Court Upholds Elimination of Redevelopment Agencies

The California Supreme Court ruled today that a new state law abolishing community redevelopment agencies across the state, including in Palm Desert, is legal.

However, the court found a companion law forcing the agencies to give a portion of their tax revenues to the state unconstitutional.

Earlier this year, Gov. Jerry Brown approved ABX1 26, which eliminates redevelopment agencies and creates successor agencies; and ABX1 27, which states that agencies that make annual payments into the General Fund are exempt from elimination.

City Manager John Wohlmuth said the decision leaves Palm Desert empty handed.

"We can’t pay to keep it alive anymore," Wolhmuth said.

He added that the city will begin the winding down process, but the decision leaves more questions than answers.

"What do we do with the bonds we have out there? What do we do with the land we have out there?" Wohlmuth said.

The elimination of redevelopment inhibited Palm Desert's ability to build two new fire stations, a 26-acre regional park, storm drain infrastructure and a major interchange project, according to the city.

The decision also impacts Riverside County, according to Supervisor John Benoit, whose district includes Palm Desert and other Coachella Valley cities.

“Today's ruling means a virtual halt to the county’s best efforts to assist our most needy communities," Benoit said in a statement. "Low and moderate income housing projects to replace substandard conditions will be the first victims. Basic community improvements from paved streets to sewers will not be funded. Boys and Girls clubs, volunteer medical clinics, libraries and such, are now out of the question."