Brown and the Legislature believe that the policy change will save the state $1.7 billion in the new fiscal year.
Quan said if Oakland's redevelopment agency is forced to close, the city might have to halt affordable housing projects as well as efforts to bring more retail stores and entertainment complexes to its downtown.
She said if the agency is eliminated, up to 171 city employees, including 18 police officers who are paid with redevelopment funds, could lose their jobs.
"There isn't a part of the city government that won't be affected if redevelopment goes away," Quan told reporters at her weekly briefing at her office.
She said she doubts that the state will be able to achieve all of the $1.7 billion in savings it expects and she thinks the change "will hurt the state economy in the long run."
Oakland Deputy City Attorney Daniel Rossi said Oakland would join a lawsuit that will be filed next week by the California Redevelopment Association and the California League of Cities challenging the legislation approved by the Legislature and signed by Brown on Wednesday that cuts funding for redevelopment agencies.
Rossi said the suit would challenge the bill's constitutionality and would allege that it violates Proposition 22, a measure passed by California voters last November that bars the state from taking funds that are supposed to go to local agencies.
Rossi said the suit would be filed directly with the California Supreme Court and he expects that there will be a ruling by the end of July on the suit's goal of getting an immediate stay that would stop the state from cutting the redevelopment funds.
Quan joined the other mayors of the ten largest cities in the state in signing a statement saying they "are extremely disappointed" that Brown signed the legislation.
The mayors said the legislation "will dramatically affect our ability to invest directly in our cities, build affordable housing, revitalize our local economies, and create the jobs our citizens need now."
They said, "This action will have a devastating effect on our communities. We will continue to fight efforts to eliminate community redevelopment agencies and work closely with those who seek to challenge this law through the courts."
The nonpartisan Legislative Analyst's Office said in a report earlier this year that there's no reliable evidence that redevelopment agencies improve overall economic development in California.
"Redevelopment agencies lack some of the key accountability and transparency elements common to other local agencies," the report said, because they can incur debt without voter approval, unlike other local agencies.
Brown's spokesman, Gil Duran, said today that Brown agrees that "there's no evidence that redevelopment agencies improve the economy."
Duran said the governor believes that funding for redevelopment agencies "has been siphoning money away for far too long from schools, public safety and other things that taxpayers need and want."
Duran said redevelopment funds often "are squandered on slush funds for things like mermaid bars," referring to an entertainment venue a block away from the state Capitol in Sacramento that features a bar where mermaids and mermen swim in a giant aquarium. The venue was funded by redevelopment funds.
Redevelopment funds have also paid for golf courses and other non-essential projects, Duran said.
He said Brown is confident that the courts will uphold the legislation he signed.
"The legislation has been thoroughly analyzed by the Legislature and our office," Duran said.