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Quan voices support for lawsuit to keep redevelopment agencies alive

on July 21, 2011

The Oakland Coliseum Transit Village has been in the planning stage for years. The 2005 plans call for hundreds of apartments—both market-rate and low-income—as well as stores and restaurants, to be built on what is now the Coliseum BART parking lot.

In the past year, the city’s redevelopment agency has purchased parcels of land in the area, including a run-down abandoned building on the Coliseum side of the street it planned to tear down. But unless the city can come up with enough money to join the state’s new redevelopment program, it will be standing a while longer.

“We can’t tear down that building unless we pay ransom to the state of California because it’s now on redevelopment property,” Oakland Mayor Jean Quan said, as she motioned to the building from the BART parking lot.

The transit village is among a number of Oakland Redevelopment Agency projects that may now never make it out of the planning stages. At the end of June, California Governor Jerry Brown signed a bill that would dissolve the state’s more than 400 redevelopment agencies, and charge them a fee to join a new program.

Redevelopment agencies are separate legal entities from cities that are intended to help revitalize deteriorated neighborhoods by bringing in new businesses and affordable housing. According to the California Redevelopment Association, the agencies are the second-largest funder in the state of affordable housing after the federal government.

Critics, however, say the agencies are no more than slush funds for cities to use for whatever projects they want, including golf courses and restaurants.

Quan and a group of officials from other Bay Area cities, including Union City Mayor Mark Davis and Emeryville Mayor Nora Davis, gathered for a press conference Wednesday afternoon to voice their support for a lawsuit by the League of California Cities and the California Redevelopment Association that seeks to overturn the bill signed by Governor Brown. Union City and San Jose are the plaintiffs in the lawsuit, and Oakland—along with Modesto, West Sacramento and Guadalupe—filed declarations in support of the lawsuit. The lawsuit attests that State Proposition 22, passed in 2010, protects redevelopment funds.

For Oakland, the cost of joining the state’s new program would be $40 million in the fall, and $10 million a year after that, money Quan said the city simply cannot afford. The cost would eliminate the reserves of the redevelopment department—which has a $70 million annual budget—and half the money slated to be used for projects in future years. Quan said this would be unsustainable for a city that had to make severe cuts to get out of a $58 million budget gap earlier this month.

“In my city, we’ve cut more than 200 jobs, cut many services, and then we have the State of California with its hand out asking for the remaining money,” Quan said.

Quan gave examples of projects in danger of being shelved if the city’s redevelopment agency folds: a $10 million renovation of the Army base at Jack London Square; a $5 million West Oakland teen center; one hundred affordable units in the old Alice Arts Center building downtown; and a property across the street from the West Oakland BART station the city purchased after it went into foreclosure.

“We can’t walk away from this,” Quan said. “It’s undeniable.”



  1. Nate on July 24, 2011 at 12:01 am

    Quan should post a list of projects the redevelopment agency has funded over the past 10 years to make her case that it’s essential. I am suspicious of Oakland leadership and suspect there may be some questionable projects.

    • Leonard Raphael on July 24, 2011 at 10:14 pm

      What our Mayor really means is that our City’s fiscal house of cards will collapse if those cities substantially lose their lawsuit.

      Over the last decade, its been less and less about redevelopment and construction of affordable housing, and more and more about shifting City general fund costs to the Redevelopment Agency.

      Yes it would be nice if the City provided an easy to understand list of its projects and “investments” including the many many loans that were written off or are unlikely to ever get paid. Those include ones to policitically connected bakeries and real estate developers.

      But for that list to be of any use, we’d need to know not just how much the RDA spent on each project, but how much a private unsubsidized developer would have spent.

      We also need something we’ll never get: an estimate of what the real estate valuation increases would have been if there had been no RDA investment. That can be estimated using.

      Lastly, we need to know how much was paid to to the City’s general fund for “overhead” and “direct” employee service costs, with an independent opinion on whether those services were truly helping the RDA or merely helping pay for expenses that were properly General Fund items.

      Unlike our elected officials who have considered the RDA money to be mostly a defacto part of the General Fund ie. “our money”, stretching the definition of Redevelopment to include say police services in RDA areas made Oakland “cutting edge” in the RDA community.

      In last several years, and the current year, the only way the elected officials “balanced” their budget was to sell General Fund real estate to the RDA at inflated values worthy of the most abusive sub prime mortgage years.

      The effect of such creative cutting edge use of RDA money was to take money away from the districts it was suppose to serve.

      Btw, how much has the city “appropriated” for the lawsuit? Don’t suppose officials will tell us what legal counsel said their chance of prevailing?

      -len raphael, cpa

  2. […] Ceaser said they also made an offer was made on the old Ligure Club building “eight or nine months ago” that was declined, though they’re still in negotiations. However, it’s not in one of the city’s redevelopment zones, meaning there would be less money and support available from the city, though the redevelopment agency’s future is also in doubt. […]

  3. […] 2011, Mayor Quan has repeatedly warned of the dire consequences of having to make the payments required by the now voided   AB27X1.  But the recently released […]

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