Council Extends Life of Redevelopment Agency

A reluctant City Council on Monday approved a payment schedule to extend the life of Foster City’s Community Development Agency, which is .

ABx1 26 calls for eliminating local redevelopment agencies to help solve the state’s budget crisis.

City redevelopment agencies would be dissolved by Oct. 1 unless governments adopt a payment schedule for “enforceable obligations,” including contracts and lawsuit settlements, according to

If the Community Development Agency wants to stay in business, it may have to commit payments to the state.

Foster City would have to pay $6.2 million this year to keep operating and about $1.5 million every year thereafter, according to Mayor Linda Koelling.

“This is unconscionable,” Koelling said. “We are paying ransom.”

While the Community Development Agency is planning to make good on its existing obligations, under the law, the agency “is not allowed to adopt new project areas, enter into new contracts, or incur additional indebtedness," the report says.

Koelling called the law “highway robbery,” pointing out that voters approved Proposition 22, which barred the state from taking local tax dollars, including redevelopment funds.

“The County of San Mateo voted wholeheartedly on Proposition 22, which said, ‘stop the state from taking redeveloping funds,’” she said. “And they’ve looked at us and said, ‘too bad, we are going to take it anyways.’”

Councilman Rick Wykoff suggested adding a paragraph to the council’s resolution calling for the dissolution of the state legislature. His remark evoked laughter in the council chambers but Wykoff said he was serious.

The state’s takeover of redevelopment agencies could be postponed or overturned if the California Supreme Court sides with plaintiffs challenging the constitutionality of the law.

The League of California Cities, California Redevelopment Association, City of San Jose and City of Union City have sued the state finance director and other state officials, asking the court to stay implementation of the law by Aug. 15.

Not knowing how the legal question will be answered, however, city council members begrudgingly voted to send the state its redevelopment payments for approval.

Here’s a sampling of the Community Development Agency’s obligations from June 29 through the end of the year:

• Payments of $233,500 and $237,500 to the San Mateo Union High School District under a 1991 stipulated judgment.

• An affordable housing subsidy of $1,050,000 to Sares Regis, developer of Pilgrim-Triton Project.

• A $110,000 grant and $172,000 affordable housing subsidy to PWM Residential Ventures LLC for the Marlin Cove Project.