For cities like Burbank and Glendale, which have entire staffs devoted to managing local redevelopment zones, the impact of the court's decision could be massive and long-lasting.
“In essence, redevelopment is eliminated,” Ruth Davidson-Guerra, Burbank's assistant community development director.
More than 1,600 affordable housing units have been created since 1976 using redevelopment funds, she said, which represents a total investment of about $93 million. In Glendale, city officials said redevelopment funding has been used to produce roughly 1,000 units.
Redevelopment agencies came under scrutiny this past year as the state grappled with how to close a multibillion dollar budget gap. Critics contend the agencies sap badly needed tax revenue from the state for education and other programs.
In a statement on Thursday, Brown said the state Supreme Court decision “validates a key component of the state budget and guarantees more than a billion dollars of ongoing funding for schools and public safety.”
But proponents argue that by allowing local agencies to use the increased tax revenue generated by improved properties within a redevelopment zone to pay for other upgrades, jobs are created and cities can attract more private investment.
In Glendale, which had planned to make a $10.1-million payment to the state in order to keep its agency, redevelopment funds have been used for the Americana at Brand, the Disney Creative Campus and the historic Alex Theatre.
“Redevelopment has contributed tremendously to the growth and prosperity of Glendale,” said Glendale City Councilman Rafi Manoukian, who serves as chairman for the Redevelopment Agency.
The changes will throw a wrench into some proposed projects in Glendale, although officials are continuing to conduct their analyses.