City Hopes to Protect Redevelopment Projects

The Murrieta City Council voted unanimously last week to transfer more than $26 million in planned improvement projects after the California Supreme Court upheld the Legislature's dissolution of redevelopment agencies.

With local redevelopment agencies struck down by the California Supreme Court in late December, the Murrieta City Council moved last week to dismantle its own.

City Council voted unanimously to transfer more than $26 million in Murrieta Redevelopment Agency assets and obligations to a successor agency dubbed the Murrieta Housing Authority. This will be done by the state-mandated Jan. 31 redevelopment dissolution deadline.

"There is no money that goes with the Murrieta Housing Authority," city of Murrieta Community Development Director Mary Lanier told Patch. "We are transferring properties that the redevelopment agency owns. The other assets would be housing loans."

This assets to be transferred include $11.1 million in tax increment funding and $15.2 million in bond funding for projects.

"The dissolution of the Murrieta Redevelopment Agency may have a significant impact on the five-year Capital Improvement Plan," Dorothy Farmer, city of Murrieta senior management analyst wrote in a staff report.

Projects planned with tax increment funding include $10.8 million for Madison Avenue/Murrieta Hot Springs to Elm Street improvements and $300,000 for the North Murrieta Business Corridor master plan.

Projects planned with tax allocation bonding allocations include $2.2 million for the Madison Avenue/Murrieta Hot Springs to Elm Street improvements, $6.46 million for the Jackson Avenue/Warm Springs Creek bridge and street improvements, $3.59 million for the Los Alamos/Interstate 15 overcrossing and others.

Still, Lanier said city staff is working with its legal team to analyze the impacts from Assembly Bill 1X26, legislaton that was upheld by the California Supreme Court after

AB 1X26 mandated the phasing out of redevelopment agencies statewide and provided for an alternate program under which revitalization projects would be allowed to continue. Supporters of the legislation argued that redevelopment dollars would be better used to fund schools and other municipal functions during the current tight budgetary times.

Opponents, including the city of Murrieta, countered that RDA projects provided localized economic stimulus, creating construction jobs, eradicating blight and raising commercial and residential property values.

"We are working with our attorneys to really sort out what the legislation means to us as are the other cities," Lanier said.

Under the legislation, any unobligated funds would have to be transferred to the Riverside County auditor, Lanier said.

"These are existing obligations and agreements," Lanier said about the projects City Council moved to protect by transferring them to the Murrieta Housing Authority.

"Based on our review of the legislation, we are planning on moving forward on these," she said. "At this point we are planning on completing everything on schedule.

"When we originally received the information, we were informed we could only include contracted obligations," Lanier said. "At that time we didn’t have any contracts…we are now adding those as enforceable obligations.

"With our bond documents, we have an obligation to complete the projects so they get a return on their investment."

Some of the downtown area fell under the Riverside County Economic Development Agency—the county's redevelopment agency—which also has to be dismantled. City officials had been working with the county on future plans for the area.

Still, Senate Bill 654, which would allow local governments to complete their obligated projects, was passed by a Senate hearing committee last week. City officials are awaiting the legislative outcome of that bill.

"This is such a moving target, and a lot of it is going to depend on what the states does or doesn’t do," said Murrieta Mayor Pro Tem Rick Gibbs during Tuesday's meeting.

City Manager Rick Dudley said: "We have been scrambling the last few weeks to get something together that makes sense...at this point we believe we can make an argument for all of these projects."


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