LOS ANGELES--Gov. Pete Wilson of California has signed the state's ambitious redevelopment reform legislation, which includes imposing a time limit during which a project area can incur debt.
The legislation, Assembly Bill 1290, was initiated by the California Redevelopment Association to help curtail actual or perceived abuses of the redevelopment process in the state. Wilson signed the measure last week.
"We feel it's something that needed to be done," William Carlson, executive director of the redevelopment association, said yesterday.
The redevelopment industry has fended off various legislative assaults in the past. But in response to mounting concern, redevelopment officials concluded it was better this year to craft their own package rather than to let others dictate the direction of reform.
With the new law in place. "we hope we're on the way to being on track to have more ethical and acceptable projects," Carlson said.
Redevelopment agencies in California usually are formed by cities under a state law that encourages redevelopment to combat blight. The agencies, using tools such as loans and infrastructure rehabilitation, try to promote revitalization of rundown or economically depressed areas.
Property tax revenues generated by redevelopment are used by the agencies to fund ongoing work and to secure tax allocation bonds.
A.B. 1290, sponsored by Assemblyman Phillip Isenberg, D-sacramento. attempts to address some of the main criticisms often directed at redevelopment.
The barbs have included charges that some redevelopment projects cover areas showing few signs of blight and that projects seem to last indefinitely, thereby diverting revenues from other local taxing entities.
The new law tightens the definition of blight and requires targeted renewal areas to be predominantly urban. Redevelopment officials also have to explain clearly how their proposed actions will eliminate blight.
A.B. 1290 also changes numerous other aspects of redevelopment law. The measure imposes various time limits, requires more detail in financial reports provided to counties, establishes a fixed formula for passing through a portion of redevelopment revenues to other agencies, tightens rules for spending surplus funds set aside for affordable housing, repeals much of the redevelopment authority to issue sales tax-backed bonds, and limits use of tax allocation funds to pay for city halls.
"We're trying our hands in some ways" by imposing the new curbs, which have caused apprehension among some redevelopment agencies, Carlson said. But the changes also might lessen continual pressure for reform, he said.
However, Carlson predicted certain opponents of A.B. 1290 -- who believed the bill should be even stricter -- will introduce more bills in the future.
"We'll resist any change at this point" until there is time to see how the current reforms work, he said, although a cleanup bill is likely next year to address any necessary technical changes for A.B. 1290.
Many of the tightest restrictions apply to project areas created on or after Jan. 1, 1994. The measure is not expected to affect present holders of tax allocation bonds, redevelopment consultants have said.
