State gets to take away city redevelopment money

UPDATE: Just spoke to Elisa Tierney, who runs Fremont’s redevelopment agency. She’s understandably unhappy with the ruling. But she said the $13 million his won’t affect any Fremont projects, although it will wipe out the agency’s contingency fund.

Click here for our story on a judge upholding the state’s raid redevelopment agencies including Fremont’s and Union City’s.

Fremont stands to lose $13.1 million in redevelopment funds over the next two years
Union City, which was a plaintiff in the lawsuit, stands to lose $9.3 million.

centervillelotIn Fremont, the Redevelopment Agency, which is really just the City Council, has used the money to help build the new plaza in Niles, freeway interchanges and grade separations at Paseo Padre and Washington Boulevard.

It has also used public money to help developers build projects that eliminate blight. The best example in Fremont the vacant lot at Fremont Boulevard and Thornton Avenue, where Fremont’s Redevelopment Agency is committing more than $25 million in public funds to help developer Blake Hunt build 188 apartments.

But the judge’s ruling allows the state to waste such precious funds on school children, most of whom will never do anything useful with their lives, like become developers.

Jokes aside, there is a rationale to the takeaway. Redevelopment Agencies make less property tax available for school districts. Historically, the state has back-filled the districts, but with the state not exactly flush with cash, it chose to take back some of the money that the redevelopment agencies have been getting.


Matt Artz


  1. Good article on the ruling, Matt. You explained this complicated issue well.

  2. Charlotte, I know you’re privy to this stuff – is this a zero sum event? Or is the amount the state pumps back in to local education less than the amount lost by the RDA?

  3. I love your take on this. It’s easy to forget that the state has to backstop funds lost to any measure affecting revenue. Nice to read a balanced take on the ruling. TY!

  4. Marty,

    This is pretty much a zero sum event. The money from the RDA will go to local schools, which relieves some of the state’s General Fund obligation to those schools. Which, as Matt says, seems pretty fair as the money flowing into the RDA is diverted from local schools and governments. The state General Fund is on the hook to make up the shortfall for the schools. In 2010/11, 57% of the State’s General Fund went for education, and the State has a budget shortfall of of about 20% this year, so every additional dollar for schools really helps.

  5. I hope the City is managing its finances well now, after learning the lessons of lossing millions of Dollars with Bear Stern.

    Let us Repowerthe Council with People’s Power.
    Let Change Happen in Fremont for better!.

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