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Redevelopment Diverted $3.78 Million Last Year From City of Alameda’s General Fund

Dear Editor;

When Ms. Helen Sause, in the local newspaper, critiques Barbara Thomas’s letter stating that “the citizens of Alameda do not pay these bonds back” she fails to point out that in addition to the tax increments used to pay off the bonds the city itself absorbs a loss because the city must continue to absorb the costs of services; fire police, schools etc.

We estimate that in the fiscal year 2007-2008, “redevelopment” diverted $3.78 million in property taxes away from the general fund. That’s why the City had to pass Measure P last year – to make up for property tax revenue destined for the general fund but stolen by redevelopment. Redevelopment incrementally eats into revenue destined for the general fund and ultimately necessitates more parcel taxes to make up the loss.

Why do you think the state of California recently required the redevelopment projects throughout the state to cough up an additional 7.7% for the state educational budget? Ask the Legislation Analyst Office why they recommended this. They know it’s because redevelopment steals money from city services and schools. There has been a great deal of research on the issue of redevelopment on public services. Perhaps the most impressive was done by Michael Dardia (1998) of the Pacific Research Institute. He found in doing his research: that tax increments to be a net loss, and do NOT pay for themselves with increased development. In 2000, a bi-partisan Commission on Local Governance for the 21st Century, chaired by the San Diego Mayor Susan Golding, released it report, Growth Within Bounds. Findings indicated the negative impact of tax increment financing, noting that “this financing tool has steadily eaten into local property tax allocations that could have otherwise been used for general governmental services, such as police and fire protection and parks. The folks in New Mexico know this too – they are fighting a $408 million state redevelopment bailout of SunCal for their West Mesa project in Albuquerque.

Folks who want to build 4500 homes on the point continue to ignore the realities of traffic congestion, contamination and climate change. This is why we believe that the best solution is a public trust built on adaptive reuse of existing buildings; preserving existing businesses and light industry; and the creation of partnerships between industry and educational institutions. The Point belongs to the public for the public and not for the profit of developers.

– Gretchen Lipow, Alameda

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