Oakland struggles to hold onto redevelopment money

February 2, 2011 1:46:11 AM PST
Gov. Jerry Brown is looking at a variety of ways to help balance the budget, including reclaiming redevelopment funds from cities across the state that haven't yet put the money to use. In Oakland there is a lot on the line including the city's effort to keep the A's baseball team in town.

The race is on to spend millions of dollars in redevelopment money before Brown can take it away.

"We've spoken to all the major cities as to what various arrangements, or gimmicks or other things they've been trying to figure out, and we're absolutely looking a teach one of those," says Oakland City Manager Dan Lindheim.

The governor wants to withhold $1.7 billion redevelopment dollars to balance the state budget. For Oakland, that's a loss of $52 million -- money that's used to leverage bonds for other projects.

"What you really lose is the ability to turn the economy around in different parts of the hardest hit cities," says Oakland Mayor Jean Quan.

If anyone understands the value of redevelopment money, it's Brown himself. As mayor of Oakland, he used $51 million in redevelopment money to bring the Fox Theater back to life.

"Everything around the Fox is just blooming, some of the hottest restaurants in the country are moving in that area," said Quan. "And so those tax revenues that are coming back to pay off the original $14 million are coming back at a very high rate."

The Oakland A's also generate millions for the city and the plan to build a new stadium, to keep them from moving to San Jose, is hinged on redevelopment dollars.

When asked if this was the nail in the coffin for the Oakland A's, Doug Boxer -- Co-found of Let's Go Oakland -- says, "I don't like to think of it like that. It's very difficult to move a franchise. The Giants were on their way out, quite frankly, including Canada."

And the other city courting the team could have a development dilemma. San Jose stands to lose $20 million needed for its proposed A's stadium.

Brown says money obligated before a March 1 deadline will not be taken away. Now cities are racing to use it before they lose it.