Cities struggle with ending redevelopment agencies REDEVELOPMENT

Families walk over the bridge that crosses Mission Creek, Sunday, January 15, 2012, where new condo buildings have sprung up in the past few years. Families walk over the bridge that crosses Mission Creek, Sunday, January 15, 2012, where new condo buildings have sprung up in the past few years. Photo: Lacy Atkins, The Chronicle Photo: Lacy Atkins, The Chronicle Image 1 of / 4 Caption Close Cities struggle with ending redevelopment agencies 1 / 4 Back to Gallery

Thousands of city workers empty their desks. Offices go dark. Rows of deteriorated buildings may sit untouched.

This is how California's redevelopment program dies.

Six decades ago, redevelopment agencies were formed across the state to revitalize blighted neighborhoods and create low-income housing. By Feb. 1, as a new state law requires, all 400 of them will be gone.

Killing off a multibillion-dollar program is a messy, unprecedented process. The way it unfolds depends on the city - and the day.

On Friday, lawmakers introduced legislation to preserve redevelopment agencies until April 15. Assuming the original deadline stands, however, officials will spend the next two weeks scrambling to close and hand off their final projects.

"These are very difficult times for people," said Tiffany Bohee, San Francisco Redevelopment Agency's interim executive director.

Last summer, the Legislature and Gov. Jerry Brown agreed to ax redevelopment to help solve the state's multibillion-dollar budget deficit. The agencies annually received about $5 billion, which Brown said should go to education and public safety.

Cities and counties sued. But in December, the California Supreme Court sided with the state and struck down a compromise law that would have allowed the agencies to exist in smaller form.

Redevelopment agencies grew out of federal urban renewal programs and formed in California in 1945. They combat urban blight by purchasing property, renovating commercial areas and developing affordable housing, among other actions. The intent is to encourage the development to include private investors.

When the property values of those areas rise, a portion of the increase in property taxes goes to the agencies. Critics contend redevelopment has strayed from its original mandate, putting taxpayers on the hook for costly projects without oversight.

Impacts will vary

In cities where those funds paid for more than fixing neighborhoods, the pain will be especially acute.

Oakland used nearly $30 million of its redevelopment funds to support salaries in almost a dozen departments, including the City Council, the mayor's office and public works. Without the money, up to 200 city workers will lose their jobs.

In San Francisco, the future of the city's roughly 100 redevelopment workers is uncertain.

Under a proposal pending before the Board of Supervisors, the agency would transfer its debts and obligations to the city. A transition period means workers would stay until the end of March.

"We don't know what staffing level we are going to require to continue the projects, programs and services currently provided by the redevelopment agency," said Christine Falvey, San Francisco Mayor Ed Lee's spokeswoman.

At least 1,500 jobs are at risk statewide, according to the California Redevelopment Association.

"It's demoralizing because people who have, for years of their lives, committed themselves to improving communities are seeing their efforts stop short for not very good reasons," said John Shirey, Sacramento's city manager and former executive director of the California Redevelopment Association.

Some cities are shuffling staff into departments such as planning, economic development and administration, said Jim Kennedy, the lobbying group's interim executive director.

He added, "If all the institutional capacity walks out the door and moves on to other career tracks, it's very difficult to achieve anything in the short term, in the next year or two, exactly when California needs it."

A transformation tool

Over the past two decades, redevelopment money has helped Emeryville transform from an industrial wasteland into a thriving retail hub with stars like Best Buy and Ikea along Bay Street.

But as those funds vanish, millions of dollars' worth of planned construction will probably never materialize.

"It's a really huge impact on what Emeryville's done, and what it can do," said Helen Bean, the city's economic development and housing director. Emeryville's redevelopment budget this year was less than $30 million.

At stake, for instance, is a transit center planned for 59th and Horton streets, near the city's Amtrak station. Of its $60 million price tag, $4 million was going to come from redevelopment, Bean said.

Other projects at risk include the planned Emeryville Center for the Arts, whose $12 million budget relied on $8 million in redevelopment money. Then there is the South Bayfront Pedestrian-Bicycle Bridge, which would arch over the railroad tracks near the Bay Street mall.

It would have cost $13 million in redevelopment money, and the city had already spent more than $1 million designing it. But now it won't be built, Bean said.

"It's a key infrastructure project that will just not go forward," she said.

While Emeryville expects to abandon some of its long-term plans, cities can continue with projects that are significantly under way. In San Francisco, for instance, Mission Bay, Hunters Point Shipyard and parts of the Transbay Terminal project can keep going. Under a proposal before the Board of Supervisors, the city would take over low-income housing, local hiring efforts and neighborhood revitalization programs.

But other projects that haven't made substantial progress, such as the planned police substation on Sixth and Mission streets, are in limbo.

State Sen. Alex Padilla's (D-San Fernando Valley) bill to give redevelopment agencies an extra 2 1/2 months would, in his words, "address serious issues resulting from the recent state court's ruling."

Yet even if agencies win the delay, they acknowledge they've already lost.

"There's so much more to do," Bean said.