The Santa Clarita City Council voted 5-0 Tuesday to pay the state for the privilege of continuing to use redevelopment in Newhall.

City Attorney Joe Montes termed it a “just in case” move on the part of the city – just in case the state Supreme Court decides it’s too late for cities and counties to take advantage of a closing loophole when it rules on the constitutionality of the state’s new redevelopment law.

The state Legislature effectively killed redevelopment in June as part of the governor’s budget proposal, claiming redevelopment agencies were siphoning $1.7 billion per year from schools, fire departments and other public services throughout California.

The Legislature left open a window for cities and counties that want to continue to use redevelopment financing to renovate blighted areas: They could vote before Oct. 1 to pay the state their proportional share of the $1.7 billion this year. The statewide figure falls to $400 million in future years.

The California Redevelopment Association sued to block the law on grounds it violates Proposition 22, the voter-approved, November 2010 ballot measure barring the state from taking money from cities, counties and redevelopment agencies, as it had done in prior years to balance its own budget.

The Supreme Court issued a temporary injunction but upheld certain aspects of the new redevelopment law in the meantime (for instance, agencies can’t incur new debt or spend redevelopment dollars). The court said it would rule no later than Jan. 15, but Montes said it failed to issue guidance on the time lines. Nobody knows whether the Oct. 1 cutoff date is firm.

Montes told the council that if the court rules the new law is constitutional, Santa Clarita would have its pay-to-play resolution in place. It could continue doing redevelopment and pay the state an estimated first-year ransom of $714,756. (The city is challenging the figure.) The money would come from the city’s redevelopment fund and would have no impact on other city services.

Contrarily, if the court rules the law unconstitutional, the city’s resolution would be “void by its own language,” Montes said, and everything would go back the way it was.
“We want to be prepared so we don’t miss the deadline,” he said.