Irvine Officials Dispute Fee for Redevelopment Agency

Irvine should pay nothing to keep its redevelopment agency, according to city officials.

Gov. Jerry Brown and the state Legislature essentially eliminated redevelopment agencies statewide as part of their efforts to close a $25-billion budget deficit. Now if cities want to keep their redevelopment agencies, they must pay a fee based on a state formula.

According to the state, the city’s fee is $2.6 million. But city officials are disputing the numbers. They say that according to the state’s formula the city owes a negative amount.

“We believe our payment should be zero,” said Mark Asturias, the city’s housing and redevelopment manager.

The formula, according to city officials, is based partly on how much tax increment revenue — the increase in property tax revenue in redeveloped areas — cities have been collecting. Since Irvine’s redevelopment agency is young compared to most Orange County cities, it hasn’t received a large amount of tax increment revenue.

So in the case of Irvine, the state chose to apply a different formula, one that would generate a fee, city officials said. Officials argue that state law doesn’t say anything about applying different formulas. That determination led the City Council Tuesday to approve an appeal of the state’s decision.

Cities activate redevelopment agencies to revitalize blighted areas. The agencies are funded through complicated financing plans based on the difference in property tax revenue, known as tax increment, when property values increase in redevelopment areas.

In Irvine’s case, the redevelopment agency’s purpose is to convert the former El Toro Marine air base into the Orange County Great Park.