Imagine, for a minute, that you’re Governor Jerry Brown. You’re in Sacramento, trying to pass a budget that will shrink the state’s deficit to only $9 billion. You’re pressured to save school budgets and deal with prison realignment – the touchy and expensive stuff – when suddenly you get the news: The Supreme Court has given you a gift. A $1.7 billion gift.
Yes, the state could be seeing all of that money, and soon, since a California court ruled in favor of shutting down 400 redevelopment agencies. It’s good for balancing the state’s budget, but the collateral damage? Low-income housing projects stuck in limbo; revitalization projects at a standstill.
So now cities and counties are scrambling to figure out how to deal with the loss of these agencies on February 1. With the loss of state redevelopment funds, the City of Oakland loses about $28 million, and as Mayor Jean Quan said in a press conference yesterday, that means big changes.
MAYOR JEAN QUAN: We realized we couldn’t just cut in the regular way, trim a little bit here and a little bit there. We had been planning to, and this now speeds up, to reorganize the city – to merge departments, to cut them into shaded levels, to look at how we could do things differently. And that’s what we’ve done here. We’ve not just made the redevelopment cuts. We’re reorganized so we could save public services and the staff that supports them to the largest extent possible.
Still, after issuing 2,500 pink slips to city employees last week, Mayor Quan says more than 100 will probably not be invited back to work. The final cuts are scheduled to be announced next week. To talk about how this will affect the city of Oakland, East Bay Express co-editor Robert Gammon joined Ben Trefny in the studio.
BEN TREFNY: First off, Robert, I’m wondering why Oakland seems to be so deeply affected by the loss of redevelopment funds.
ROBERT GAMMON: Well redevelopment has become an important part of the city over the past 10 years, especially during Mayor Jerry Brown’s administration. The city under his direction and under the city council’s direction decided to expand redevelopment throughout Oakland. The whole idea was that Oakland has many areas of deep poverty, and those areas need to be redeveloped. They need to attract new businesses, especially more housing into the area, affordable housing. And the best way to do that in California is to create redevelopment areas so that you can take the tax revenues that are generated in those areas and then reinvest back into the economy.
For Oakland it also means having to hire people to manage that process. And so the City of Oakland has 150-200 employees that have been managing that process over the past decade, so those people are going to be laid off in the elimination of redevelopment.
TREFNY: Are there any benefits to shrinking the city government at this point?
GAMMON: No, I don’t think so. The City of Oakland’s government is not bloated. It’s been cut back drastically over the past several years through numerous rounds of budget cuts. At this point you’re just depriving citizens of services.
TREFNY: Statewide redevelopment agencies accrued a $30 billion debt. Was the money in Oakland being well-spent in your estimation?
GAMMON: Some of it was and some of it wasn’t. There were some projects that have been questionable over the years. Also, redevelopment has paid for Jerry Brown’s 10K plan, which brought 10,000 new residents into the downtown area. It’s revitalized the uptown area and created a whole new entertainment district with the refurbishment of the Fox Theater. So, it’s done a lot of good. It’s also paid for a lot of affordable housing in Oakland, which were much needed.
TREFNY: And that was something that Jerry Brown really supported when he was mayor of Oakland.
GAMMON: Yes, I mean he understood the power of what redevelopment could do. In fact I was doing a story a number of years ago about one of his redevelopment projects, and I asked him whether it was really worth $50 million in public subsidies through redevelopment. He said, “Yes, it is because this project would help turn around an area.” I was skeptical at the time but over time he has proven to be correct.
TREFNY: It seems like in a city like Oakland, where there are a lot of different projects that the government needs to invest in in order to bring the neighborhoods up, this is going to have not only a short-term effect with the loss of jobs now, but a real long-term effect because investment isn’t happening.
GAMMON: That’s very true. Another aspect that is kind of being missed her is that Oakland, because of its long, industrial history, has many brownfields in the city. These are sites that have been polluted with toxic chemicals over many years of use. And they’re just sitting there toxic. And redevelopment was a key way to clean up these areas, and without redevelopment funds, it isn’t clear whether it’s going to happen. This will have environmental impacts as well.