NORCO: Fate of redevelopment projects unclear
11:18 PM PDT on Saturday, June 25, 2011
Bulldozers are still dumping dirt and grading land as Norco moves forward with projects that could be in jeopardy if the state pushes through plans to dissolve redevelopment agencies.
The city's largest development, the 122-acre Silverlakes equestrian sports park, is insulated from that threat because its funding was privately secured.
But five other city projects funded partially or fully with redevelopment money could be affected.
"I don't know how these projects would be impacted, whether they would go on or not go on," said Norco Finance Director Andy Okoro. "No one knows the particulars or how this dissolution is going to be implemented by the state."
State lawmakers are looking to rein in redevelopment agencies. Gov. Jerry Brown proposed abolishing them earlier this year to help balance the state budget and find money for schools.
This week, city redevelopment agencies were in limbo as state legislators passed two bills that would eliminate some 400 redevelopment agencies but allow for the creation of new agencies if cities pay their share of the $1.7 billion to bolster school funding. The bills are awaiting Brown's signature.
Norco's first payment to the state would be due next fiscal year for roughly $3.2 million.
Redevelopment agencies were created in California in the 1950s to fight urban blight. The agencies often finance improvements through bonds eventually repaid using the increased property taxes that result from the improvements.
Redevelopment supporters say the programs have built libraries and parks and created thousands of jobs in many cities. The program allows local officials to spur development by offering incentives such as helping finance construction for affordable housing.
But critics say redevelopment is a way for cities to basically bankroll commercial and residential developers. Some have used it for a luxury golf resort and others, including Norco, use it to pay portions of city salaries, according to a report by state Controller John Chiang's office.
Similar to other cities, Norco's roughly $18 million redevelopment agency could suffer if the bills become law. It recently cut more than $3 million from its budget to balance its 2011-12 budget and doesn't know how it would come up with $3.2 million in cash for the state to keep the agency running.
"I don't see funding elsewhere in the city to make such payments," Okoro said in an email, adding that there are many unknowns about how the law would be implemented.
It's also unknown whether redevelopment money for current and planned projects would be available.
City officials are thankful that construction that began this month in north Norco related to Silverlakes won't be impacted. A $700,000 dike is being built north of the Santa Ana River between Hamner Avenue and Highway 15 to protect the equestrian park.
The Riverside County Flood Control and Water Conservation District is paying for the dike because it has facilities in the area damaged from the December storms.
The city paid about $10,000 for design and surveying, said Public Works Director Bill Thompson. The dike is expected to be complete within two months, with the actual construction for Silverlakes beginning shortly after, he said.
Redevelopment projects that could be at risk are the widening of Hamner Avenue, Second Street improvements, an expansion of the animal shelter, lights at the Wayne Makin/Shearer Sports Complex and improvements to George Ingalls Equestrian Event Center.
The Hamner widening is scheduled to begin Aug. 1 and involves $1.6 million in redevelopment money. About $600,000 in redevelopment money is being used to realign Second Street and should be completed within the next month. And a construction contract awarded this month to improve conditions at the animal shelter involves redevelopment money.
Salaries of some city employees and the city housing program could also be affected.
Norco's housing manager is paid with redevelopment money and several other employees, including Okoro, are partially paid with redevelopment agency funds.
The bulk of redevelopment money, however, is used to pay debt for bonds that were issued to fund projects, something Okoro hopes the city would be absolved from paying if the agency is dissolved.
For now, there's not much the city can do besides move forward, and wait and see, Okoro said.
Reach Leslie Parrilla at 951-368-9644 or lparrilla@PE.com