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City, county continue to dispute use of funding
Future San Jose redevelopment could be affected
By Kate Carter
San Jose and Santa Clara County are trying to figure out how to satisfy their conflicting concerns about the use of redevelopment money in the city. Meanwhile, funding for improvements planned for Willow Glen and other areas of San Jose remains uncertain.
Earlier this month, San Jose's city council again postponed its decision to make a number of the city's blighted business districts, including a mixed-use development at the corner of Fruitdale Avenue and Southwest Expressway, eligible for funds from the city's redevelopment agency.
The council, acting as the redevelopment agency, has already approved the plan once, and the required second approval has been scheduled since September. But, according to mayoral spokesman David Vossbrink, its final decision has been stalled until an agreement can be reached with the county's board of supervisors, which contests that money to pay for the business redevelopments should be used in other ways.
County Counsel Ann Ravel said the county filed an objection to the neighborhood business cluster redevelopment area on the legal basis that it doesn't meet the statutory definition of "blight," which is required for an area to receive redevelopment funds.
"It needs to be basically slum-like to meet that definition," she said. "We don't think that it does. The county doesn't object to those places being fixed up, but the neighborhoods are there--places where we think the money should go."
Vossbrink said that Mayor Ron Gonzales and Supervisor Don Gage, former chairman, have been making progress since September in discussions to settle the dispute. The council will revisit the decision later this month, after incoming Supervisor Liz Kniss has been informed on the situation, he said. There is also a question of whether Gage will continue to represent the county on this issue or if new Chairman, Jim Beall, will take over.
Gonzales also appointed District 6 Councilman Ken Yeager and District 3 Councilwoman Cindy Chavez as liaisons to the county board in an effort to help the two agencies work better together, Vossbrink said.
"We have so many issues in common and we serve so many people, it just makes sense," he said.
Although the details of an agreement over the current dispute aren't yet clear, Vossbrink said the redevelopment agency could allocate some funds to establish county facilities in San Jose, although the funds couldn't pay for county services.
California redevelopment law allows redevelopment agencies to spend public money improving areas that meet certain criteria as "blighted," he said. Redevelopment is funded through bonds that are paid off by the difference between the area's initial property taxes and the taxes paid after it has been improved. Called the "tax increment," the city, county, school districts and other public agencies do not get to take advantage of the increased property taxes, Vossbrink said.
Conflict over redevelopment funds dates back to a lawsuit filed against San Jose by the county about 20 years ago, he said. Objecting to the redevelopment agency's use of the money, the county claimed it was entitled to more of the taxes generated through redevelopment. The city argued that, without redevelopment, there would be no extra tax revenue for the county to claim. The county lost the dispute then and lost again in 1993, when it filed another lawsuit, Vossbrink said.
"Here we are again," he added.
Ravel said the 1993 settlement ended by limiting the services the county could provide and ultimately hurting those who need the money most.
"Because of the way San Jose does redevelopment, they don't do a project and close it; they do it forever," she said. "Almost all of San Jose is a redevelopment area or a proposed redevelopment area. The problem is it impacts the poor people, it takes away from county services."
She added that much of the city's redevelopment areas are downtown and that redevelopment funds have gone to build office buildings.
"The redevelopment agency has committed to not collect the tax increment from the business districts and, instead, fund the improvements with monies collected from other redevelopment areas," Vossbrink said.
Neither the county nor the redevelopment agency or the city want to waste time on a lengthy dispute, he said, but everyone remembers the early '90s when they had trouble getting sufficient funds to provide public services. Although times are better now, "it's not safe to assume that it will always be this way," he said.
San Jose's redevelopment agency is an independent agency, with separate funds, staff and procedures, Vossbrink said. But the city council serves as the agency's board of directors, and the agency works with the rest of city staff. Much of the agency's focus involves downtown development.
The city's strong neighborhood initiative to revitalize residential areas near San Jose's downtown, including neighborhoods in northern Willow Glen, could also receive redevelopment funds if it is approved as a redevelopment area later this year.
Ravel said the county agrees that the initiative is a good use of redevelopment funds. But she added that it hopes neighborhoods in the redevelopment area could receive clinics, mental health facilities and other services residents need.
Money for these and other community improvements may also depend on the ability of the county and city to come to an agreement on their current dispute, Vossbrink added.
State lawmakers decided a few years ago to end redevelopment projects in 2004, and to phase out redevelopment funding over the following 10 years. But San Jose wants to continue using redevelopment funds beyond the cutoff date and is working with state legislators to pass amendments to the new law. The city would have more success if it had the support of the county, he said.
And residents of San Jose would also benefit if the city and county were able to work together, Vossbrink added.
"It would allow us to be much better partners," he said. "It's not about getting along. It's about understanding how the law works and the policy works and how it affects the bottom line on how we provide service."
Ravel agreed.
"For us it's a policy question: What's the right thing to do with the public's money?" she said. "San Jose is the biggest city in this county. There are so many issues that we get involved in together. It's wrong to say that there are bad feelings."
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Willow Glen, California Since 1992
