Although Oxnard’s plans for its Wagon Wheel project were effectively green-lighted by a state judge earlier this month, other projects in process when California changed its redevelopment law in 2011 still wait for state approval.
“All of the projects that were in the works are still in effect,” said Curtis Cannon, Oxnard’s community development director, on Jan. 22. “It’s the timing — that’s the big issue.”
The city’s funding for those projects must still be approved by the state Department of Finance, a process that could take as long as six months for each one, explained Cannon.
“It could be a couple of years to get through that,” said Cannon.
But what Oxnard and other cities do to fund new affordable housing and other redevelopment projects remains an unanswered question for city planners, said Cannon, explaining that when California dissolved its redevelopment agencies, it failed to create a new funding mechanism to replace them.
“It basically has changed the nature of what we do,” said Cannon. “So any other programs we had previously — affordable housing, infrastructure, improvement — unless we find another source of revenue for these programs, they go away.”
For Oxnard, the loss of the City Council’s redevelopment arm, the Community Development Commission, means that about $18 million to 20 million of funding per year is no longer available, said Cannon. For larger cities like Los Angeles or San Jose, it means billions of dollars, he added.
“Some of the bigger cities still have federal funds (for redevelopment),” said Cannon, “but as related to the others, everybody’s scratching their heads.”
The California state legislature — following the lead of Gov. Jerry Brown – eliminated redevelopment agencies as part of the 2011 Budget Act, freeing up property tax money that could be reallocated to school districts, community college districts and other agencies providing core public services.
“We’ve been doing this since the ’50s and ’60s to revitalize cities, building a system on what we thought was a guaranteed source,” said Cannon. “You wish it were going to something worthwhile, but (the governor) has said the money that was going to schools, he’s going to take out of their general fund,” remarked Cannon, “so they’re breaking even. They have no gain out of it.”
In recent weeks the only bright spot in this otherwise gloomy situation has been Sacramento Superior Court Judge Timothy Frawley’s Jan. 17 ruling in favor of Oxnard, developer Oakwood Development Inc. and residents of the Wagon Wheel Trailer Lodge, where more than 100 families have been waiting since 2004 to find out whether their mobile home park will be demolished to make room for the $42 million project.
A critical loan promised to developers in 2010 via redevelopment funds to help relocate park residents — they get at least $38,000 for each of their mobile homes and first dibs on the affordable housing units that will be included in the project — was blocked by the state Department of Finance in December.
Department of Finance officials said that reassigning various tasks to different developers than in the previously approved version of the plan — basically, not filing the proper paperwork — made the loan invalid.
Surprised by the move, Cannon and local attorney Barbara Macri-Ortiz, who represents the mobile home park residents, contended that since the project had been approved before the statewide dissolution of redevelopment agencies, the funds for the loan could not be claimed by the cash-strapped state.
Judge Frawley, who had earlier issued a temporary restraining order barring the state from taking the money, apparently agreed.
Combined with tax-exempt bonds and tax credits, developers will use the money for a roughly $42 million housing project called The Village that includes a five-building, 120-unit complex in place of the mobile home park. The project is, in turn, part of a larger upgrade of the area south of Highway 101 and west of Oxnard Boulevard.
“We’ll most likely be closing escrow in the next two to three weeks. Then we’ll be ready to issue permits and start the construction portion of the affordable housing and related infrastructure,” like roads and sewers, Cannon said on Jan. 22.