Redevelopment Agencies: How they help

How does it work and how does it help Danville?

Danville Square viewed from Linda Mesa S-03-19751      rda13   RR Ave 2 

As the State of California once again tries to balance its budget, one proposal put forward involves the elimination of local redevelopment agencies throughout the state.  This has prompted discussions statewide regarding the merits of redevelopment as a means of improving communities and stimulating economic development.

Though many have heard of the term “redevelopment”, there remains some question regarding what it does and how it works to benefit the community.  To help clear up any question residents may have, the Town of Danville has provided the following information regarding some of the basic questions on how redevelopment works, and how it has helped Danville.

Background

Now known as Community Redevelopment Law, “Redevelopment” is a process authorized by the State Constitution.  Enacted in 1945, this lawrda8(2)  provides local governments the tools necessary to assist the private sector in revitalizing deteriorated and blighted areas in their jurisdictions, through the formation of Redevelopment Agencies (RDA’s). Currently, there are over 400 active RDA’s throughout California.  RDAs are overseen by a governing body, typically either the local city/town council or the county board of supervisors.

Before redevelopment can occur, the governing body must perform a survey to determine whether or not an area qualifies as being in need of revitalization (referred to in the Community Redevelopment Law as “blight”).  Examples of conditions warranting redevelopment include the lack of adequate infrastructure, poor access, and dilapidated buildings.  In making a determination as to the appropriateness of using redevelopment, it must be found that these conditions cannot be remedied by private ownership or city government acting alone.  After completing this initial survey, a formal redevelopment plan is prepared and adopted by the governing council or board.  A comprehensive public review and hearing process takes place prior to adoption.

Purpose of Redevelopment

Redevelopment plans are effective for a maximum of 40 years.  They must specify the goals to be achieved within the redevelopment area and list the types of projects and expenditures which the RDA may pursue.  Examples include:

  • Building and upgrading roads, public works and infrastructure;
  • Building and rehabilitating community centers, parks, libraries, public safety buildings and other community facilities;
  • Beautifying communities through landscaping and street improvement ;
  • Helping small businesses by revitalizing downtowns and injecting new life and economic activity into older retail and downtown shopping districts;
  • Revitalizing rundown or blighted neighborhoods, which can help reduce crime and increase opportunity for struggling communities; and
  • Building or rehabilitating housing for working families;

Every five years, RDAs must adopt implementation plans which review the progress made by the agency in eliminating blight and establishing more specific goals and projects for the coming five years. 

Redevelopment Funding

RDA1 RDA’s are not empowered to levy new taxes or increase existing taxes.  Property owners are still subject to the maximum 1% rate charged pursuant to Proposition 13.  However the allocation of revenues among the taxing entities who receive a share of the property tax is changed, so that the RDA receives a larger share as revenues increase over time.   The other taxing entities continue to receive the same base allocation they received prior to adoption of the redevelopment plan, plus a smaller percentage of the increased growth factor.    The increased property taxes received by the RDA are referred to as “tax increment.”   Upon termination of the redevelopment plan, the allocation of property taxes among all of the taxing entities reverts back to the formula that was in place at the time the plan was first put into place.

The tax increment received by RDAs can be expended to finance projects through the sale of bonds or other types of debt (which allow for larger projects to be built earlier) or on “pay as you go” projects.  RDAs essentially fund themselves by making community improvements which stimulate increases in property values that would not have otherwise occurred.

According to the California Redevelopment Association, redevelopment activities generate over $40 billion in annual economic activity and generated nearly $13 in total economic development activity for every $1 invested.

Affordable Housing

Redevelopment plays a critical role in providing affordable housing within the project area.  By law, 20% of all tax increment funds must   be placed into a special fund called a “Low- and Moderate-Income Housing Fund.” These funds can only be used for the purpose of increasing, improving, and preserving the community’s supply of housing for working families, low income seniors, and disabled individuals.   

 

Redevelopment in Danvillerda10

Danville’s RDA (known as the Danville Community Development Agency) was formed in 1986.  The Town Council acts as the governing body for the RDA.  Danville’s project area encompasses approximately 140 acres in the downtown area, including Hartz Avenue, Railroad Avenue, Front Street , Laurel Drive and part of Diablo Road. 

While it may be difficult to picture “blight” within our downtown, things looked a lot different in 1986.  The redevelopment plan identified a number of problems within the project area, including poor vehicular and pedestrian circulation, inadequate infrastructure, lack of community facilities and a majority of buildings that were seriously deteriorated and/or failed to meet building and safety standards.

In the 25 years since its formation, Danville’s RDA has invested approximately $53 million in the following improvements: 

  • Extension of Railroad Avenue from Linda Mesa north to Danville Boulevard and Hartz Avenue;
  • Construction and/or expansion of the Railroad Avenue, Clocktower, Front Street and Village Theater municipal parking lots; (the provision of public parking and infrastructure has meant that private property owners are not required to bear those expenses when they redevelop their properties);    
  • Construction of the Danville Library and Community Center;
  • Acquisition and renovation of the Village Theater and Town Meeting Hall;
  • Acquisition of land for affordable housing; and funding for construction of the 75 unit Sycamore Place Apartment project on Laurel Drive for low income seniors;
  • Construction of much of the infrastructure which beautifies and ties together the downtown, including new paving, street lighting, street trees, sidewalks and improved storm drainage.

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These improvements have significantly upgraded and helped shape the character of the downtown, making it a more vibrant part of the community.  Just as importantly, these redevelopment projects have served as a catalyst for private reinvestment, facilitatingdevelopment of Iron Horse Plaza, Stoneybrook, Danville Square Shopping Center, Prospector Square and numerous smaller projects and individual buildings. 

The current plans underway to acquire land and make beautification improvements along North Hartz Avenue are the latest examples of work being done to continue to improve the project area and upgrade Danville’s downtown.

For more information on the Town of Danville's Redevelopment Agency contact Town Manager Joe Calabrigo at (925) 314-3388 or jcalabrigo@danville.ca.gov.