One of my favorite movies is "The MilagroBean Field War."If you haven't seen it, you should rent it. It is about a small town where the bad guys buy up water starved farmland for a pittance to build a large commercial development. Their efforts are thwarted by a young farmer who taps into a nearby water supply and plants a bean field in defiance of the developer's plans.
Well, if the Milagro bean field had been in California, it probably would have been placed into a Redevelopment Project Area and the ending of the movie would have been changed.
In fact, Redevelopment is probably the least understood tool of local government and Oceanside's is no exception.
California Redevelopment is either the savior of decaying neighborhoods or local government's way to evade Proposition 13 tax restrictions, depending on your point of view. In Oceanside the Redevelopment project encompasses the 365 acres of downtown including the beachfront. In 1975 the entire 365 acres (the project area) were declared blighted and/or under utilized. The Redevelopment Agency (the City Council) was given 30 years to re-develop it.
Simply put, the theory of redevelopment is that the property in the project area is so blighted or under utilized that it cannot develop within the free marketplace. Government intervention is needed to encourage, aid and subsidize new development. The first thing done by Oceanside's new redevelopment may surprise some of you. The property taxes in the project area were frozen at 1975 levels.
Redevelopment agencies finance their activities with tax increment. Tax Increment is the difference between the property taxes at the time the redevelopment area is formed and the higher property taxes due after new development. These taxes would normally go to local government or local school districts but now go directly to the Oceanside Redevelopment Agency.
The Redevelopment Agency has the power to float bonds, without voter approval, for private developments in the project area. The bonds are secured by and are supposed to be paid back from the tax increment . If, for any reason, there is not enough tax increment revenue, the city must repay these bonds from general revenues. Some communities , like Lake Elsinore, have been saddled with debt because of redevelopment bonds.
Paying part of the cost of land, or actually giving land to a developer is another subsidy used by Redevelopment Agencies as well as the power of eminent domain. The Constitution allows the government to take property with just compensation for public uses. Redevelopment projects have been determined to be, by their very nature, public uses.
This sketch of the redevelopment process is not all-encompassing but it will give you the basics. Oceanside is far from the Milagro Bean Field analogy but it would pay all of us to pay attention to what the City Council is doing with their somewhat awesome powers of redevelopment.
