FINANCE DIRECTOR BELIEVES GUV IS LEANING AGAINST SHUTDOWN OF REDEVELOPMENT AGENCIES
By Steven Tavares
City officials in Fremont moved quickly to secure millions by issuing tax-exempt bonds last month for a menu of public improvement projects in the days after Gov. Jerry Brown’s controversial proposal to end redevelopment agencies across the state, but when it comes to affordable housing, the city said Tuesday it will “pause” before doing the same for affordable housing.
While the city council agreed the assessment of the city’s finance director and head of the redevelopment agency to take a step back before issuing taxable allocation bonds to continue development of affordable housing, they urged for a quick turnaround.
“I think we need to keep the pause really short and come back and see what our options are,” said Councilwoman Anu Natarajan. Councilman Bill Harrison and Dominic Dutra both agreed with the sentiment as did Mayor Bob Wasserman.
Harriet Commons, the city’s finance director, said a huge influx of bonds have flooded the market pushing up interest rates thereby making the issuance of bonds by the city to be too costly, calling it “expensive money.” A dearth of affordable housing proposal ready to begin even the permit process, said Commons, also poses a problem for moving forward. Dutra, whose professional background is real estate, said the city needs to put a call out for affordable housing projects, although he noted money for projects has “almost dried up.”
The governor’s Jan. 10 budget proposal has caused tremendously uncertainty in every city in the state because of its abruptness and lack of specific. The plan calls for redevelopment agencies to be shuttered this year and their remaining debts to be paid off in the next year. According to Commons, there is now a belief in Sacramento the governor will ease back on that threat. “It does not seem disestablishment is quite as imminent as it appeared back in the time of the governor’s proposal,” said Commons.
Nevertheless, Wasserman urged the city to proceed cautiously to avoid falling into legal uncertainty due to its recent actions. “Taking a risk is a great thing and I love to do that,” he said, “but in this circumstance we’ve never been in before, we have to be careful we don’t over-shoot anything.”
The mayor also took a broadside to what he called “deplorable” actions by the governor for ignoring the recently approved Proposition 22, which forbids the taking of tax revenue from local governments by the Legislature for the expressed use of balancing the state’s chronic budget difficulties. “It doesn’t sit well with me,” said Wasserman. “The notion that we would be willing to give away the only battle we’ve ever won in the last 10 years is not the way to do it.”
The council plans to revisit the affordable housing component of redevelopment during their next meeting, Feb. 22.
NOTES: Councilman Dominic Dutra will not vote on any matter on redevelopment next week, if there is one. He’s going on a “pre-planned” vacation…Fremont’s credit rating was recently boosted to “A+” by Standard and Poor…It may not be significant, but interesting: the main underwriter of Fremont’s $140 million tax allocation bonds approved last month is Goldman Sachs.
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