SAN FRANCISCO — Redevelopment agencies in California will legally vanish Wednesday, with a bill to extend that deadline declared dead by a top lawmaker.
The measure that would extend the Wednesday termination deadline to April 15 appears to be dead in the water after both the Senate majority leader and the governor said an extension is unlikely.
Senate President pro tem Darrell Steinberg, D-Sacramento, told reporters Friday that it’s unlikely the extension bill will pass.
Gov. Jerry Brown, a Democrat, has said he is against an extension.
Without an extension, redevelopment advocates will likely turn their focus to cleaning up the legislation that will extinguish the agencies.
Cities and counties have been struggling to implement the new measure since the state Supreme Court in December upheld a law terminating the redevelopment agencies while at the same time striking down a companion piece of legislation that would have given the RDAs the opportunity to survive if they gave up revenue to the state.
The high court’s decision started the process of unwinding the RDAs and transferring their obligations, including bonds, to new “successor agencies” under a complicated process.
The process involves oversight and review of redevelopment agency finances by a local oversight board, county auditor-controllers, the California state controller’s office and the state Department of Finance.
Steinberg has proposed legislation that would carve out the tax money collected by redevelopment agencies for low and moderate-income housing for municipalities as well as provide a better definition of obligations, such as intergovernmental loans.
Steinberg’s SB 654 needs to pass in the Senate by the Tuesday deadline for bills orignially introduced last year.
As an urgency measure, the Senate president would need a two-thirds majority to pass.
RDAs have been required to allocate 20% of the tax increment revenue they collect for low and moderate-income housing.
The intent of Steinberg’s bill is to keep the low- and moderate-income housing funds in the hands of the communities whose redevelopment agencies collected them, in order to continue using the funds for housing.
Steinberg’s measure should also help qualify the obligations of RDAs, which are entwined by loans and transfers with the cities and counties that typically run them.
The new redevelopment law says the validity of bonds or other obligations issued or entered into after Jan. 1, 2011, could be reviewed for up to two years after the action.
Experts have said any obligations — such as projects, land deals or intergovernmental loans — approved in 2011 by the agencies will likely be up in the air until the approval process outlined in the bill filters them out.
Bonds that have already been sold should be safe.
Rating agencies recently downgraded bonds issued by California RDAs because of various concerns about bond payments that stem from the implementation of the new law.
According to Interactive Data, 378 redevelopment agencies have $19.8 billion of tax-allocation bonds outstanding. The agencies likely have significantly higher total debt outstanding.
By the end of June when the legislation passed, the RDAs had already sold $1.1 billion of new-money tax-allocation bonds, the highest total in four years despite a generally down year in the municipal primary market.
