...This is a victory for the people, and I agree with Tonto that the taxpayers should have their monies refunded, but we all know this will never happen!
Roberto December 31, 2011 at 04:24 AM
I'm elated, this is good news and long overdue.
Ken Mayes December 31, 2011 at 06:53 AM
You can wait till hell freezes over for a refund, Sacramento has already spent the money.
Roberto December 31, 2011 at 03:02 PM
This should kill two high density apartment projects scheduled to be built on Lake Shore. This is truly good news for the American Taxpayers. I think Melendez stepped on something squishy.
Anon December 31, 2011 at 03:52 PM
Pottery Court should be stopped. Lets bring in more illegals and give them section 8, then watch them destroy what our tax dollars built! They will trash that place up in no time!
Bill Bull December 31, 2011 at 04:21 PM
What will the local politicians do for money ? They bought a $4mllion+ piece of vacant property that is still vacant today for "redevelopment" from their leading campaign contributer. It sounds like their already looking for another source of revenues to finance their campaigns for a better paying job. Lookout Taxpayer!
Stephanie Smith December 31, 2011 at 04:24 PM
Redevelopment in and of itself is NOT the evil thing so many of you are describing. Redevelopment funds were used to construct our Storm Stadium, still considered the finest Single A stadium in the country, it was used to make improvements to the boat ramp, it was used to remodel the downtown, including the planters, the lights, the cobblestone walks. It was even used to make infrastructure improvements for the Outlet Center years ago. I've lived here almost 25 years and if you've lived here that long you know what Main Street looked like before it was remodeled. It is 1000 times better now. If the Redevelopment Agency uses funds for projects you don't like, then it's your responsibility to let them know how you want the RDA money spent, not complain to people who can't help you about how many apartments, poor roads, etc, we have. As for the project on Pottery Court, the approval process for renting government sponsored Affordable Housing would never allow undocumented immigrants or those with a criminal record to live there. If you are against poor people on principle, then shame on you. See this RDA money grab for what it is, a way for the state to balance their budget without having to cut their own spending. The money is not extra taxes, it comes from the way our current property taxes are split up. I would much rather have local control over my property tax money than giving that money to the State and hoping some of it gets returned to Lake Elsinore!
Secrets of Safety December 31, 2011 at 04:44 PM
Tough times, tough decisions. Redevelopment isn't immune, especially when our education and senior citizen resources have already been cut back. However, I will also say, we NEED to stop voting the same people back into office to go to Sacramento and waste money and continue spending money our state doesn't have. I don't understand how the state has the right to over spend and refuse to balance the budget. If citizens did the same thing, they would starve. California needs to change policies and make our state business friendly again. Our government has chased out business and driven our unemployment up for years. We need to have a tax base that will sustain the spending. People can't pay taxes on zero income. People can't get jobs if businesses are leaving the state instead of opening up in this state. A social state (which California is) cannot pay out to citizens, money they don't have. I'm glad to see that the "low-income" projects have to stop. We all know what "low-income" projects do to our communities. The government likes to put up a bunch of boxes and dump "low-income" people into them and sit back and watch the area decline, then use redevelopment money to build more somewhere else. If the people of a community don't care enough to keep the area "up", redevelopment isn't going to change it. Waste of money.
Tonto December 31, 2011 at 05:15 PM
The tax money needs to be "redeveloped" back into the taxpayers pockets :( I want my money back!
Bill Bull December 31, 2011 at 05:30 PM
Buckley got money from the Shopoff Group and where do you think alot of Magee's war chest came from.We sure don't need Buckleys spending habits. The Staduim almost broke the city they were happy to give it away.
D A December 31, 2011 at 10:12 PM
Development should come on its own merrits, What do we have to offer without giving the developer 50 percent of the sale tax revenue for ten to 15 years to repay for infastructure like they did with wally world?. ...I guess that leaves it to the ??????????????? Imagination! There ARE SOME GOOD DEVELOPEMENTS THAT CAN BE DONE , But who can we trust?
Tonto December 31, 2011 at 10:22 PM
I would like to "redeveloped" my house with the money they stole from me :(
Ken Mayes January 01, 2012 at 01:02 AM
The Pottery street project will continue as it was started before the courts ruled therefore grandfathered in. As for Main street in Lake Elsinore looking better than it did in years past because of redevelopment funds, you can put lipstick on a pig and it will still be a pig.
Roberto January 01, 2012 at 02:40 PM
The RDA Diamond Stadium was supposed to cost 8 million dollars to build. It cost the taxpayers 35 million dollars. The did not rehabitate a blighted area. This was nothing but fraud and abuse. White collar crime is rampant in Rail Road County.
Tonto January 01, 2012 at 04:10 PM
"build it and they will come" LOL, LMAO
Diana January 02, 2012 at 05:59 PM
This is great news, our RDA funding has been misused for years in our town, the Pottery project and the revamp of the Park only came about when the State threatened to yank the RDA money away, then our city jumped out of no where with these two multi million dollar projects knowing that the RDA money could be taken away. Our city has sat on this RDA money for years without using it to improve our town, streets, sidewalks, and so on. Only what and when they saw the spending of these funds would benefit them did they actually come forward with releasing any of this money. Prior to the Pottery project and the park project all we heard from them was how broke the City is. As for Main St. it is little Mexico and that beautiful stadium is mismanaged and sits empty most of the time, what a shame.
Roberto January 02, 2012 at 10:23 PM
The RDA spending 35 million to build a 8 million dollar stadium is fraud and abuse. There was nothin that area so it wasn't a blighted area that needed redevelopment. Thank goodness the apartment on Lakeshore won't be built now.
Linda Ridenour January 06, 2012 at 10:10 PM
I would like to know what happens to the redevelopment money left in the Lakeland Wildomar PAC? What has been accomplished in the last several years. I can only remember giving Ly market $90,000 to fix up the front of the place. As far as I know, there was no money spent on the homeless or low income homes. The only new businesses were the marijuana shops which were recently closed. Redevelopment money has specific requirements on how it is spent. Millions of dollars was spent. I would like to know where it went.

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