Town officials are preparing for the loss of Danville's redevelopment agency, which will be officially dissolved on Feb. 1. State Supreme Court upheld a law that dissolves California's 400 redevelopment agencies, and allows the state to seize $1.7 billion in property tax revenue, last week.
"What happens to the town and all other redevelopment agencies in the state, we're essentially walking away from future tax increment monies that haven't already been committed to projects," said Town Manager Joe Calabrigo.
Danville's redevelopment agency (RDA) has spent approximately $53 million over 25 years to extend Railroad Ave., construct the library and community center, renovate the Village Theater and maintain infrastructure. Most recently, the RDA purchased a multi-million dollar building near San Ramon Valley High School as part of the downtown beautification project. The town will no longer be able to take on redevelopment projects and, instead, will focus on paying off outstanding debts.
"There would have been somewhere in the neighborhood of $20 million in tax increment funds that would have been available between now and 20 or so years left in our agency," Calabrigo noted. "When agencies are eliminated, to the extent that they still have outstanding obligations, they will be allowed to receive enough tax increment funding to meet those obligations."
In short, the town will act as a successor agency to the RDA and will continue to receive funding from the state to pay off $21.4 million in outstanding debts. Calabrigo stressed that Danville will not take on any additional financial obligations that it didn't have before, but residents may see the results of the disappearing agency.
"Short of general fund dollars, which are competing for every other capital purpose, or trying to find a way to spur reinvestment on the part of private property owners, there is no replacement source of funding," Calabrigo said. "In terms of the future, there will be projects and improvements that either won't get done or won't get done as quickly, but it's not going to take away anything that's already there."
According to town documents, Danville's operating budget and capital improvement program specified $1,156,254 for services, programs and projects undertaken by the RDA. Although that funding will completely disappear, Calabrigo said Danville is in better shape than other Bay Area cities that use redevelopment funds to combat blight and pay for police.
"In Danville's perspective, the role of our agency has been paying for projectsâ€¦. and we haven't done a lot of the things that will be causing problems for a lot of the bigger cities.
This would have been a lot worse for Danville had it occurred any time in the past because we wouldn't have had those 25 years under our belt," Calabrigo said.
The Town Council will confirm itself as a successor agency during its Jan. 10 meeting.