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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.

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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