By Roz Rogoff
Redeveloping the RDAUploaded: Jul 21, 2011
Redevelopment Agencies (RDA) are under fire from Governor Brown. Cities are regrouping to reenergize their Redevelopment Agencies and keep them and the money they bring in from being taken away by the State.
What is a Redevelopment Agency and what does it do? Well it redevelops blighted parts of town. It rezones and provides funding to change neighborhoods deemed blighted by a city by replacing unsightly buildings with nice new ones.
There's a misconception that RDA money is funny money and Cities are getting into debt over it. The exact opposite is true. RDA money is the one sure thing that Cities want, because it generates income through what is called the "tax increment."
Let's say an older section of a city has the zoning changed from service-commercial to Mixed Use. One of the properties there is used as a carwash. The owner of the property is offered RDA funds to improve his property. He tears down the carwash and builds a three story building with retail stores on the bottom, offices on the second floor, and apartments on the top floor.
This property is now worth three times what it was worth as a carwash. So it is reassessed and the difference between the old property tax and the new property tax goes to the City's RDA. Bingo, big windfall.
The City can then use that money to redevelop other "blighted" parts of the City. Not only that, the City is now getting sales taxes from the retail, business license fees from the offices, and can add the apartments to their ABAG requirement for affordable, workforce housing. More bingo!
This scenario is very similar to what almost happened to Beta Court six years ago. The area was rezoned but the Service Commercial businesses were grandfathered in. Most of the auto repair shops on Beta Court are in rented buildings. Renters are often the losers in RDA. If the owner of a property decides there's more money in redeveloping his property than collecting rent, he can let the leases laps and tear down the buildings and do what the carwash owner did in my example above.
I was against rezoning Beta Court, or forcing out the auto repair shops, or even calling it blighted. In a Commentary I wrote on November 1, 2005, I questioned San Ramon's definition of "blight." Here's an excerpt of that Commentary from my original San Ramon Observer website.
"I consider a blighted area one with high crime and unemployment, graffiti, unmaintained, unoccupied, and deteriorated buildings. A blighted area is a sad, bad place. The South Bronx in the 1960's exemplified urban blight. Parts of Oakland are blighted. Are parts of San Ramon anything like this? I think not.
According to the Fourth Amendment to the Redevelopment Plan, the area between Crow Canyon Road and Purdue is blighted because:
1. Buildings are small and 30 years old or older.
2. Lots are small and have multiple owners
3. Properties are vacant or underutilized.
4. Property values are stagnant and lease rates are low
5. The area lacks redevelopment or improvements
6. San Ramon's taxable sales are low (only 2% annual increases from 1999 to 2003)
8. Lack of parking and drainage, street deterioration
Except for six properties that are vacant, and two, which were torn down due to long-term vacancy, I can't define any of these conditions as blight. What is described here is an area that is old fashioned, out of date, passť, but not blighted.
The City would like newer, flasher, higher ticket, more expensive, larger buildings, and higher sales tax revenues than the Focus Area now provides. Notice that sales tax revenues didn't go down. They just didn't go up as much as neighboring cities. Is this a good enough reason to tear down the businesses on the northwest side of town? Forest Home Farms could fit under this definition of blight. It's more than 50 years old, and hasn't been redeveloped in years. Must everything in San Ramon be newer, bigger, and more expensive?"
The Housing Overlay zoning that the City Council wanted to put on Beta Court in 2005 was not approved by the Planning Commission and didn't happen. Most of the service commercial businesses that were there then are still there now.
There was no reason to change Beta Court then or now. The businesses there are useful to residents and the street isn't in a highly visible part of the City. It's also right behind Morgan's Masonry, which is a stupid place to put housing.
I'm not against rezoning the North Camino Ramon Specific Plan mixed use. That's a sensible place to put housing and improve the look and uses of the properties there. So it isn't a matter of opposing all Redevelopment if I consider it to be useful redevelopment, but the NCRSP doesn't require RDA funds. Property owners can improve their properties or sell them to a developer without needing RDA support.
After I published my Commentary on Beta Court, I received an email from Mary Lou Oliver. She brought up the specter of the old Alcosta Mall, which was blighted and needed redevelopment. I've heard the stories about it, but that was before I moved to San Ramon.
That area was redeveloped and stayed nice as long as the supermarket building stayed occupied. Once again the shopping center has lost its anchor store. Several residents have tried to get a Trader Joes to move in where the Le Asia Market used to be, but so far Trader Joe isn't interested.
Someone suggested putting housing there, and that seems like a good idea right now. Even in the economic downturn, housing is in demand in San Ramon. It could be built like the development at the corner of Alcosta Blvd and San Ramon Valley Road in Dublin, where a Townhouse development was put into a portion of a strip mall. I know that spot because I frequent the Mountain Mike's Pizza there.
Housing could be put where the old Ralphs/Albertson's market and the video store were, but the other side of the parking lot with the CVS pharmacy, Starbucks, and restaurants could remain. Perhaps a smaller, ethnic market could fill the gap for groceries in that location.
I believe Kroger's, which is the parent company of Albertsons and Lucky's, owns that store property. Maybe they would be ready to get rid of it by now.