Madrid on Rulings: California to Become ‘Worse Than a Third World Country’

Updated at 5:35 p.m. Thursday

Mayor Art Madrid, angry at Sacramento for the “monster it created,” says California would become “worse than a Third World country” in the wake of state Supreme Court actions killing redevelopment agencies.

La Mesa can finish what it started in its three redevelopment project areas, but the city’s Redevelopment Agency is effectively history as a result of actions made public Thursday, said City Manager Dave Witt.

Projects at risk from the ruling include ones on Alvarado Road near the 70th Street trolley station, the undergrounding of utilities and various storm drain improvements, according to a previous report.

Witt says he was “a bit surprised” by the court’s dual rulings—one that lets the state abolish 400 such agencies and a second that prohibits cities from keeping agencies alive by sending property tax revenues back to the state—so-called “pay to play.”

The City Council, acting as the La Mesa Community Redevelopment Agency, approved such payments Aug. 25. (See attached.)

But in a phone interview Thursday, Madrid again used the word “extortion” to describe such payments.

“What I’m hearing now is that the elimination of redevelopment agencies was not really their intent,” Madrid said of the state Legislature.

“My sense is the Legislature is now really concerned about this monster they’ve created—and they’re going to back off,” he said. “They’re going to say this [pair of rulings] was an unintended consequence.”

Madrid said it is difficult to assess the consequences for La Mesa, but: “California is going to be a Third World country—worse than a Third World country” as a result of state actions.

He conceded that some cities have “abused the intent” of local redevelopment, but he said, “We will do whatever we can to save the redevelopment process.”

Madrid predicted that lawmakers will return to Sacramento and “recreate a more restrictive redevelopment concept.”

Among other things, redevelopment helped build the Gateway Center on Fletcher Parkway near Baltimore Drive (including Costco, Babies R Us, Ethan Allen, Vine Ripe Market and Chili’s) and the La Mesa Village Plaza (a mixed-use project west of Spring Street off La Mesa Boulevard).

Also notable were the 527 units at the Pravada and Alterra apartment complexes on Fletcher Parkway and the adjacent Grossmont Transit Center, with its recently unveiled elevator and skybridge.

Some 80 apartments dedicated to low- and moderate-income renters were a part of the project—“affordable” housing that redevelopment agencies traditionally help supply.

The La Mesa Community Redevelopment Agency, as it’s formally called, also made possible the underground storm drain that runs from Amaya Drive to the Grossmont Transit Center—considered integral to averting flooding from December rains.

Witt, who received a series of emails informing him of the decision Thursday morning, said the rulings raise a lot of questions, including what constitutes a “successor agency” to the one La Mesa has had since the early 1970s. 

But if the ruling stands, “We won’t be doing anything [in new redevelopment projects] in the future,” Witt said in an interview outside his City Hall office.

He said it would take a couple of weeks to sort out the consequences for La Mesa.  He said the California League of Cities, one of his informants on the news, would have more to say on the 83-page ruling (attached).

“It’s really just unfair and impossible to answer specifically: ‘What is it going to do to your city?’ ” Witt said in February. “We just don’t know.”

According to the La Mesa agency’s five-year implementation plan (attached), several projects are slated for improvement throughout its three project areas—Central, Fletcher Parkway and Alvarado Creek (the youngest, founded in 1987). 

In its ruling, the state Supreme Court upheld a new law that will abolish community redevelopment agencies and struck down a companion statute that allowed local governments to keep the agencies alive by making payments to the state.

Redevelopment proponents argued that voter-passed Proposition 22, which bars the state from seizing local tax money, invalidated both laws. Redevelopment agencies are funded by the increase in tax revenue created by projects in their areas.

Supporters of the laws passed by the Legislature earlier this year, including Gov. Jerry Brown, say the money is better used to fund schools and other municipal functions during tight budgetary times.

They cite a state analysts report that shows the cost of redevelopment growing without any tangible economic benefit to the state.

“Today’s ruling by the California Supreme Court validates a key component of the state budget and guarantees more than a billion dollars of ongoing funding for schools and public safety,” Brown said in a statement.

Since the court ruling aborted the plan to allow local governments to buy back into redevelopment, the agencies will be phased out when their currently contracted projects are completed.

The agencies not only fund major building projects, like proposed new football stadiums in downtown San Diego and Los Angeles, but spend 20 percent of their income on affordable housing.

San Diego Housing Federation Executive Director Susan Tinsky called for a new affordable housing funding source.

“In the current economic environment, more people are doubling up, living on someone else’s couch, or worse yet, sleeping in their cars or on the street each day,” Tinsky said. “We call on public officials and policymakers at all levels to join in developing and executing a plan to deal with the state’s housing crisis now.”

The cities of San Diego, La Mesa and many other local jurisdictions chose to pay the state to keep their agencies open.

 —City News Service and Rancho Bernardo Patch Editor Shauntel Lowe contributed to this report.