RDA of GT : Economic and Fiancial Folly

Grand Terrace RDA to lose $448,211 dollars, (Riverside Press-Enterprise, dated December, 02, 2008.)

The point of this piece is to educate citizens on Redevelopment Agencies (RDA’s) and how they have veered of course to become government giveaways. It is also to pose the question: If the entire city is an RDA, what exactly does a loss of $448,211 to our RDA fund mean to us in services and fiscal health? As I based this on information available from state sources, in which nothing had been reported from Grand Terrace. (See scanned excepts, the agency has been out of compliance for not reporting property or blight progress report and holding parcels of land.)

RDA’s were created in the 1950’s to eradicate blighted neighborhoods. Their intent was to build replacement housing. Blight designations have been manipulated to give commercial developers and others, cash grants, tax rebates, free land and cash from the sale of bonds, (they are not obligated to pay back), in order to increase local government sales tax revenues

According to the 2007 State Controller’s “Community Redevelopment Agencies Annual Report,” Redevelopment Agencies (RDA’s), take an alarming 23 percent (San Bernardino) and 25 percent (Riverside) of the local property tax base.

This is extremely important as this forces cities to figure out how to generate an additional 23 to 25 percent more in revenue for the general fund.

The general fund, not RDA revenue, pays for basic city services: police, fire, parks and libraries.

RDA pays developers to locate in our jurisdiction to increase our sales taxes.

Reading the local newspapers, you would get the wrong picture. RDA does not pay for local services.

The Riverside-San Bernardino area is number one nationwide in home foreclosures and unemployment, even beating out Detroit.

Yet Sacramento is unable to act on its’ budget deficit to hit 28 billion within less than one-year. Yet, Wall Street has walked away with approximately $350 billion dollars.

Proposition 13 was passed 30 years ago. Reform of how we finance state/local government should have been resolved long ago.

State and local government budgets remain a collection of piecemeal legislative actions.

It is a complicated mess.

After the passage of Proposition 13, local governments got a “bailout” from the state budget surplus to backfill revenues lost from this measure.

During the 1990’s recession, the state took it back these bail-out funds to pay for funding schools.

Local governments depending- on your view – had to increase revenues, to do this they used RDA fund not to eliminate blight, but to help so-called “private industry,” mainly retailers to locate within their jurisdictions to increase sales taxes. Sales taxes are the second the largest source of revenue, below property taxes.

Our own City of Grand Terrace found using RDA’s so lucrative to increasing sale tax revenues, that it made the entire city an RDA, I do not view Grand Terrace as a blighted area.

Statewide for the Fiscal Year ending June 30, 2007, RDA revenues were $10.7 billion, expenditures, $8 billion and long-term debt $17 billion.

Below is a small sample of projects literally taken from various “Community Redevelopment Agencies Annual Reports:” The City of Grand Terrace did not have any projects listed. Perhaps, a reader has the current report, to share these expenditures.

In FY 1998-99, the City if Victorville, completed a 8,000 square foot facility for Vista Dental, a 5,000 square foot medical facility for Dr. Paul Bell and 16,000 square feet of office space for the Desert Dental facility and laboratory. The City also built the La Paz branch of the Desert Community Bank.

In FY 1998-99, the City of San Bernardino completed the expansion of 100,000 square feet for GE Capital Mortgage, creating 150 new jobs.

In FY 1999-00 the City San Bernardino constructed a 20-screen theater.

In FY 2000-01 the City of San Bernardino completed Preciado Mortuary.

In FY 2002-03, the City of Colton renovated Moss Brother’s Ford, creating 18 jobs and the Hampton Inn and Suites, creating 20 jobs.

In FY 2002-03, the City of Redlands, completed construction of an 11,000 square foot three-story office building extension for ESRI, an information systems software company.

In 2006-07, the City of Colton, “opened” Bob’s Big Boy in Dominguez Plaza, (the report does not mention the number of jobs created.)

In 2006-07, the City of San Bernardino completed Phase II of the Residence/ Fairfield Inn, the Elephant Bar Restaurant and various office/industrial parks.

Spending tax money on projects-best suited for private investment- is never a good idea. When these retailers and auto malls go out business all we taxpayers just get the debt and an empty building.