City Appeals State-Mandated Payment to Retain Redevelopment Agency

Rohnert Park in 1987 sectioned off more than 1,700 acres of the city — mostly west of the railroad tracks, but also including the land occupied by Sonoma Mountain Village, the Community Center and parts of H Section — and deemed the land "blighted."

That allowed the city's redevelopment agency, here called the Community Development Commission, to rebuild dilapidated or vacant swaths of town by spending a portion , otherwise known as tax increment.

What ensued over the next 24 years in Rohnert Park was the construction of City Center Plaza, City Hall, the Public Safety Department, a peppering of low-income housing projects throughout the area including and the demolition of the, amongst other projects. 

And the city currently has another planned, such as the rehabilitation of the Southwest Shopping Center and refurbishing the city's recreational facilities including pools and the Community Center complex.

But Gov. Jerry Brown has condemned the practice of redevelopment agencies across the state, calling them flawed and unaccountable. And State Controller John Chiang found in a March 2011 audit that a sampling of the state's 425 redevelopment agencies misused funds, stretched the definition of "blight" or found agency .

“For a government activity which consumes more than $5.5 billion of public resources annually, we should be troubled that there are no objective performance measures demonstrating that taxpayers are receiving optimal return for each invested dollar,” said Chiang said in a news release. “Locally-controlled economic development is vital to California’s long-term prosperity. However, the existing approach – born in the 1940’s – is not how anyone concerned with performance, efficiency and accountability would draw it up today.”

Subsequently, Brown June 29 offered cities a choice — dissolve your redevelopment agency or pay the state to keep it going. The laws are called ABX1 26 and ABX1 27, respectively.

In Rohnert Park, the law states the CDC has to pay a hefty one-time fee of $4 million for this year, and between $700,000 and $800,000 every subsequent year to keep the redevelopment agency going, according to Babonis. But, she argued, the city only owes somewhere in the range of $2 to $3 million for the first-time payment, based on the outcome of the appeal.

Linda Babonis, the city's housing and redevelopment manager, called the law a "ransom payment," and has filed an appeal disputing the $4 million.

"For some cities, this is a game-ender," Babonis said. "And we stand to lose many of the city's properties unless we make this 'blackmail payment.'"

Babonis said at stake is the city's Senior Center, funding for local nonprofits like Sonoma County Adult and Youth Development, the Committee on the Shelterless and Rebuilding Together, for example.

The City Council on Tuesday will take up the issue and vote on whether or not to make the payment once the final amount is decided upon.

"This is going to be one of the toughest decisions the Council will ever have to make," Babonis said.

Babonis said even if the city decides to make the annual payments, the redevelopment agency could be at risk because of declining property values due to housing foreclosures and the city's increasing 42-plus .

If the payment is big, we may not be able to continue projects and programs, and develop the properties we do have, she said.