In the wake of Thursday’s ruling by the California Supreme Court upholding the elimination of redevelopment agencies, the City of Santa Clarita is partnering with the California Redevelopment Association (CRA) and League of California Cities (League) to work with lawmakers to develop legislation to revive redevelopment in order to protect local jobs and neighborhoods.

“The City of Santa Clarita will work with state legislators and the League of California Cities to come up with ways to restore redevelopment efforts,” commented Santa Clarita City Manager Ken Pulskamp. “Despite today’s ruling, the City is committed to revitalizing downtown Newhall and creating programs focused on job-creation, environmentally sustainable growth, affordable housing, and the elimination of blight and economic disparity.”

The City of Santa Clarita created a redevelopment project area in 1997, which includes 914 acres generally along Lyons Avenue and Railroad Avenue. Over the past five years, the city has invested $48 million in redevelopment projects in Newhall, and the redevelopment agency has created more than 300 jobs since 2006, including 135 in 2011.

In CRA v. Matosantos, the Court upheld ABX1 26 (the redevelopment “elimination” bill), and struck down ABX1 27, the bill that would have allowed agencies to remain in operation as long as they made a payment to the state. The bills were passed as part of the 2011-12 state budget.

Today’s ruling also means that the State will not be entitled to receive the full $1.7 billion it had assumed as part of last year’s budget, creating a current year budget gap that will have to be addressed.

Senate President Pro Tem Darrell Steinberg, Assembly Speaker John Perez, along with many other lawmakers, made it clear that the legislative vote was intended only to extract revenues from redevelopment agencies, not abolish them altogether.  During the budget debate on the two bills, Senator Steinberg said “[T]his bill is the fair and right choice because it does not in fact eliminate redevelopment but it reduces its size.”

Chris McKenzie, Executive Director, League of California Cities said: “Redevelopment is indispensable to cities to spur economic development, create jobs and improve communities. We know legislators recognize that and we hope they’re willing to work with us to reinstate redevelopment. We want to work as partners with state lawmakers to revive this tool in an accountable manner.”

Background: In July 2011, California Redevelopment Agency v. Matosantos was filed in the California Supreme Court by CRA, the League of California Cities, and the cities of San Jose and Union City, challenging the constitutionality of ABX1 26 and ABX1 27. These two bills were passed as part of the 2011-12 state budget and work together to eliminate redevelopment agencies (ABX1 26)  unless they agree to pay the state $1.7 billion in this fiscal year and $400 million to schools and special districts in subsequent budget years (ABX1 27). The CRA/League legal team argued these two budget bills directly violated Proposition 1A (2004), Proposition 22, and Article 16 Section 16 of the California Constitution.