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Alameda Loses Redevelopment Agency

By Erica Madison

Just three days before the New Year, the California Supreme Court handed down a ruling that dissolved Alameda City’s Community Improvement Commission as well as 400 other redevelopment agencies in California.

“The impact is not good for Alameda, but some other cities will suffer greatly as a result of that decision,” City Manager John Russo said at a special City Council meeting earlier this month. “We are fortunate that Alameda never took the same path as our neighboring cities in regards to honeycombing money from redevelopment.”

The California Redevelopment Agency is a nonprofit organization that represents redevelopment agencies in California and for all of 2011 this organization has been fighting the dissolution act AB1X26.

The Dissolution Act forces Alameda to shutdown the Community Improvement Commission by February 1, 2012. All projects that the CIC is overseeing will cease. A payment schedule for projects that are already underway must be submitted to the Alameda County Auditor Controller office by March 1, 2012.

The Dissolution Act also requires the creation of two successor agencies. The Alameda City Council will take over for the CIC and guarantee the completion of already promised CIC activities. The second successor agency will be assumed by the Alameda Housing Authority.

To deal with abrupt closing of these agencies the Supreme Court has ordered the creation of a trust fund, which will be administered by the County Auditor Controller. The successor agency will be limited to the amount of money the county auditor puts in the trust fund. The good news is Alameda City has no obligation to pay for redevelopment projects if there is no money in the trust fund.

The bad news is that until the trust fund is established Alameda will still have to pay for CIC projects.

“We will be spending money ahead of a guarantee,” Mayor Gilmore said at a special City Council meeting earlier this month.

Alameda can’t expect any returns from the County Auditor Controller until after July 1, 2011.

The California Redevelopment Association is trying to postpone the dissolution of the 400 redevelopment agencies, but Alameda City Council members aren’t optimistic about this postponement.

“We’re going to be dependent on private developers for funding. We’ve lost our ability to generate revenue through redevelopment. Our city has to find more ways to be marketable, to compete fiercely,”  Councilmember Lena Tam said.

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