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One of the Nicest Hotels in the World, Thanks to California Redevelopment!

Published on: January 14, 2012

The Hyatt Regency Huntington Beach Resort and Spa was recently declared one of the 500 World’s Best Hotels by Travel + Leisure magazine.  The 500+ room luxury property with conference facilities and a beach location was a redevelopment project built  in partnership with the City of Huntington Beach and Robert Mayer Corp. It replaced an older hotel, nine hole Sandpiper Golf Course and mobile home park. Next week Council Members will discuss selling off the city’s portion of interest in redevelopment projects such as the Hyatt hotel, much as every city with a redevelopment agency has been given a deadline to accomplish.

On December 29, 2011 the unthinkable happened in the minds of city officials and redevelopment agencies throughout California. The California Supreme Court ruled on a case that now allows state government to put an end to over 400 redevelopment agencies.

We’ve been following the story with much interest. Though many citizens hardly know about it, they assuredly have experienced redevelopment first-hand. New malls, sports parks, luxury hotels and more mundane things like palm trees in a center divider are often made possible with a law created by the California legislature over 50 years ago to stimulate local economies.

There have been countless success stories and then some abuses of the law. One of the less popular by-products of redevelopment gives cities the ability to declare an area “blighted” and remove citizens from their properties, offering them “fair market value”, to make way for something new. Occasionally “something new” failed or has required infusion of cash to keep it functioning.

In the thousands of news stories that have been written since the court decision was announced on Dec. 29, the lines seem to be drawn. Some of the biggest cities say their redevelopment agencies are too big to handle, and have opted to let a third party dismantle them such as the city of Los Angeles where close to 200 people work in the Redevelopment department. San Jose has already shut down its redevelopment department and let staff go, emptying out a floor in city hall.  Other cities such as Oakland have so many of the city jobs’ salaries intertwined with redevelopment that they’re having a hard time figuring out how to fix it.

In recent articles written, editorials are over 90% in favor of disbanding redevelopment agenices in California. Comments from readers chime in about the abuses of laws that have allowed cities to build frivilous projects, hand out favors to builders, and waste tax payer dollars. The public who cares and speaks out mostly wants redevelopment agencies to end.

Then there’s the city side of the equation. Cities say that redevelopment is a necessary tool to attract builders and projects that might not otherwise be feasible.  The bonds created without citizen votes and the pay-back schedules in which cities collect taxes from redevelopment projects is a little challenging to understand or explain. In a nutshell, if you are the public citizenry or state, you’d say that redevelopment agencies  divert taxes that traditionally would fund schools and other necessities. If you are a city with a redevelopment agency, you’ll say that the money is well spent and much needed to fund projects that help cities prosper and grow, thus adding dollars to city coffers.

The Supreme Court ruling on a lawsuit filed by the California Redevelopment Association arguing that the governor couldn’t shut redevelopment agencies down and make them pay to operate in the future, is a legislative mess that’s being worked out by the cities with redevelopment agencies throughout California. And for those of us who live in cities with such an agency, we may see some of the city’s planned projects cancelled or scaled back in the future.

California is billions of dollars in debt and Governor Brown wants the taxpayers to vote for a tax increase in the fall. If they don’t, he says the state will be forced to make more cuts that have included disbanding redevelopment agencies to save over $1 billion and reducing the operating budget of California State Parks.

 

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