Artesia has a Redevelopment Agency and on their first plan or project they ran into resistance from some of the townspeople. When the vote was taken for approval two of five councilmembers had a conflict of interest and did not vote. The City needed the three remaining councilmembers to pass the plan, but two of the three said no and the project died. At least temporarily; it’s about to get exhumed.
The reason is one large 10 acre piece of undeveloped land at the southwest corner of South Street and Pioneer Blvd. The front corner lots were sold off or leased years ago for such things as a gas station, three restaurants and two furniture stores still leaving a sizeable amount of vacant land. Now these lots have different owners, some of whom may not want to sell or even move. Leases will have to be bought out, relocation benefits paid, equipment and buildings paid for at depreciated value, then demolition and cleanup done. As a side expense, should hazardous materials be involved under eminent domain, the City would pay for that as well. That’s the picture coming up—heavy acquisition expenses, plus the possible waiving of development fees as further enticement. This adds up to lots of money spent to bring this project into the city and many years before those dollars will be earned back and the project is actually on the plus side and making money. If bonds are taken out to finance the project, the bond interest would extend the payback period even further.
The real killer on Redevelopment projects is the fact that any funds generated are paid to the Redevelopment Agency to pay off debt and generate giveaways for more new projects instead of being paid into the city’s General Fund which supports the public services, i.e., police and fire and the other costs of running a city. So then we have not only a Redevelopment Agency deep in debt, but the city’s General Fund has lost its normal property tax increment income and is slowly losing ground. This is exactly what has happened to Long Beach and a similar fate can be Artesia’s.
Their proposed plan would put the main business district along Pioneer Blvd. and South Street into the project area. Even the normal tax increment would be diverted away from the General Fund and as more new projects come on line the debt load would increase because an incentive will be necessary for each new project. The city’s pitch that once the keystone project is built, follow-on businesses will not need help is a myth, as each new project has its hand out.
In all fairness this is a legitimate negotiating approach for the developer, but few if any Redevelopment Agency directors have the experience or will to drive an equitable deal for the city. For them it’s just another project for their resume and developers always use the leverage that they can go next door for a better deal. It’s who offers the most. This puts towns in competition with each other for the biggest giveaway, only to go into hock from which many will never recover.
The Redevelopment lobby has so successfully bought the legislature that we will not have a cure from state government. It will have to come through a demand from the electorate. The pot of gold at the end of the rainbow is sales tax dollars and until the law can be changed to distribute by population instead of by the town where the sale was made as it is now, the incentive for redevelopment projects at any cost will remain. The poorer towns will have to flex their voting muscle and support candidates who understand the problem and the consequences. Unfortunately, this will probably not happen until more towns go broke.