Gov. Jerry Brown targets redevelopment agencies

January 10, 2011 7:33:22 PM PST
Redevelopment agencies are quick to boast they help to create jobs by revitalizing run-down neighborhoods or to help businesses get started. Gov. Jerry Brown is not convinced the benefit justifies the expense. Brown's sweeping budget cuts would severely impact some 400 redevelopment agencies, run by cities. San Jose's is the second largest.

Thanks to redevelopment, San Jose has revitalized areas replaced them with gleaming high-rise condominiums, affordable housing and businesses that create jobs. However, Brown says the state cannot afford to help anymore.

"The state has to backfill and pay, make up for the property taxes that are taken by redevelopment," Brown said.

Last year, that amounted to $1.8 billion, which mostly went to schools.

"The education system in this state needs improvement, I understand he's trying to do something about it, but I don't think eliminating redevelopment agencies is the way to do it," San Jose Redevelopment Agency spokesperson Harry Mavrogenes said.

San Jose's redevelopment agency has projects spanning practically every part of the city. A major focus is on revitalizing the core downtown area. It includes small business districts and San Jose's older neighborhoods and it includes large industrial development zones in the far north and far south areas of San Jose.

And there are enterprise zones, home to Bargata Recycling. It received $400,000 from the redevelopment agency to buy equipment. The state kicked in tax credits worth $37,400 over five years for every employee hired. Twenty-three jobs were created, paying just under $15 an hour, on average.

"We've got people working here that were unemployed," Borgata Chairman Jeff Winters said. "We took them off unemployment, put them to work, trained them. We're shipping about 100 tons of material a day to be recycled instead of sending them to California landfills."

That kind of program would be eliminated under the governor's plan.

Also in jeopardy would be the mayor's goal to attract clean tech jobs.

"One of our long-term goals is to facilitate the creation of 25,000 clean tech jobs," Mayor Chuck Reed said. "If California is going to be able to add jobs, we need to capture these clean tech jobs and redevelopment funding is one of the few tools that we have to insure that those clean tech jobs stay in California."

Reed says he will join a meeting of the state's 10 big city mayors next week to plot their next step.

The governor's finance team will go over the numbers with redevelopment agency leaders Tuesday.