South Lake Tahoe ends redevelopment following state mandate
February 1, 2012
SOUTH LAKE TAHOE, Calif. andamp;#8212; More than 20 years of redevelopment at the South Shore came to an end this week as California legislators grapple with fixing a state budget that is in seemingly constant need of repair.The South Lake Tahoe City Council dissolved the South Tahoe Redevelopment Agency during a special meeting Monday evening following mandates from the California Legislature last year.andamp;#8220;For such a low-key meeting it really is the end of an era for Tahoe in so many ways,andamp;#8221; said Mayor Claire Fortier.andamp;#8220;And the state of California,andamp;#8221; added councilman Tom Davis, who participated in the meeting by phone.Lawmakers eliminated the roughly 400 redevelopment agencies, effective Wednesday. The agencies were created after World War II as a way to help blighted neighborhoods. They have been lauded for creating jobs and improving run down areas, but have also been criticized for inefficiency and diverting public money to private developers.Lawmakersandamp;#8217; 2011 decision was upheld by the state Supreme Court, which found the Legislature had the authority to end the agencies and use their property tax money for schools, law enforcement and other local services.An effort by some cities, including South Lake Tahoe, to delay the deadline or find a compromise fizzled.The activities of the South Tahoe Redevelopment Agency will now be wound down by the city council, which will act as the redevelopment agencyandamp;#8217;s andamp;#8220;successor agencyandamp;#8221; under the bills passed by the legislature.Closing the redevelopment agency will include paying off the agencyandamp;#8217;s debts, as well as selling the redevelopment agencyandamp;#8217;s assets, including the parcel at the southwest corner of U.S. Highway 50 and Ski Run Boulevard.Investors in bonds for South Tahoe Redevelopment Project Area No. 1 have been guaranteed payment from redevelopment agency funding, with Transient Occupancy Tax from the project area pledged as a secondary payment source, according to city documents.Tax increment financing, the primary source of redevelopment agency funding, will be available to the successor agency to pay off the redevelopment agency debts, said city spokeswoman Nancy Key.Payments to bond holders represent the bulk of $199.5 million in outstanding debt owed by the former South Tahoe Redevelopment Agency. Bondholders are owed about $155 million, Lake Tahoe Unified School District and Lake Tahoe Community College together are owed about $9.5 million and several other agencies, including El Dorado County and South Tahoe Public Utility District are among those owed the remaining $35 million.Actions of the successor agency will be supervised by an oversight committee, the El Dorado County Controller, the State Department of Finance and the State Controller. The oversight committee will include representatives of the city, county, the California community college system and South Tahoe Public Utility District. The committee is not expected to meet until May.As part of the series of motions needed to dissolve the redevelopment agency Monday, the council reestablished the City of South Lake Tahoe Housing Authority. The authority will be responsible for managing several of the redevelopment agencyandamp;#8217;s programs, including the first time homebuyer program and housing rehabilitation program.On Tuesday the California Senate approved SB654 by President Pro Tem Darrell Steinberg, D-Sacramento. It allows local governments in California to spend a collective $1.4 billion for housing, fulfilling one of the goals of redevelopment agencies. The measure was sent to the Assembly on a 34-1 vote.The billandamp;#8217;s passage would allow $1.5 million in South Tahoe Redevelopment Agency funding to be transferred to the successor agency. But the funding is unlikely to be made available in time to save a planned affordable housing project at the corner of Pioneer Trail and Ski Run Boulevard, Kerry said. The future of The Aspens project has been in doubt since the elimination of the stateandamp;#8217;s redevelopment agencies was proposed.And how future projects that could have been helped through redevelopment can move forward without a redevelopment agency will be up to state Legislators and the city council to decide. Ten to 15 years could pass before the full ramifications of dissolving the stateandamp;#8217;s redevelopment agencies are known, Kerry said.andamp;#8220;Weandamp;#8217;ll have to find a new way to make things work at Tahoe,andamp;#8221; Fortier said.andamp;#8212;The Associated Press-contributed to this report.