California Supreme Court Allows State to Dissolve Redevelopment

City redevelopment agencies throughout the state could soon be dissolved and redevelopment projects in Newark could be delayed as a result from a ruling made by the California Supreme Court today.

The justices decided in , which allows the state to seize $1.7 billion in property tax revenue and allocate it toward schools and special districts in order to help close the state’s budget gap, as proposed in Gov. Jerry Brown’s state budget plan passed in June. 

A second law that would have enabled the agencies to come back into existence if they agreed to contribute $400 million annually in future years to schools, transit and firefighting programs was also struck down.

Newark Community Development Director Terrence Grindall said the rulings were unfortunate.

“We’re disappointed by the ruling,” Grindall said. “[Redevelopment] was important for Newark to improve Old Town and make improvements in the community.”

Newark currently has two redevelopment project areas, one of which was adopted in 2002 that covers industrial portions of town near Mowry and Central Avenues and about a quarter of the area slated for the project.

The other new redevelopment area, adopted in 2010, includes a third of the area designated for the Dumbarton Transit-Oriented Development project portions of Old Town along Thornton Avenue, City Hall off Newark Boulevard and the auto mall area by Balentine Drive.

But Grindall said the elimination of the redevelopment agencies would not eliminate Dumbarton Transit-Oriented Development project, a development of approximately 205 acres of land that would include up to 2,500 additional residential units.

“None of the projects in Newark are immediately reliant on redevelopment,” said Grindall. “It might slow them down or may remove some of the amenities.”

City officials said that the parcel's developers, TruMark Companies and Integral Communities, would fund the Dumbarton development.

The ruling was based on a under claims that state lawmakers violated the constitution when they passed two laws in June mandating that redevelopment agencies .

To continue operating, Newark would have to pay about $5,000 to the state this year to avoid elimination of its redevelopment agency, according to previous interviews with Grindall.

That number could decrease and then eventually increase once projects begin on land designated for redevelopment.

But the justices determined that the second law would have violated a voter initiative passed in 2010 that prohibits “the state from diverting property tax revenues from redevelopment agencies,” according to Bay City News. 

Grindall said city officials will continue looking at other ways to fund projects on redevelopment areas.

“We’re constantly looking at different methods on how to fund [redevelopment] projects, but there are no immediate available sources,” Grindall said.         

Thursday’s ruling also where many local projects, including Union Landing and several affordable housing communities, were made possible through the support of the local redevelopment agency, Redevelopment Manager Mark Evanoff has said in previous interviews.

Dissolving the agency that heads Union City’s projects would greatly impact , a transit-oriented community surrounding the Union City BART station. The agency is facilitating the development of the area to create more housing and commercial space, as well as link the station to various rail and bus systems.

Union City Patch Editor Zoneil Maharaj and Bay City News contributed to this report.