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HomeMy WebLinkAbout2011-01-25 - AGENDA REPORTS - OPPOSE ELIMINATION OF RDA (2)Agenda Item: 11 CITY OF SANTA CLARITA AGENDA REPORT CONSENT CALENDAR City Manager Approval: Item to be presented by: Mayor Marsha DATE: January 25, 2011 SUBJECT: OPPOSITION TO THE ELIMINATION OF REDEVELOPMENT AGENCIES AND ENTERPRISE ZONES DEPARTMENT: City Manager's Office RECOMMENDED ACTION City Council oppose Governor Brown's proposal to eliminate redevelopment agencies and enterprise zones, and direct staff to transmit position to the Governor's office, appropriate members of the California Legislature, the League of California Cities, and the California Redevelopment Association. BACKGROUND On January 10, 20111, Governor Jerry Brown released his FY 2011-12 state budget proposal and, as expected, the state's financial situation continues to be bleak with a $25.4 billion deficit. The Governor's proposal includes the elimination of redevelopment agencies and enterprise zones. Redevelopment, which has been around since the 1950's, is a tool for improving communities, spurring job growth, and is the most significant provider of infrastructure, urban development and affordable housing in the state. Enterprise zones are one of the few economic development tools that cities and counties have to bring jobs to depressed areas. According to the California Redevelopment Association, the elimination of redevelopment agencies will also have a direct and lasting negative impact on the California economy and job creation: • Redevelopment activities support an average of 304,000 full- and part-time private sector jobs in a typical year, including 170,600 construction jobs • Redevelopment agencies contribute over $40 billion annually to California's economy in the generation of goods and services • Redevelopment construction activities generate $2 billion in state and local taxes in a typical year. GIrpG10d�D The Santa Clarita Redevelopment Agency exists to eliminate physical and economic blight and provide for affordable housing. For example, the Old Town Newhall redevelopment area is being transformed into a vibrant area with new businesses and community facilities: The Redevelopment Agency has also awarded grants to small businesses located within the redevelopment area to assist with their financial and business management needs. In the next five years, the Redevelopment Agency will look to build upon this success, making the City's redevelopment area a regional destination by stimulating economic growth with new and diverse employment opportunities, creating unique shopping areas that will attract Santa Clarita residents and the residents of surrounding areas, and providing diverse housing opportunities for all Santa Clarita families to enjoy. The City's extremely successful Enterprise Zone has been embraced by the City's business community. Since its inception in 2007, the City's Enterprise Zone has facilitated the creation of 440 new jobs and the retention of over 2,500 more. In December 2010, the City, in partnership with Los Angeles County, was awarded a larger enterprise zone, one of only two such awards made by the state. This new zone, known as the Santa Clarita Valley Enterprise Zone, will serve 7,675 businesses, including large employers such as Six Flags Magic Mountain and the newly proposed Disney ABC Studios at The Ranch. These proposals will hurt the state's under served and distressed cities and communities and will cost California thousands of jobs. The plan to eliminate redevelopment agencies and enterprise zones will hamper efforts to acquire blighted land for infill development and limit opportunities for job creation in under served communities. Furthermore, the constitutionality of the elimination of redevelopment agencies is in question Last November, California voters approved Proposition 22, a measure designed to protect various local revenues - including redevelopment - from state raids. As such, the League of California Cities is reviewing the constitutionality of the proposal under Proposition 22, and other constitutional provisions. ALTERNATIVE ACTIONS 1. Support Governor Brown's proposal to eliminate redevelopment agencies and enterprise zones. 2. Other action as determined by Council. FISCAL IMPACT Adoption of the recommended action will not require additional financial resources beyond those already contained in the Adopted FY 10-11 Annual Operating Budget.