Clawback, Part II (Updated)
First we had Santa Clara County pulling $30 million in RDA funds back from the 49ers stadium project/Authority. Now we’ve got the flipside, as State Controller John Chiang has ruled that the County went too far in holding back $86.5 million in funds due to the City of San Jose.
The money came from collected property taxes and proceeds from the sale of numerous City-held properties. The money’s needed to service outstanding debt, which had already been downgraded to junk status by Fitch because of the holdup. The bond ratings should be restored to some degree, but the damage is done. The now-defunct SJRA’s successor agency oversight board is having its regular meeting on Thursday. I may attend it.
It’s a bit early to say what kind of effect this will have on either Cisco Field, 49ers Stadium, and City of Oakland (HJKCC) since it’s just one of a series of rulings that will be made in the coming months. A follow-on editorial from the Merc is pushing for the County to surrender the funds so that the bond payments can be made by the end of the month. In addition, a budget trailer bill (AB 1484) in the Legislature is trying to better define the limit and range of the powers of oversight boards and successor agencies.
Update 6/27 3:32 PM – AB 1484 passed and is headed to the governor’s desk. The big takeaway is that the carveout for affordable housing projects is now set. Until now, affordable housing was as much on the chopping block as any other types of redevelopment work.