AB 2: “Redevelopment Light”

Editor’s note: This is an updated and expanded version of an earlier piece on AB 2 by Chris Norby.

Chris Norby was State Chair, Municipal officials for Redevelopment Reform (retired),  a Fullerton City Council member  from 1984-2002 (3-term Mayor), an Orange County Supervisor from  2003-2010, a member of the California State Assembly (2010-2012) and author of  “Redevelopment: The Unknown Government.” 

I was proud and excited to vote with Governor Brown when he abolished redevelopment agencies in 2011. It was the culmination of years of effort to end the fiscal and eminent domain abuses of redevelopment agencies I had witnessed as an elected official and statewide activist.

Redevelopment had become a cash cow to subsidize politically-connected developers and seize property by eminent domain from small home and business owners. It had led to the mass demolition of historic downtowns (like Anaheim) and saddled local governments with billions in debt. Most importantly for the governor, it was draining over $5 billion in property taxes from public schools, an amount that the state could no longer backfill. The state could no longer afford this costly form of corporate welfare and the Governor knew it had to go.

To achieve this, however, Brown had to promise legislators future “economic development” programs. AB 2 is payback. It allows cities to create “Community Revitalization Investment Authorities” (CRIAs) which many are fearing will recreate the worst abuses of redevelopment.

To create a new CRIA, the affected area must meet statistically provable socio-economic disadvantages (high unemployment, crime, and low income) which are more specific than the vague blight criterion used by redevelopment.

Most importantly, the new CRIAs cannot forcibly take property tax increment from other public entities (school districts, counties, etc.) that were previously being robbed by redevelopment agencies. Without this revenue stream, the new CRIAs won’t have the money for future boondoggles. Yes, the CRIAs will have eminent domain power, but they will not be able to afford use it. Property tax increment was the mother’s milk of the old agencies—they were taking 10 percent of all property taxes statewide when they were abolished. AB 2 does not restore this stream and without it the new CRIAs will have little ability to replicate old abuses.

Even without these new CRIAs, cities governments can still abuse eminent domain and give away tax dollars in the name of “economic development” schemes. The Anaheim City Council voted 3-2 (Mayor Tait opposing) to give a $158 million subsidy for a new hotel at its ailing Garden Walk mall, but this cash will come from its own general fund and not by raiding local school funds.

Were I still in the legislature, I would have voted “no” on AB 2. However, if this is the most redevelopment backers could get through four years after it was abolished, then I consider it a fair trade off. The threats of redevelopment abuse will continue to lurk in future legislation. However, with public opinion now mobilized against eminent domain abuse and the teacher unions aware of the impact of tax increment diversions, I remain hopeful that the worst abuses of the old redevelopment agencies cannot be restored.

Voice of OC is interested in hearing different perspectives and voices. If you want to weigh in on this issue please contact Voice of OC Engagement Editor Julie Gallego at jgallego@voiceofoc.org.