Santa Monica Lookout
B e s t   l o c a l   s o u r c e   f o r   n e w s   a n d   i n f o r m a t i o n

Santa Monica Could Recover Some Redevelopment Funds, Local Assembly Member Says

Santa Monica Real Estate Company, Roque and Mark

Pacific Park, Santa Monica Pier

Harding Larmore Kutcher & Kozal, LLP  law firm
Harding, Larmore
Kutcher & Kozal, LLP


Convention and Visitors Bureau Santa Monica

By Niki Cervantes
Staff Writer

September 15, 2015 -- An agreement between the California Legislature and the state Department of Finance could mean millions of dollars will be released to cities like Santa Monica that lost huge sums after the state abolished local redevelopment agencies, a local assembly member said.

Santa Monica used nearly $20 million a year in redevelopment money to fund affordable housing and has been scrambling to make up for the shortfall ever since its agency was dissolved in 2011.

Assembly member Richard Bloom (D-Santa Monica) said the compromise reached between legislators and the finance department on Friday helps resolve how to use millions of dollars lost by redevelopment during the recent State budget crisis.

Redevelopment agencies lost an annual $1.7 billion in funds with the dissolution.

Many of those agencies, however, had already legally issued bonds for local projects and were forced to make debt payments “even though they cannot reap the economic benefits of projects stalled by the dissolution,” said Bloom, who served as Santa Monica mayor before winning statewide office.

Statewide, about $715 million in 2011 redevelopment bond proceeds had remained untouched, the assembly member said.

Prior to the new compromise, “cities were expected to make debt payments for a decade, costing them nearly $1 billion while not completing a single redevelopment project with these bond proceeds,” said Bloom, who was involved in the negotiations.

He said the agreement will impact a variety of cities, including Santa Monica and West Hollywood, which are both in the 50th Assembly District he represents.

Representatives from Bloom’s office, as well as  City of Santa Monica officials, said they did not know how much funding might be due to the beach city.

“At this point, we don’t know what the impact of the legislation could potentially be for Santa Monica,” said Gigi Decavalles-Hughes, the city’s director of finance.

The City of West Hollywood is expected to receive about $15 million in redevelopment agency money, according to WEHOville, a news site that focuses on West Hollywood.

In general, the agreement will resolve issues with the definitions of redevelopment loans and the interest rates that apply to them, Bloom said.

In a news release, his office said Senate Bill 107 was passed by the Assembly with a 41-31 vote and by the Senate with a 24-15 vote on Friday. The legislation was sent to Gov. Jerry Brown, who has a month to take action, said Meredith McNamee, Bloom’s legislative assistant and communications deputy.

"The compromise reached today will have tremendous impacts on California's cities,” Bloom said. “Releasing a substantial portion of the bond proceeds for their intended projects, including all bond proceeds for affordable housing, will generate thousands of jobs and create hundreds of millions of dollars in statewide economic activity, as well as provide millions of dollars in new state and local tax revenues.

“My experiences as Mayor and Councilmember of Santa Monica gave me first-hand experience of the importance of redevelopment projects, including the construction of much needed affordable housing.”

Bloom proposed legislation last year that tried to return redevelopment funds to cities, but Brown vetoed it and asked that the Legislature and the state finance department work together to resolve differences.

Affordable housing in Santa Monica has dropped dramatically since its redevelopment agency was abolished by the state.

The city was receiving about $17 million for affordable housing from its redevelopment agency.  Its new half-billion dollar budget for the 2015-2016 fiscal year includes just $1.2 million for that purpose.

According to a report filed by the city Housing and Economic Development Department, a total of 458 residences were completed in the 2013-2014 fiscal year, of which 257 -- or 56 percent -- were considered affordable.

That far exceeded the requirement, approved by voters in 1990, that 30 percent of multi-family housing created on an annual basis be affordable to moderate-income residents.

That is no longer the case. The report found that of a total of 366 multi-family units still being constructed, only 71 are earmarked for affordable housing, or 19 percent, the report said.

Another 13 units were only in the planning stages and none included affordable housing, according to the report.

Providing affordable housing in one of the nation’s most expensive cities is a top priority for the City Council. So far it has discussed raising money through a variety of tax options and bonds, as well as shifting the City’s spending priorities and possibly putting the issue to a public vote.

There are approximately 23,000 households in Santa Monica earning $75,000 or less per year, which is the amount that would qualify a four-person household as low- or moderate-income. But there are only 16,000 apartment units with a rent amount deemed affordable, City officials said.


Back to Lookout News copyrightCopyright 1999-2015 surfsantamonica.com. All Rights Reserved. EMAIL Disclosures