California’s Redevelopment Agencies Are Dead, But They May Haunt Us

Apparently the saying used by frustrated parents applies to statutes: “I brought you into this world and I can take you out.” The California Supreme Court has upheld recent legislation that dissolved California’s redevelopment agencies (RDAs) that were originally created by the legislature. The court also struck down the alternative legislative scheme that would have allowed RDAs to survive if they made certain payments to other state agencies. As a result, all of California’s nearly 400 RDAs are now effectively dissolved. But this may not be the end of the story.

In response to California’s fiscal emergency, the legislature enacted two bills — 2011 Stats, 1st Extra Sess, chs 5, 6 (AB 1X26 and AB 1X27, respectively) — to secure funding for “core governmental services,” by directly (or indirectly) taking funding from California’s RDAs. Health & S C §34167(b).

No surprise, there was a fight launched by those in support of the RDAs. The California Redevelopment Association, the League of California Cities, and several cities filed a petition for writ of mandate in the California Supreme Court, challenging the constitutionality and validity of the new statutes. 

The supreme court just weighed in and its decision marks the death of the RDAs in California, at least for now. In California Redevelopment Ass’n v Matosantos, the supreme court concluded that what the legislature giveth, the legislature may taketh away, i.e., “if a political entity has been created by the Legislature, it can be dissolved by the Legislature,” barring a specific constitutional removal of that power.

This means that the statutes requiring the windup and dissolution of RDAs were constitutional and, under the court’s power of reformation, all deadlines set in §§34170–34191 and arising before May 1, 2012 were to be effective 4 months later.

By contrast, the supreme court stuck down the statutes allowing communities to create successor agencies contingent on continuation payments to state funds.

Is this the last we will hear about RDAs for now? Probably not. As Morrison & Foerster’s Law Alert (.pdf) points out, the supreme court’s decision “leaves myriad questions unresolved,” making legal challenges certain, because “hundreds of millions of dollars promised to support redevelopment projects are at stake.”

With that kind of money involved, this is unlikely to be the end of the story.

For more detail on this issue, turn to the Law Alert on CEB.com and an article in the May 2012 issue of CEB’s Real Property Law Reporter. For more on redevelopment generally, turn to CEB’s Condemnation Practice in California, The California Municipal Law Handbook, and, California Land Use Practice.

© The Regents of the University of California, 2012. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited.

One Response

  1. […] –  Summary of the Court Ruling, California Continuing Education of the Bar (CEB) https://blog.ceb.com/2012/01/11/californias-redevelopment-agencies-are-dead-but-they-may-haunt-us/ 2 – More Lawsuits in 2012, following the Dissolution of RDAs, from law firm Morrison and […]

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