Redevelopment San Juan Style

What's in a word?

Jim Reardon

The term "redevelopment" often is used to avoid discussion of unpleasant specific realities in our town. The positive connotation of the term obscures uncomfortable facts.

Our City has a Redevelopment Agency. This is the arm of City Hall that just gifted $5 million of borrowed public money to a car dealership. By the City's own estimate, the break-even return of this arrangement is at least 12 years in the future. Under numerous obvious scenarios, the City may never see a return on these funds. Have we forgotten how and why we lost the previous car dealers?

When speaking of redevelopment, the topic of so-called "affordable housing" usually comes up. The leading vote-getter in the recent election cited affordable housing as an "opportunity" created by our Redevelopment Agency. That is certainly a liberal notion, but affordable housing is actually more of an obligation. State law requires that 20 percent of the income of our redevelopment agency be set aside for affordable housing. This is a significant burden on local taxpayers. Still worse, our city has committed these affordable housing funds for other purposes, leaving the obligation for future taxpayers to make up later.

Affordable housing is not affordable for taxpayers and ordinary home buyers. There are other housing solutions that do not require public spending. Just look around town and understand that most of our existing truly affordable housing was built by private investors before our City's enlightened leadership put a stop to it. Restrictive zoning, development fees, red tape, neglect of traffic issues and even open space acquisitions make it impossible for new private development of affordable homes. Some would like the City itself to expand its role as an affordable housing developer and landlord. But the operative word is "expand" -- precisely when the City Hall should be looking for ways to trim the budget.

Downtown redevelopment plans are also in the news and on the City Council agenda these days. Many believe the plan being discussed will forever ruin the historic character of the area. The election supporters of the top two election vote getters, both of whom profess support for historic preservation, have vested interests in the downtown plan. These supporters, also the largest landowners in the downtown, need the Redevelopment Agency to expand (Distrito-La Novia, Home Depot, and the CLC retirement village), in order to finance their grand downtown scheme. The connection between all these activities is direct, financial and yet insidious. It has little or nothing to do with historic preservation. Many voters have yet to connect the dots.

For this reason, the new City Council majority supports Home Depot at the Lower Rosan property. But the project is not actually redevelopment since the land has never been developed! It is instead a City-owned and funded NEW development project. Taxpayers already own the Lower Rosan property. This purchase is a $7 million blunder of past City Councils, committed by the very people who support the front-runners in the recent election. If it is so urgent that we get the land "back on the tax rolls" as Mr. Kramer has stated, then why did the City purchase the property seven years ago and remove it from the tax rolls in the first place?

The last time that Home Depot offered the City a serious proposal (during much better economic times), it demanded a 40 percent sales tax rebate. The City's own economic impact analysis showed that our existing local retailers (e.g., DeNault's, Plant Depot, Pacific Sales, Dunn-Edwards, etc.) would lose $5.7 to $9.1 million in sales per year to the tax-subsidized Home Depot, and that the City could expect to receive about $210,000 per year increase revenue after paying the rebate. Does that sound like a good deal to anyone? That kind of money won't even cover a City Manager's salary!

The Home Depot, Distrito-La Novia and CLC serve no other purpose but to increase the borrowing capacity of the Redevelopment Agency so that the grandiose downtown plan can be financed by taxpayer money. The downtown plan itself demonstrates this fact clearly enough by failing to include existing retailers most directly affected by Home Depot!

Redevelopment agencies are created to address blight in older downtown areas. They can also create blight by providing preferential tax benefits to a new business that force older existing businesses to close or relocate. It is for this reason that many of the existing retailers in our town actively oppose the Home Depot.

The prospect of a new majority on our City Council brings hope that they will exercise independence and the common sense to reconsider this appetite for redevelopment borrowing before it becomes a blight on our historic downtown and lifetime taxpayer burden.

1 comment:

Anonymous said...

Thank you for this.
This is exactly why I wanted you for the city council.
It took 2 elections to Get other council members elected and I will support you again in the next election.
You were only defeated because as usual 2 of the
men were supported by development groups.

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