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A Moment of Relief—and Suspense—for Redevelopment

The California Supreme Court will allow redevelopment agencies to continue operations until it decides whether the state’s legislation to dissolve agencies is unconstitutional.

Union City’s Community Redevelopment Manager Mark Evanoff let out a small sigh of relief yesterday. It was a rare occurrence during these several turbulent months that his agency, and the fate of Union City’s future, lay in limbo.

On Thursday, the California Supreme Court issued a temporary stay to allow redevelopment agencies to continue operations until it decides whether two bills approved by state legislators in June are constitutional. A final decision on the matter will be made by Jan. 15, 2012.

“I’m pleased the Supreme Court has recognized this is an important issue,” Evanoff said. “I would hope that the Supreme Court would agree that the legislation is indeed unconstitutional and allow redevelopment to continue to improve the community.”

In July, the city of Union City, along with the city of San Jose, the League of California Cities and the California Redevelopment Association, , which require cities to either pay large sums to the state to continue redevelopment, or shut down the agencies entirely by Oct. 1.

While redevelopment funds would be diverted largely to schools and special districts, redevelopment supporters argue that the legislation would drastically impact community revitalization and job creation.

Many projects, including Union Landing, the new Intermodal Station District and several affordable housing communities, were made possible through the support of the local redevelopment agency.

If the state legislation is not overturned, the city of Union City will “opt-in” and make payments to the state to continue the program until redevelopment funds run out, which may be two or three years, Evanoff said.

“If the original assessment is enforced, we’ll be out of funds in two years,” Evanoff said. “If we can lower the assessment, we can make the third-year funding.”

Currently, the state is asking Union City to pay an estimated $7.6 million this year and $1.8 million each future year the agency continues.

The city filed an appeal Friday to reduce the opt-in payment down to a one-time $5 million dollar payment and $1 million each year after.

“We’re disproportionate in impact,” he said. “We’re paying more than Fremont and we’re one-third the size.”

The redevelopment payment plan is based on 2008 figures. However, Evanoff said, the city has issued two sets of bonds since then and also contributes 35 percent of its increment to Alameda County, which is approximately $5.5 million.

“I don’t know where the state thinks we’re stashing the money,” Evanoff said.

Once the funds are depleted, the city would either take over the payment or shut down the agency, at which point it will be faced with making cuts to staff.

Currently, 11 full-time equivalent staff positions are funded through redevelopment, according to Evanoff.

As the lawsuit continues, Evanoff said the agency would continue to seek developers for the remainder of the Station District project. Contracts for a public plaza and pedestrian promenade were awarded last month and construction meetings will begin next week, Evanoff said.

Contracts for “Phase 2” of the project, which includes creating an east entrance to the BART station, will be awarded by the end of the year.

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