In what can only be considered a major takedown of the redevelopment game, the California Supreme Court in a 6-1 opinion (Chief Justice Cantil-Sakauye concurring and dissenting), held that the state legislature could eliminate redevelopment agencies without violating the California Constitution. What the lege giveth, the lege may taketh away. It upheld the statute dissolving redevelopment agencies. California Redevelopment Association v. Matosantos, No. S194861 (Dec. 29, 2011).
In an interesting twist, however, the court invalidated the companion statute by which the legislature allowed the redevelopment agencies to continue to exist if they paid into a state fund benefitting schools and special districts. End result: snake eyes for the redevelopement agencies.
We summarize our conclusions concerning the constitutional landscape. The Legislature, pursuant to its plenary power to establish or dissolve local agencies and subdivisions as it sees fit, may, but need not, authorize redevelopment agencies. (Cal. Const., art. IV, § 1.) If it does choose to authorize such agencies, it may, but need not, authorize their receipt of property tax increment. (Id., art. XVI, § 16.) However, if it authorizes such agencies and, moreover, authorizes their receipt of tax increment, it may not thereafter require that such allocated tax increment be remitted for the benefit of schools or other local agencies. (Id., art. XIII, § 25.5, subd. (a)(7)(A).) Assembly Bill 1X 26 respects these narrow limits on the Legislature‘s power; Assembly Bill 1X 27 does not.
Slip op. at 49-50. Because several critical statutory deadlines passed while the court considered the case, the court "reformed" the statutes and delayed implementation of the dissolution and wind up by extending certain deadlines for a four months.
This certainly appears to be a major blow to California redevelopment agencies, which went "all in" by challenging both the legislature's dismantling of their existence, and the opt-out legislation. They gambled on the court invalidating both, but ended up with the worst combination: upholding of the repeal statute, and invalidation of the saving statute.
Will it be the death blow? Stay tuned. One suspects now that the Governor and the Legislature have the gained the upper hand legally, something might be "worked out." There's too much bureaucracy at stake for the players to simply let the redevelopment game slip away quietly into the night.
More here from the California Eminent Domain report.
California Redevelopment Association v. Matosantos, No. S194861 (Cal. Dec. 27, 2011)
