Pittsburg redevelopment projects could lose millions

February 7, 2011 12:00:00 AM PST
The city of Pittsburg has one of 18 redevelopment agencies in California being reviewed by the state controller's office. Gov. Jerry Brown has proposed eliminating redevelopment agencies altogether because although they can spur major improvements, they also siphon tax money away from schools and other public services. The issue attracted an overflow crowd to a hearing in Sacramento on Monday.

Build it and they will come -- or will they? With just 61,000 people, Pittsburg has one of the largest redevelopment agencies in California with an annual budget of $36 million.

"I think we're about 13th or 14th in the state. On a per capita basis, we're in the top five," says Pittsburg City Manager Marc Grisham.

Pittsburg was aggressive, putting 80 percent of its land inside its redevelopment zone. Now a supporter, longtime resident John Diaz Coker was an early critic of redevelopment.

"I saw it devastating the poor neighborhoods. I saw them doing some very unfair things to people and reducing the stock of modest housing," says Diaz Coker.

Today, the focus is on the historic downtown. For the first time in 30 years, Pittsburg has a bank there with a rent subsidy from the agency. A senior housing project is underway. There's a new elementary school. An historic theatre is getting a facelift. The popular New Mecca Cafe is being remodeled and expanded and there is even a caviar store.

"People from outside the city are so envious of what's happening in Pittsburg. They come all the time to see what's happening next," says Pittsburg City Councilmember Nancy Parent.

But there are critics of Pittsburg's redevelopment efforts, those who say the millions spent on these projects could have been better spent somewhere else.

Some projects have run into trouble. Despite nearly $1 million in loans, the owner of Restaurant 615 closed its doors in January. In 2008, developer A.F. Evans defaulted on a $27 million bank loan and the mixed-use Vidrio project went into foreclosure. Now, all but five condos are sold, but much of the retail is still empty, except for a non-profit bookstore.

"Basically what you have is a model that isn't sustainable. You have housing with a lot of commercial, but the problem is where are you going to get the demand for the commercial?" says attorney Bob Kane.

"You really can't fight the laws of economics and somehow government thinks it can," says Kris Hunt from the Contra Costa Taxpayers Association.

Hunt says Pittsburg is an example of why redevelopment agencies should be eliminated.

"Now we've got something like $88 billion in debt across the state, and we're diverting $5 billion in property taxes per year that could be going to schools, counties, special districts," says Hunt.

But Pittsburg's city manager says the success of redevelopment can't just be measured in dollars.

"The image of Pittsburg, and the positive attitude people have about Pittsburg, that's a major change," says Grisham.

While the image is impressive, it's still not clear if anyone will come.

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