The name’s Bond… RDA Bond.

All across the state, there is turmoil and confusion regarding the dissolution of Redevelopment Agencies. Brea is no exception. Except if you read the lead article in the current issue of BreaLine.

This 8 1/5 x 11 inch piece of real estate has become the number one launching pad for some of the most misleading, braggadocios and self serving “news” coming out of City Hall.

If you buy off on what staff writers pass off as journalism, our “… legacy of positive growth and significant infrastructure improvements is proof that redevelopment worked very well for Brea.”

There Have Been Benefits.

Hey, I’ll be the first to admit that a new high school, two fire stations, our civic and community centers and 750 new workforce housing units certainly benefit the community. I suppose the Brea Mall does as well.

These projects are a partial list and likely do not account for the majority of projects completed since the agency was founded in 1972. Oh, and before you start believing that “Brea was an early adopter” nonsense being spread around, The California Community Redevelopment Act was passed in 1945.

The passing of Prop 13 in 1978 firmly established the adversarial relationship between the state and cities, and it seems pretty clear that neither party is interested in mending fences… even if it could be paid for with future “tax increment.”

So What Is Tax Increment Anyway?

They toss this, and countless other cityspeak terms, around with apparently little or no interest in actually educating the general population. It’s not rocket science and it’s what’s saving our collective assets at the moment.

Simply put, when a redevelopment area is designated it’s property taxes are frozen at the current level. Then comes the fun part of floating bonds (federally insured), dreaming up projects (none of which actually get publicly approved), aggregating land (remember all the eminent domain battles), finding willing developers (eager to take advantage of the windfall) and painting intersections blue, turning abandoned railroad right-of-ways into trails and building a bigger better clubhouse on the old golf course.

Yeah, I’ll bet those projects are in perfect synch with redevelopment guidelines.

Poorly Written Legislation.  Surprise!

Unless there is better clarification in the law, successor agencies may be charged with meeting enforceable obligations entered into by the redevelopment agency as well as performing many other wind down functions. They will operate under Oversight Committees who will determine what will and will not move forward. It’s unclear what the full extent of Brea’s liabilities might ultimately be.

Statewide, for every $1 in revenue collected last year there was $18 of total indebtedness remaining. What’s the story here in Brea? Are our projects going to generate sufficient tax increment to keep us solvent? Anyone besides me interested in getting some answers in language we use every day? The career bureaucrats up in city hall need to remember that us folks out here on the street don’t speak gibberish.

Fast forward to today.

Yup, Brea’s RDA created almost $200 million in outstanding bond debt. Take that death grip off your wallet, it’s not up to you to pay it. Federally insured, remember? Tax increment, remember?

The mechanics for repayment should already be built into the process. Problem is, no one knows for sure. If they say they do, I’ll go out on a limb here, they’re lying.

Bond holders knew the risky nature of those tax free bonds. Real estate values could decline. Oops. Full tax increments may not be realized. Oops. Changes might occur in California law. Oops. Thanks Jerry.

Are The Skies Falling?

I think it’s very possible we may end up with a few orphaned projects. But Brea has always been good at sucking in unsuspecting developers, at holding their feet to the fire to milk projects for all they can get and in exchange maybe expediting a permit here and there or bumping up project density to help make projects pencil out.

I’m not suggesting for a moment that we launch into default panic.

But I do think it’s time for folks to step up and start asking the hard questions and demanding answers we can understand. Keep talkin’ that smack, keep printing that propaganda, and you’ll hear from us loud and clear come November.