As you can see from this summary the $6,086,017 left after dividing up the tax increment with the county and schools was mostly spent on staff. The only infrastructure expenditures were $248,891 for Palomar Street widening and $500,000 for Main Street widening. They actually ended up owing the city over 2 million dollars.

It is important to remember that by state law 55% of taxes collected outside of redevelopment areas go to schools. It is important to note that the 64% listed as public improvements and other redevelopment actual goes mainly to administrative expenses and debt service. Very little actually goes to public improvements. By law Redevelopment agencies must incur debt in order to collect tax increment. This debt involves huge expenses. The 16% going to schools and other public agencies shortchanges the county, special districts and libraries among others.

This was included in our property tax bill in 2005. It shows that 8.4% of all property taxes collected that year was diverted to redevelopment agencies in San Diego County from libraries, special districts, schools, county and cities. Redevelopment-The Unknown Government predicts 64% of all property taxes in the state will be diverted to Redevelopment Agencies by 2040 if this law is not reformed.

This cartoon shows how this diversion enriches favored developers, bond brokers, attorneys, and consultants at the expense of police, fire, libraries, and schools.

Another cartoon illustration the diversion of tax revenues as tax increment. In order to declare an area blighted a consultant must be hired to write a report as well as an attorney. The Bond brokers charge large commissions to finance redevelopment bonds (and refinance them). Chula Vista is still paying on bonds issued in the 70’s for bayfront property, because they have been refinanced instead of being repaid.

This shows the actual and projected increase in tax increment funds for the redevelopment agency in Chula Vista.

This pie chart came from a presentation by Eric Crockett at the SWCVCA meeting in June of 2007. The percents were calculated and added to the slide. After the Low-Moderate Housing Fund got its share (a little lower than 20% because of an advance the year before) and the schools got theirs 34.9% of the money was spent on Administration (salaries and supplies) and 53% was spent on debt service. This left 12.5% or $1,500,000 for redevelopment activities which included more supplies and loans. The $400,000 to Goodrich is a payment on a deal reached in 1991 that involved taking the Ramos property to the north of Goodrich by eminent domain and Goodrich giving up its south campus to the port. The property to the south was only cleared in 2007 and the Ramos property to the north still has not been handed over to Goodrich. Staff thinks this might happen this year or next.

This is how tax increment money is spent state wide. Our agency spent more for administration and debt service payments. Note that only 2% state wide goes to housing subsidies while state law requires 20% off the top go to a low/moderate housing fund. What happens to the rest of the money?

This graph as well as the previous one and all the cartoons come from Redevelopment-The Unknown Government They check state records to get their data. Their projections are based upon the current trend and could be changed by changes in state law.

As the current lawsuit in national City shows there is a difference of opinion as to what “blight” is. Essentially it is based upon a report written by a consultant hired by a redevelopment agency to prove an area meets the state criteria, which includes things such as below market rents and low property taxes.

Some of the Otay Valley areas considered “blighted” are undeveloped land with high habitat value. The same is true for some of the Bayfront land, which includes the Sweetwater National Wildlife Refuge and the J Street Marsh among other valuable natural resources. Some of the land currently zoned agricultural and open space active recreation in our General Plan by the KOA at the end of Second Avenue is also declared blighted. Some of the residential areas include well kept older homes. Obviously “blight” is a matter of opinion and liberally used to advance redevelopment plans.

Another popular “redevelopment use” for tax increment is business subsidies to favored developers. The best current example is the Gateway project at 3rd and H. Gaylord will likely exceed this subsidy by millions if they end up on our bayfront.

This is another slide shown to us by the director of Redevelopment Eric Crockett. We have added the percentages. Staff and supplies eat up 39% of the money and 8.6% go to loan payments this year. This is the money that is supposed to provide housing for our low and moderate income population. Moderate income people make 120% of the median income in San Diego County. Low income people make 80% of median income. Very low income people make 50% or less of median income. This year the median income is $69,400 for a family of four. $62,450 for a family of three. $55,500 for a family of two and $48,600 for a family of one.
There are dedicated housing units in the city which rent to people in these income categories. Unfortunately they all have waiting lists and some of them are still too expensive for people on fixed incomes or with minimum wage jobs.

This development does not have a sliding scale for rents. If this is more than a third of your net income you can only rent here if you have Section 8 to pay the difference. It was partially funded with state farm workers grant, but they never bothered to find the required number of agricultural workers, because they did not want to subsidize their rents as required by the grant? Or just?

The trick here is that the recently amended General Plan changes the zoning on several blocks of residential property to industrial. Fortunately Proposition C makes eminent domain illegal in Chula Vista and our new city manager-David Garcia-says the city intends to respect the will of the 74% of the voters who approved it.

Where the Palomar Trolley Center now is used to be a tomato field, house, church and business. There was a trailer repair business there. The only one in the area. Eminent Domain took these properties and caused the forced eviction of the previous owners. One wonders why this important successful small business could not have been incorporated into the center some how, but this is not how redevelopment has worked in Chula Vista in the past.

The favoring of large corporate big box stores over small businesses is unfortunately typical of redevelopment agencies. As one small businessman said to me, “they speak the same language.” Greed and profits, the heck with residents and small businessmen???

Erik Crockett objected to my interpretation of this slide as the areas to which he wished to see redevelopment expanded. The fact is he has talked about the need to expand the area of redevelopment. He has expressed the opinion the areas are too small to be successful. He did participate in the 2004 expansion with the added areas when he first came to work in Chula Vista. We need to be very alert to keep our homes out of redevelopment areas. It makes me personally mad and worried that the southwest project area actually takes a narrow detour to include the block on which I live. Our block is all single family homes built in the late 60’s. if redevelopment were to expand through the entire project area the city would loose a great deal of money through the diversion of tax increment created by the normal buying and selling of homes in residential areas. Residential requires a lot of services from cities-about 14% more than what the entire amount of property tax pays for. If all this residential were put in redevelopment the city would be in even deeper financial difficulty and have even more trouble providing services-maintenance, fire, police, libraries. Some of the gray area isn’t even in Chula Vista. When Chula Vista was studying adding the “added areas” to redevelopment they actually included some of these areas that are in San Diego. There was enough protest that they backed off from that.

This shows part of the planned reorganization. Community Development will no longer exist. Instead a new department called Redevelopment Housing will exist. With two exceptions all the staff from Community Development will be moved to new Redevelopment/Housing Department. This new department concerns me, because the goals of Housing Department should be different than the goals of Redevelopment. I am concerned that more of the 20% set aside is going to be spent on staff and less on housing. I am also concerned that the policy is to not rehab or build low/moderate income housing outside of redevelopment areas because redevelopment only gets half credit. The goal of Housing should be to provide more housing NOT to make Redevelopment look better. The Redevelopment Agency is required to provide 15% of all housing built as low/moderate housing. Our inclusionary ordinance only requires 10%. The agency must use its own funds to make up the difference.