Redevelopment useful where it can do most good
October 4, 2011
Recent Record-Courier editorials have apparently stimulated some discussion about redevelopment. The past record of redevelopment here is mixed. Arguably some success early followed by some failures as the recession hit. Redevelopment basically fell victim to the same excessive boosterism and over-planning that characterized governance county-wide during the last decade and that has left us with so many problems.
Redevelopment was devised as a strategy for improving blighted communities, especially slums in our large cities. By designating areas as “blighted” and adopting redevelopment plans for them local governments were able to bring unique powers to bear.
A redevelopment agency can use its powers to assemble land into usable parcels and then either develop them itself or sell them for development in accordance with its plans. And the property tax “increment” from new development (the difference between taxes before and after development) are retained by the redevelopment agency to fund projects and programs in the redevelopment area. Sort of planning on steroids. Clever and reasonable if used carefully.
But “good intentions gone awry” comes to mind. Many urban redevelopment projects backfired, creating new blight in the form of large, unmanageable public housing projects and commercial mega-projects that drained the life from once vital neighborhoods.
More relevant to Douglas County is what happened when suburban communities that weren’t blighted started to look at what redevelopment could do for them. By simply declaring imaginary “blight” in some location officials suddenly had new powers available to them. But once blight was declared it was often forgotten, and growth, development and revenue became the focus.
Local governments are highly dependent on sales taxes, so one strategy is to use redevelopment to “capture” sales tax from neighboring jurisdictions. Find an area next to a neighboring town, declare it blighted, zone it for commercial development, use the tax increment from that new development to fund the needed infrastructure and, in some cases, to subsidize private development, and you can capture sales tax from the neighboring town as its residents start to shop in your jurisdiction. Can you say Topsy?
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If this works well, a few years down the road the redevelopment agency is awash in funds generated by the tax increment, with which it can extend its reach. Money that, in the absence of redevelopment, and other things being equal, would go to school districts and general county government. But in the absence of redevelopment there might not be a property tax increment in the first place, and presumably everyone benefits from the sales tax revenue that is generated. The pros and cons are a constant source of argument among redevelopment winners and losers.
Of course we could argue the merits of Topsy too. Should it have happened at all? Might it have happened without redevelopment? Could it have been better designed? Did it go too far? Will it endure? And of course the real irony is that as things stand today probably our most glaring example of blight is Riverwood, a product of redevelopment. And sales tax revenues have dropped back to pre-Topsy levels. So maybe Topsy was a good idea, maybe not. But we are where we are.
I think the R-C does us a favor by drawing attention to redevelopment here. Our redevelopment area is actually strung all over the north county in over a dozen bits and pieces, from Wally’s Hot Springs to Topsy. Did you know that Genoa is part of the redevelopment area? And that the Redevelopment Agency is funding projects there? Do you consider Genoa blighted?
Basically, the property tax increment collected in our redevelopment area is reserved for projects in the redevelopment area. Taxes that otherwise would be available for use in the county as a whole. Meanwhile, what happens to the tax increment from new development outside the redevelopment area? Well, it just goes into the general fund as it always has, for use everywhere.
So we have one system for accumulating and using property tax increment in much of the north county, a system which keeps it there. And another system for the rest of the county, that funnels tax increment into the general fund and uses it to provide services throughout the county, including the redevelopment area.
I think the question that the RC has raised is not so much how these powers have been used in the past, though there are obvious cautionary lessons of hubris, but how these powers and resources should be used going forward. What areas of the county are most blighted? Should these powers and resources be used in those locations or in places like Genoa, or both?
The R-C points out parts of downtown Gardnerville that might benefit from inclusion in the redevelopment area. And couldn’t the Ranchos, our largest “town,” and perhaps the one most qualifying as blighted, use some help? Redevelopment is helping to build a trail from Wally’s to Genoa. Why not a bike path from the Ranchos to Gardnerville? Then we have the blight hither and yon all over the county caused by abandoned and incomplete development projects. Could redevelopment help clean up those messes?
It seems to me that if we can gerrymander the redevelopment area all over the north county and figure out how to spend redevelopment funds in what is arguably our most affluent community, that we might figure out how to use redevelopment powers and funds for the betterment of other areas that are equally or more deserving. I appreciate the R-C raising the issue. How will our leaders respond?
Terry Burnes is a Gardnerville resident and former Bay area planner.