Brown to Redevelopment: Your days are numbered
Governor Brown just finished his press conference, where he explained his budget plans. Brown is pushing for $12.5 Billion in spending cuts, and he is asking the legislature (and the voters) to extend temporary income, sales, and car taxes that are set to expire this year. As for the redevelopment golden goose, Brown said that existing (already bonded) projects are safe. New projects, on the other hand, are in trouble. Brown wants to “phase out” redevelopment agencies and start taking back $1.7 Billion in tax increment annually. What it comes down to is this: If you don’t have your project started and well underway in the next 12-18 months, you are screwed. There continues to be some debate as to how the governor could eliminate RDA’s, with the agencies enshrined in Article 16 in the Constitution and recently passed Prop 22 acting as protection. The governor seems to be saying, “If we get rid of RDA’s, there are no more protections.” Yow. Okay, who would this impact? Let’s put together a list:
- San Jose Diridon Ballpark – While the City is speeding up land acquisition, what about Autumn Parkway and other mitigations? Will the funds be in place for the rest of the project, or will it get kicked down the road?
- Oakland Victory Court Ballpark – Oakland already had to deal with a tight schedule based on a 2015 Opening Day. Now, Oakland will have to get its bonds raised and land in place right around the time an EIR is certified, or even before certification. Expect for Oakland to push MLB harder to decide in its favor, even without anything significant in place.
- 49ers Stadium in Santa Clara – The quasi-public stadium authority would have to get its loans and/or bonds in place in the next 18 months as well.
- New Raiders Stadium at the Coliseum – A new stadium is practically a nonstarter given the funding questions. Expect the Raiders to look south sooner rather than later.
- Downtown Los Angeles NFL Stadium – The now $1.5 Billion stadium (+$500 million in the last two weeks) would require $350 million in bonds, which won’t be available if RDA’s go away.
- City of Industry NFL Stadium – Ed Roski’s plan involves his own land, but much of the stadium cost would be funded by tax increment on the land improvements, thanks to much of the city being one large redevelopment zone. Uncertainty regarding RDAs makes the prospects for building infrastructure for the stadium and ancillary development, murky at best.
- Sacramento Kings Arena – As Kevin Johnson’s arena task force continues to talk things out, time is running out, especially for an arena at the long dormant Railyards.
- San Francisco Arena – Land south of AT&T Park could serve as the site for a new arena. Controlled by the Port and with development rights given to the Giants, it’s likely that any dev plan there will require at least the same kind of public outlay that made the ballpark deal work. Proponents would have to find another source for that funding.
The message is abundantly clear: If you want to get something built, get a move on. (BTW, take a look at the counter on the right today. Eerie.)